Andrew: Hey, before we get started, if you need a web app built, or a mobile app built, who do you call? Check out Koombea.com. They’ll take your idea from PowerPoint to product in just a few weeks. And when you go to Coombia.com, I recommend you look at that top tab, the one that says, ‘Work,’ on it, to see their previous work and understand what Koombea.com can do for you. From a minimum viable product to a full-blown web app they have you covered. They work in Ruby on Rails for web. They can build an IOS or Android app for mobile. Koombea.com.
And, if you need a phone service, a phone number, who do I recommend? Grasshopper.com, because with Grasshopper.com you can get unlimited extensions. That means that when the caller calls your company, they can basically be screened before they come to you. If they’re looking for sales, you direct them to one place. If they’re looking for tech support, to another place. If they’re looking to just get on your blog, maybe they do into the voice mail and you respond to them when you have a chance. Lots of extra features at Grasshopper.com. That’s one of my favorites. Go to Grasshopper.com and understand why the virtual phone system that they create is the one that entrepreneurs love.
Finally, if you need a lawyer, as a tech entrepreneur, you need to talk to Scott Edward Walker of Walker Corporate Law. Why? Because if you go to the high-end law firms they’re going to charge you an arm and a leg and probably expect to take a piece of your business. They want shares in many cases. Or, if you go to the mom and pop law firm, the one that your friend recommends, that lawyer is probably not going to understand the issues that you go through as a tech entrepreneur. I recommend go to the guy who specializes in start-up entrepreneurs, Scott Edward Walker of Walker Corporate Law. Here’s the program.
Hi, everyone, I’m the founder of Mixergy.com, home of the ambitious upstart, where I’ve got an audience of entrepreneurs who are just rearing to go, just waiting for as much information as possible so they can go out there and build their companies based on it.
The big question for today is how do you pitch your ideas and business deals in a way that persuades people to say yes to you? Joining me is Oren Klaff, he is the author of a new book called, Pitch Anything. There’s the book right there; an innovative method for presenting, persuading, and winning the deal. Oren in the Director of Capital Markets for the investment bank, Intersection Capital, where he raises tens of millions of dollars from investors and institutions. I invited him here to teach us how to pitch. Oren, welcome.
Oren: Hey, thanks, Andrew.
Andrew: So, let me give you a scenario. Someone in my audience listening to us right now is going to walk into a business deal, maybe to try to raise money, maybe to try to close a partnership agreement, and immediately the person behind the desk who he’s pitching to has his arms folded, like he’s the king of the Universe and is making my audience member, my precious listener somehow become a court jester and perform and try to win him over right away the deck is stacked against my listener. What does he do?
Oren: That’s a great question. And just to set the stage, I’ve raised, maybe, over the last four, five years $400 million. And I say that because I’ve been in that situation 98 times, if not 105. What we come to realize over time, and I raise money in contemporary real time. I’ll have a $20 million term sheet this week on a Silicon Valley venture deal. So, I’m in the capital markets every single day, and I face this situation literally many times a week.
Andrew: You know, by the way, I’m sorry that happens to you, but I’m reassured that it does because there’s this sense that it’s happening to me because I might be too young, or too early stage, or don’t have enough experience. But I know your background and if it’s still happening to you it means that this is just part of the process. It’s nothing personal against me; it’s just something I need to learn.
Oren: This is what you will face. And so we have a name for this. We try and name everything that we encounter. Then we can go back and call it something and deal with it. And this issue is called, prizing. So, when you walk into a private equity firm, a venture firm, an individual investor, they view themselves as the prize. And they view you as there to perform for them. And you will see them sometimes sit like this. I call them garden gnomes–stone-faced garden gnomes. They sit there as if you’re the court jester, you’re going to put on your suspenders, your little clown nose, and ride around on a little tricycle and when you make them smile. They’ll lean back and smile as if they’re the king with the scepter to reward you with some kind of capital injection. That is not the frame that is useful for you as the investor. Any time that we go in with the frame of the capital is the prize to be won by our performance we fail. What we developed is this concept of prizing, and the basis of prizing is that capital is a commodity. It is available anywhere. It’s the ultimate commodity.
If you think that rice and oil are commodities, it is the ultimate commodity. It is available anywhere. Whatever deal you are in right now, there a hundred thousand sources of capital, probably within 500 miles of you, a thousand miles of you that would be appropriate for your deal and could go into it. So, you are the prize. You have got to internalize it. There are very few deals. There are very few good entrepreneurs. There are much, much fewer deals than there is capital. The only thing that makes capital seem like a prize to be won is it’s hard to get meetings, but the actual capital is a commodity.
And so, what we’d like to do, of course, is to give the pitch and then one very, very actionable way to prize. It’s to give your pitch. When it comes to the end, what everyone sort of does is wrap up, hey, here’s our exit strategy, here’s our valuation. There’s a pause, so what do you think? That is the moment at which you either prize or fail the prize. We’re going to give you something specific that we do nearly every time. We have to do it the same way.
Here’s our exit strategy. Here’s our pro forma. Here’s the team that can execute, and here’s the valuation, and here’s the timing on the round. And by the way, Mr. Investor, Andrew Warner, what we’d like to know at this point since we’ve taken the time to show you our deal is how you are as an investor. What do you invest in? How do you act when the chips are down? If you could just spend a few minutes explaining to us why you’d be a good person to choose to come into our deal and then sit back. That is prizing. It is we’re the prize, we have the deal.
I am in the business of having the deal. Any deal can get funding. Every single deal I’ve ever been in will raise capital. In fact, capital raising can be a curse if you’re good at it because you just raise capital that shouldn’t get capital. Every single deal will and can raise capital no matter what the dynamics, but it’s just got to be done right. This is the central issue. You’ve got to view yourself as the prize and the investor as the commodity.
I’ll say one more little thing on that. So, I worked with a major California educational institution that goes out and raises capital for large science projects, $2, 300 million, and they go to philanthropies. And so, they kind of walk in and they say, hey, we’re raising $200 million family offices that have philanthropic buckets. And so, I’ll go in and carry a bag and say, hey, can you put $20 million into our HIV science center that we’re doing at UC-SD.
It wasn’t that effective so I went it to say, hey, look, we always raise money for these deals. John Kroc, Ted Waite, Bill Gates tends to be on these boards. So, if we allow you to invest in this deal, we’d like to know, how you ever sat in a board with Bill Gates? How do you perform in that environment? And then, sit back. That changes the fundamental nature of capital raising when you prize and treat the capital as a commodity, we would not be able to raise a dollar if we didn’t have that frame.
Andrew: And it seems like, after reading your book, that this works anywhere, even beyond raising money. You gave an example in your book, “Pitch Anything”, of BMW that sells a car that makes potential buyers sign a contract where they say they agree to keep the car clean if they buy it. What they’re doing there is saying, instead of we’re going to try to win you over as a customer and dance to your tune, you have to win us over by agreeing to keep the car clean, by showing that you’re a worthy customer and worthy driver of BMW.
It looks like that is one of the first things we need to do. They want themselves to be considered the prize. We have to show them, no, we’re the prize. Can we do that right from the start, or do we need to wait till the end where we turn the tables? Can I just walk in and say, “Look, before I even pitch you, I want to make sure that you really are the right partner for me. Because if you’re not, I’d rather just go pitch someone who is. Can you give me an understanding of what other partnerships you’ve done that are similar to mine? How long have you been in business? I know that your company’s strong, but who are we going to be dealing with, and what commitments are they prepared to make for us?” Can I walk in like that? Don’t do it right from the start. Make yourself into the prize. Why?
Oren: Every single venture meeting or private equity meeting you walk into will start like this: “Hey guys, thanks for coming in. We thought we’d spend a few minutes to tell you about ourselves as a firm and our history and a little bit about our partners.” So, what you want to do is cut that off immediately and say, “Hey, look, why don’t we get started on pitching our deal? OK, then you can tell us about yourselves in context of what we have.”So, and if you do that strong, they’ll let you do that.
So, that does some wonderful things. First of all, it preserves time, and hopefully we’ll have time here today to talk about the value of time. You have about 20 minutes of attention in a room. You walk in a room, everybody sits down, fluids in or out, organize all that stuff. Hail fellow well met. Nice to meet you, but then the meeting starts. You have 20 minutes to accomplish what we call “wanting”. OK, 20 minutes. That’s about the span of human attention. If you burn up 10 minutes listening to them burn energy and tell you about themselves, then now you have 10 minutes to … of attention span from them and to create wanting. So, when you walk in that room, they’re going to say, “Hey, we’ll tell you about ourselves, then you guys can get started.” You say, “No. Why don’t we get started.” Right.
Andrew: So, even though they’re going to sit as the prize, as the kings in the room and treat you like the jester who has to entertain them, you say go with it. Because you’re going to make your deal so enticing in that period of time that you can then flip the table later. You want to start doing it that way? OK, the other think in that chapter that you have about offering the prizes, you say don’t let the buyer set the agenda. And often we walk in and we want them to set the agenda, because we want them to tell us what it’ll take to make them happy. You’re saying, no. If they start to set the agenda, you go in there and you say, “No, I’ve got a better agenda. Let’s go with this.”
Oren: What you’re touching on here is the difference between the selling and pitching.
Oren: So, selling is when you have multiple opportunities and touch points and get to work with the buyer. So, I don’t want to pick on paper salesmen, but because the office will do it. So, you may go in as a paper salesman and say, “Hey, we have this great 50% cotton blend. How about getting a couple of pallets?” And they may say, “Hmm, you know it sounds good, but we still have the 25 percent. Let’s maybe next month come back and let’s talk about it.” That is not how pitching works. Anytime I’ve gone into pitch a deal and will get a yes or no, they never go, “Hey, you know it sounds pretty good. I wonder if maybe you could come back next month and pitch it again, when we’ve used up the capital that we have. Or we have some more …” It’s binary, yes or no. I mean sometimes there’s some exceptions they say, “Hey, season your revenues and come back in six months.” But that’s a no, right, for the moment.
So, when you pitch, it’s very high stakes. There’s high consequences and it’s binary. When you’re selling, you can do all that kind of rapport relationships. Now here’s the point, if you look at a rock band, if you look at a comedian, they don’t tune their performance for each individual audience or audience member. They go right for the amigdala [sp]. They go for what we call the “crocodile brain”. They put on the best performance they have that is meant to capture attention and emotion. And it’s funny, because a lot of times you’ll see rock bands they’re in Miami and they’ll say, “Hey, Cleveland.” I mean they don’t even know where they are and you see it in comedians too. Comedians don’t tune. They’ll throw in one L.A. joke or one New York joke, but basically the performance they have is built to effect the core parts of the human emotional system; and that’s what your pitch has to do. So, you don’t tune it for the guys that are there. You just barrel in and give the best pitch that you know works. All right and so …
Oren: … it’s not selling, it’s pitching. It’s high stakes, high consequences. You have one pitch. It’s the best pitch in the world. You give it and it’s binary. You win or lose.
Andrew: OK. We have a big agenda here for this interview. I want to get as much of it in as possible, including the next step on the agenda, which is The Big Idea. You label concepts within pitches, what does that label ‘The Big Idea’ apply to? Give me an example of that.
Oren: In a minute or less, let me tell you what I think the problem is. Venture capitalists have provided a lot of direction for entrepreneurs on how to structure their pitches. But, how a venture capitalist will tell you to structure a pitch, and how you should pitch to go get the money, are completely different.
For example, if you go and ask a girl, ‘What should I do to make you like me?’ she’ll say, obviously, ‘Buy me flowers’, ‘Take me out to dinner’, ‘Take me on trips’, ‘You stay in a different hotel from me’, ‘Drop me off at my house at 8:00 at night on Saturday so I can go out with my girlfriends, and you go home.’ That’s what she wants, but that’s not what’ll actually work.
So asking a venture capitalist how . . . when a venture capitalist tells you how to pitch, he’s thinking, ‘How can I get the best liquidation preferences? How can I give you the lowest valuation? How can I get the longest vesting period, the maximum cliff, and really cram you down?’ That’s what his advice is going to involve.
Going back to The Big Idea, if you go to any of these start-up seminars, they’ll say ‘What’s the market? What’s the problem? Tell me about your product. What’s the team? What’s the competitive landscape? Show us your pro forma.’ It’s very linear, you know, slide by slide by slide. What this does is dissect your deal like dissecting a frog. The parts of a frog are not the frog, right? There’s an intangible when you have a whole frog. A leg, and a head, and an arm, and a liver is not a usable frog. So when you dissect your deal in that way to make it useful for the private-equity, high-net-worth individual or venture capitalist, the best metaphor I can think of is: you’re giving him parts of the frog.
The Big Idea captures the essence in a narrative arc. The market, who you are, the bigness of the deal. . . it’s all of that, captured in a very quick introduction to the deal. When I see pictures come to me — I sit on the intake board of a hedge fund — it is always missing. They come in, entrepreneurs and guys seeking capital, breaking their deal down into pieces, but without the greater narrative about what’s going on.
I can give you an example. We recently were asked to pitch a deal for an airport expansion in southern California. They were pitching it the same old way — leases, lease rates, the cost of land, everything like that. We stepped back and said ‘Hey look, here’s the big idea. In this county of California, the major international airport is a single-runway airport. It will be at total capacity within three years. Every slot coming into this airport has got to be dedicated to commercial traffic. Any private jet coming in has to go somewhere else.’ So, the Big Idea was: If you don’t have any landing capacity for private jets, the air space in this county is completely full, and the traffic has to go to other counties. That, in essence, is the narrative arc for the deal. Then you can go into lease rates, and problem solutions, and cost of property.
So the Big Idea has got to cover the generic problem so that anybody who shows up with a solution can win. It’s not about you, it’s about anybody. We, or someone else who shows up with a solution for this deal, can win, and then you can go into how you plan to win. Does that make sense?
Andrew: Yes it does. So first, you’re giving them the Big Idea, which captures that painful problem, and then you’re talking about how you can solve that deal. You do that presentation of the big problem so well that if anyone else comes in there and pitches it, they at least have that opening and the audience’s willingness to look for the solution. OK. All right, that makes sense. I’m looking to see if there’s anything that I want to push back on or find out more information on, but I think that makes a lot of sense and that seems like something you do in half a minute and then you get into the rest of the presentation?
Oren: So the big idea is something that we end up spending a week or more developing, and you tell it in about 45 seconds. You know it’s…
Andrew: How do you develop it internally, how do you identify what that big problem is and then test to make sure that you’re expressing it well?
Oren: It is when you tell people about the big idea it should trigger emotional response, like, wow. It’s got to be insightful.
New information. Big and intriguing all right? If it doesn’t have those components it’s not the big idea, all right? A lot of people think they are delivering the big idea but it’s the small idea, right? The big idea has got to fire off intrigue. Where you go ‘Wow, I did not know that!’ That is very interesting. I want to learn more because this is high stakes and big. That’s for us the kind of filters through which we say, ‘hey, we succeeded.’ I can give you some follow-up material where people go, and we’ve done fifty of these, and we’ve got them in writing and you can look one after the next. We tend to do it like this. The big idea in 42 words. The big idea in 113 words. Internally you sit around and you come up with this, you write it in the way that a Seinfeld TV show might have been written. Lots of people collaborating and making sure you get that high emotion result. Anybody wants to see these can email you or email me and we’ll share lots of the big ideas for technology companies, for big projects. We’ve never done a big idea in more than 172 words. You’ll see in our documents, ‘the big idea in 42 words.’ ‘The Big Idea in 99 words.’ You’ve got to be able to create this intrigue and excitement with the bigness of it.
Andrew: OK. The next thing we want to talk about is, that we don’t want to as people who are pitching deals be nice. The tension can be good. Why?
Oren: This is the number one thing I see in every pitch that comes to me at the hedge fund. Or when people come and pitch me a deal and say, help me take this to the market. The number one thing I see is supplicating and neediness. That is a part of prizing. Well, we have to be nice to these people because they have the money and they can decide to give it to us, right? But in fact when you supplicate and you’re over-nice, it’s boring, all right? That ties into this concept of attention. When you’re boring, you’re span of attention shrinks. The concept of attention is so important. Every deal can be funded to the extent you have attention, right? If someone will just sit there and listen to you for one hour, two hours, three hours, four hours, five hours, eventually you’ll convince them. The problem is you have 20 minutes of attention. So, the way to create attention is by the twin forces of tension and novelty. When you create tension between two people it says there are consequences here, and stakes. It makes people alert, all right? At the same time when you inject novelty…novelty is a ping of dopamine to the brain. [Makes sound], I got to pay attention, right? So, tension and novelty moving together will keep your window of attention open for a maximum amount of time. So the big question is, well, how do I create tension and stop being so nice, right? I think an actionable method is very easy. You can just say something like, ‘hmm, I don’t know if I’d get along with you’ ‘You guys seem to be very analytical and focused on IP. I’m not sure we would get along together.’ That is an indication that there are consequences in the next 5-30 seconds of the conversation, right? Now, how do you save that situation, right? There’s got to be a push and a pull to that so you might say, and I did this yesterday, “you guys really focused on where’s you’re IP, where’s your IP in the deal, where’s the IP? What do you have that’s proprietary? Say ‘Look, I’m not sure that we would get along with you guys. Is this an impasse? You seem really focused on intellectual property and it might be that we would just not get along together because we have qualitative aspects to this deal. And then they sit back a little bit, and they say, ‘But you know what? This might be a perfect relationship because you guys really know intellectual property and drive for having that something proprietary, and we might actually work really well together.’ And so that is push-pull and the creation of tension.
If you layer onto that some novelty then you have now created the next three or four minutes of high attention for you to say whatever you want that will really get through to the people. Tension, again, is the indication there are consequences in the next few seconds to minutes of the conversation.
Andrew: I can’t wait to try that, by the way, because when I’m pitching someone on anything I want to win, and so I want them to like me more, or I want them to think that my, that they should say yes more. And I work harder at that. You – I know you hate that. From private conversations with you I can tell that that’s something that bugs you. When we become as pitchers we become media’s business people.
Oren: In every single deal, let me tell you when the capital gets raised. And everybody who’s been through a round will know once you get a lead, right, that’s when you raise capital easily. That’s why they call it a lead, because you call everyone and go, ‘You know what? I have a lead, we’re looking to over-subscribe a little bit. The lead is at $8 million, the total round is at 12. You know, if you guys want to come in we’re OK with that, or if you want to drop off now, no problem. Let us know – click.’ Right?
When you lose the neediness, when you push people away, that is when the most amount of capital is raised, when you don’t have that patina of neediness. When you’re direct, forthright, not supplicating, and pushing people away and saying ‘we don’t need it’ is when they rush in and say, ‘Hey, no, we want to dog pile’ (we call it dog pile), ‘we want to dog pile on the deal and we’re ready to go!’
I’ll tell you a little situation quickly. I came into a deal, and they were going back and forth with these long e-mails with their one potential lead investor – $10 million round. I mean, paragraphs: what if we do this, liquidation preferences, what’s the timing of the close, we need to see the customer documents, more intellectual property!
So I came into the CEO and he’s crafting a four-paragraph response e-mail of a hundred e-mails. And I say, ‘Bob, can I just send this e-mail?’ He’s like, ‘Yeah, sure – can you edit this?’ So I control-A, delete everything, type in, ‘I don’t understand. Are you in or out.’ And I hit send, and he’s going, ‘Nooo!’ Fifteen minutes later, ‘We drop all our requirements, we’re ready to go.’ We’re in on a phone call. I don’t understand – are you in or out? That’s when you stop supplicating, you’re no longer needy, and that’s when you will raise the money, when you can behave like that in every circumstance.
Andrew: I was reading your book, let me hold it up. This is a really good book; this is maybe the best book that I’ve read in the interviews that I’ve done here, and I hope I’m doing it justice here with the interview.
A lot of times as I read it I kept thinking, oh, Neil Strauss. This is so similar to Neil Strauss who I also interviewed here on Mixergy, whose book, The Game, I read in preparation for the interview. For him, that push and the pull had to do with nagging a girl, where he would put down a little negative comment and then give her an opportunity to come back to him. I hope we get to talk about time later; you mentioned that that’s an element here.
But the time constraint pattern you wrote about in Pitch if anything reminds me of Neil Strauss, who said when he went to talk to a girl, he’s say, ‘I only have five minutes before I have to, before my buddy’s going to be outside,’ and then he’d start the conversation, to put that time constraint. I won’t be here forever, you’d better take full advantage of the time that we’re here.
It’s fascinating to see, and it just shows the ideas here go beyond just pitching venture capital, they go for any sale. I could just imagine if I was selling cars, saying, ‘I don’t know that you’re the right driver for this. This may be a little too fast for you – then again, you know, maybe you’ve got a side to you that I’m not seeing right now.’ You’d really be able to zip down the PCH in this, but really push and pull.
What about the idea of novel? I wrote that down to come in and ask how do we do that? How do we become novel?
Oren: OK, and I’m just following up on your – so most people who are familiar with Pitch Anything are calling it, kind of, ‘Game for Business.’
Andrew: So I’m not the first person to say that?
Oren: Actually, The Game and Pitch Anything are the most sold together on Amazon, so if you’re interested in attraction theory, this is game or attraction theory for business. So if somebody says to you, ‘Hey, you don’t have any game,’ this material will give you game.
What’s super-interesting is that you see guys that are really good at this naturally, right? Then they’ll read the book or get introduced to the Pitch Anything material and they go, ‘That’s what I’m doing! Now I know why it works!’
This is game for geeks, and us as technology entrepreneurs, you know, we like blueprints. We’re not naturals, we’re not the smartest (well, maybe the smartest); we’re not the funniest, the most magnanimous, friendly, back-slapping’ frat-boy, beer-drinking’ guy in the room – but you don’t have to be if you have the blueprint for human attraction and you understand how attraction theory works.
It works for capital, it works for friends, it works for women or men. Attraction theory is a human, and capital raising is a human task – there’s no automating of it, right? Even if you look at Angel List or that kind of thing, it all just boils down to that capital raising is a human element, and you need attraction theory. So anyway, I jumped in – we were going to talk about novelty.
Oren: Even before we do novelty, the last thing I want to do is, if you want to see an actionable push-pull, create tension, the best it’s ever been done, it’s in a clip, a Mad Men clip that’s on YouTube of Don Draper doing it. It’s friggin’ amazing! So I think anybody who’s interested (I don’t know the URL), e-mail you or e-mail me – we’re at PitchAnything.net or IntersectionCapital.com. E-mail us; we’ll send you the clip. It is awesome!
Andrew: What’s he do in the clip?
Oren: He basically is pitching business and there’s resistance to it. And they’re saying, naw, Don Draper – I don’t know if we like your ideas.
Oren: I wrote down the quote, so Don Draper stands up and he says, ‘Gentlemen . . . ‘ so they’re giving him resistance on his ideas and he stands up and goes, ‘Gentlemen, thank you for your time,’ and turns to leave.
And they go, ‘What? Is that all?’ He says, ‘Hey, you’re a non-believer. Why should we waste time on Kabuki theatre?’ It’s awesome!
Andrew: I remember that.
Oren: It’s awesome! Why should we waste time on Kabuki theatre? And they go, ‘Sit back down, we’re ready to talk.’
It is the most awesome push-pull you will ever see – it’s wonderful. So e-mail Andrew or e-mail us and we’ll send you the clip, or you can Google ‘Don Draper, Kabuki theatre’ and you’ll see it. But everyone has got to watch that; it’s the best ever.
Andrew: OK, then novelty – how do we become novelty? How do we add novelty? And you’re right, for many of us this isn’t natural. Frankly, for me to talk in public like this isn’t even natural, I struggle sometimes. But if you could give me a good system, man – nobody can work a system like I can! So what do you got for novelty?
Oren: There’s two pieces to novelty, and the fundamental thing is: people come to meetings or talk to you to learn about new things, meet interesting people, learn about places and ideas they have not heard about before.
So to the degree that you look and sound like something somebody knows, you will not get attention, you will not even get in the door.
Oren: What’s critical here is understanding humans as pattern-making entities. We seek to make patterns out of everything. Our mind is always looking, hey, what is this like that I already know, right? And when the brain determines, ‘I know what this is,’ it can check out and go, ‘I can deal with this on auto-pilot, let me work on survival-level things.’
You know, we have to be alert. We came into being, we dropped out of the trees to run across the African Savannah 8 miles a day and survive. We’re survival beings, right?
When we meet another human being our first, at the crocodile-brain level, is: should I eat it, should I screw it, should I kill it? That’s what the mind is concerned with. If you look like something that is well-understood and can be death with kind of subconsciously, you’ll get pushed off and get no attention. Attention goes to novel things and things that relate to survival. So how does this relate to the boredom? Nobody comes to a meeting to see something they already know about, or something they can extrapolate easily. The whole time they’re listening to you, they’re going, ‘What does this look like that I already know?’ The second they find it, [claps] they’re gone. They’re planning their vacation, planning their next deal, deciding what the workout is going to be, worrying about what work they haven’t done . . .
The second they can interpolate, extrapolate, figure out, or create a pattern on what you’re doing, they are checked-out and gone, right? So that’s the importance of novelty. I think we can talk a lot about pattern-making, you know, but just for the sake of figuring out here an easy way . . .
OK, this is really interesting. A lot of my deal decks — and I happen to share deal deck upon deal deck with anybody who’s interested in seeing ones that have raised capital, and I’m talking about guys who struggle to raise capital in 90, 100, 120 days — will come in seven days. $1.5 million, OK? I was just in a deal here for 24 days, $20,000,000. Many times there’s investment bankers or traditional capital-raising guys on it. They’ll have these PowerPoint presentations, This goes directly to novelty. The name of the company is always on the top right, there’s always the correct page number on the bottom right, there’s the company logo on the bottom left . . . it just looks like every single other corporate presentation you’re ever going to see, and when you flip it up, it just begins to look like a snoozer immediately.
If you look at our presentations, they’re totally different. Better? Worse? I don’t know, but at least it’s novel, right? When I raised a couple hundred million dollars, I came up with a guy, and we never had a single PowerPoint presentation. At the meeting. We had some advance materials, but when we went to a meeting we never had a pad of paper, we didn’t have a phone, we didn’t have a pencil, or a PowerPoint presentation. We had us and our ability to manage the human element of raising capital. To me, most of those other things are distractions. Novelty is about not looking like everything else. That will save you some extra attention.
Andrew: OK. You know what? Actually, this is very similar to The Game, where they decided, the guys who went out on Sunset Strip decided to wear different hats or different clothes, they called it ‘peacocking’, I think. Something to make them stand out and not come across as just another guy.
Oren: I worked with an entrepreneur that everybody still talks about today, his company went public here in San Diego, I know him very well. Many times he didn’t wear shoes to the office, right? The concept freaks me out, but that’s fine. People still talk about it today, you know, so that’s ‘peacocking’ or some sense of novelty. I’ve never told anyone this before, so this is an exclusive for your show. I lived on Sunset Boulevard for ten years, and I know all those guys.
Andrew: You do?
Oren: Yeah, I do. Cuz, a 30-year-old guy living on Sunset Boulevard, I’d be out many times and I’d bump into them, and we became friends and went to the gym together. So we’ve talked about all these things. What I’ve been able to do is edit out the things in attraction theory that work on Sunset Boulevard for the boardroom. Now, that’s a big deal, cuz I’ve blown up a lot of deals trying’ to learn this stuff. You know, on Sunset Boulevard, you can try this 150 times in one night.
When you have seven investors, you can’t really blow them out. The guy I worked with, we’re very fortunate, we did fairly large deals that you might come into with JP Morgan or Goldman-Sachs, but he was very loose with what he allows me to do. This will tie back into tension, for example. I was at a conference, and we handed out a beautiful pitch deck, not dissimilar to this. You know, just absolutely full of insight, the kind of thing that looks more like an analyst’s report. Full of insight. I handed it out, and gave everybody a minute to look through it. At the point of the pitch where we’re saying ‘So, are there any questions?’ people started asking really analytical detailed questions. I go, ‘No, no, stop. If you’re not going to ask a meaningful question that adds to the conversation, I’m taking the book back.’ People are kind of in shock, and then I go ‘OK. Let’s try this again. Any meaningful questions?’ Another analytical question comes out. I go, ‘Sorry,’ I walk over, grab the book out of that guy’s hand, and we’re in a tug-of-war, and I take the book back, and I go, ‘Now, does anybody have a meaningful question. That is how you get frame control on a room, it’s how you create tension and that is a novel situation. People still talk about that today in somewhat of a negative way. And if you were at Golden Sax, you’d be fired.
But I tell you what, with the people in the room, we raised $100 million over the next year after that presentation. There’s some people who wouldn’t talk to us because they didn’t like it, but we still raised 100 million out of the room.
Andrew: How can you test this over and over without burning your bridges, and without burning out the number of potential people you can test it on? I’d love to try out the pitch idea somewhere. I’d love to know how you did it, how did you do it?
Oren: What happens is, the first thing is you learn the language of doing this. What is framing? What is frame control? What is prizing? What’s a beta trap look like? What’s alpha behavior? You learn kind of the 19 or 20 words that frame this art form.
Then you can talk about every situation in those terms, and you can kind of with your buddies say, all right, and we do this, all right, I’m not going to fall into the beta trap in the lobby. We’re going to be alpha immediately. Let’s run two push pull loops within the first 2 minutes,
I’m going to time constrain this to 19 minutes. We’re going to qualify them back, at the end of that we’re going to prize all the way from minute 20 to minute 25. Then we’re going to run two intrigue loops, and leave mid sentence. That’s how we’ll talk about playing this.
Then it becomes, to answer your question directly, when you learn to talk about social situations, and business social situations in this language, you can plan out what you’re going to do with a friend. And then it truly becomes game. We leave every single meeting high fiving,
that worked exactly.
I’ll give you a perfect example. Then when you can talk about these terms you decide what you’re going to do with your friend or your companion, or your partner. You do these things and they work, and then you are encouraged, you do it more, and more, and more because it’s a
I want to tie this, I know you have a question. I want to tie this in. when you do it that way, you’re having fun. The biggest thing, when I sit on investment committees when guys are not having fun, it raises a red flag, it means they’re needy, they might not even be good guys to
work with. So when you’re playing this game, your having fun, it’s a strong signal to the investor that you’re confident in your business, your deal points are there, and that you can raise money.
So have fun, make it a game, learn the lexicon of the business, and time constraint. Keep it short, don’t try to go in and run game for 2 hours, you’ll time out. Run your first level of game for 3 minutes.
Andrew: Why, first level of game for 3 minutes, and it seems like that’s one of the answers to my question is, you break it up into different experiments within the interview or within the pitch, and then you discover, OK, this one piece didn’t work so well, this one over here did work so well, and you get to experiment within the interview. Am I understanding that right? I keep saying the interview, I should say within the pitch, right?
Oren: Entry loops, moral frames, power frames.
Andrew: What’s an intrigue loop? I know we’re kind of skipping ahead on our agenda here, but what is that?
Oren: This is awesome. I think that what I see in a lot of deals that I look at when I sit on the investment committee. They kind of give the whole thing away in 2 minutes. Because we look at so many deals, we get it, we try and do this pattern making. There’s no real reason to continue to
If there’s no intrigue to continue listening or be alert, then we start pattern making, what does this look like and check out. So intrigue is kind of alluding to unknown elements that are coming.
A lot of people say, I mean I can create entree in a deal because we work on this like that. But for somebody like you who doesn’t do it all the time, or someone listening, what’s the formula for creating intrigue?
This is what I’ve come up with. You create a narrative that goes like this. Put a man in the jungle. Have the beast attack him. Have him run for the edge of the jungle, but he doesn’t get out. So, as long as you hold him at the edge of the jungle, where the beast can still catch him and he is not yet free, you have intrigue. What is going to happen? If you can create the metaphor in your own deal of, hey, we’re in the jungle of this market. The competition, the customers, the venture capital-somethings are the beast that attack. Right? We have a solution, but, so to the degree you have not solved it for the investor, is the degree you’ve got intrigue. All right? So it’s really, if you go from problem to your solution too quickly you have not created intrigue. So let me be super-specific on how to do this.
You talk about the problem in the market. You talk about the solution in generic terms, not how you’ve solved it. You talk about the solution for generic terms. Now, there’s the intrigue of, okay, I see the problem. And I see how anybody could solve it, or some possible solutions, but how have you solved it? Why are you here? That right there is an intrigue pain. OK? Problem, generic solution, then start to get into your specific solution.
Andrew: Do you do it right away? Do it right after that?
Oren: Every deal is different.
Andrew: I’ll tell you what. Here’s the way I saw it from the book, Pitch Anything. You said this. You have these airport officials sitting in front of your and they weren’t paying enough attention to you. And you said, how do I get these guys to finally pay some attention to me? And I could be wrong in some of the details here, but essentially what you said was, start telling them a story about how you were up in your plane. Describe the kind of plane it was, and of course, the airport people said they were interested in it, and you kept going on with the story. I won’t give away too many of the details. And then you said, ‘The plane nose-dove. It did a nose dive.’ And you got their attention, and then went back onto the deal . . .
Andrew: . . . with the story just hanging there without resolving it. And then you came back later on and told them how you pulled out of it. You obviously survived.
Oren: So, this is right. This is Intrigue Ping 201, right? Intrigue Ping 101 is problem, generic solution, and then start to talk about your specific solution. You’ll have some intrigue there. Intrigue Ping 201 is really to have a very evocative, real-world story about a high-stakes situation, right? In our case, we’re flying in on our plane. We’re leaving the town called Oroville. We’re climbing into the traffic that comes out of San Francisco to head to Las Vegas. As we’re in a giant climb, the plane, BOOM, takes a thousand-foot nose dive, unbelievable. So anyway, getting back to the deal, what I want to talk about is the size of the market, right? That is a massive intrigue ping. And people go, wait, wait, wait. Why did the plane nose dive? What happened? Right?
Andrew: Don’t you lose their attention throughout if you do that, because they’re just going to sit there saying, get back to the nose dive. How did he recover?
Oren: You know, it’s an art form.
Andrew: I see. OK.
Oren: Yeah. And anybody who has a big deal they’re working on and they want to have . . . maybe we can pick someone, or, I’d be happy to work with someone and we’ll . . .
Andrew: I see. You know what, I get it. A specific example would have really been helpful. I wish we still had a live audience, just so we can take these tactics and show how they would apply to people’s real-world issues. If you guys ask for it, maybe we can get Oren to come back on here and do that. But, I’ll let you guys email and ask for it.
Oren: I’ll give you a quick one. Yesterday, so I’m on the train to go to a pitch. Right? Just outside of Fullerton the train slams on its brakes and hits a car. So, I’m on a train to L.A. and it hits a car that’s on the track. Anyway, so everyday life provides these . . .
Andrew: You know what? I’ve heard Robert [Scheldeny] do this. This is one of his tactics for giving presentations. What he does is he’ll put one of these stories out there, and then he’ll say, ‘To understand how I got out of that situation you have to understand this other thing over here.’ So, now you’re focused on this other thing that he wants you to understand because that’s how you’re going to solve the first issue. I see how it takes a little bit of experience, and it takes a little bit of thought to come up with it. But I also understand how you put that big story out there and you get people’s attention. I see how the intrigue works. What do you call it?
Oren: Intrigue ping. The intrigue ping. Let’s talk because we’re there. I don’t want to guide your interview, but I think I want to talk about this 20 minutes.
Andrew: Why 20 minutes as a limit for a conversation? Why not go for an hour and give them more data?
Oren: If there’s one thing I can leave you with besides pricing, two things I can leave you with, initial pitches need to be 20 minutes long. Now the meeting might be an hour, an hour and a half. The pitch, 20 minutes. It is the span of human attention. Google it. We hired cognitive psychologists, we’ve worked with brain guys, a neuroscientist. It is the span of human attention. 20 minutes. I mentioned the book, but there is a book by Jerry Seinfeld, comedian. It’s talking after he left Seinfeld. He decided to go back out on tour.
Oren: He says it’s hard to build a comedy routine, so when he’s going to go back on tour, he says, ‘Hey, I’ve got about three minutes of material.’ Three minutes of material. He goes back out on stage and he goes, ‘Here’s what’s interesting. I’m Jerry Seinfeld. The biggest celebrity name probably on the planet. Everybody knows me. I go up on stage, they all give me three minutes of, ‘Hey you’re Jerry Seinfeld,’ before I actually have to be funny and deliver hard-core comedy content.’ Nobody listens to Jerry Seinfeld for 20 minutes. Just because he’s Jerry. Who the hell is going to listen to you ramble on for more than 20 minutes about some, whatever it is, you have? The first pitch, and I understand there are partner pitches that last longer and you get into details. But the full on, this is what it is, the problem, the solution, the big idea, the upside, the downside, the pro forma, the competitive landscape, the competitive advantage, the seasoning of revenues, the team and the execution so far, the whole deal, 20 damn minutes, please. Then stop, qualify and then that kind of leads us into a conversation about a hook point. Right?
Andrew: OK. Let’s do that. Let’s transition to there. I like how you’ve taken control of the agenda. This is one of your tactics in action right here within the interview.
Oren: People out there, Mixergy audience, today I’m interviewing Andrew Warner, a really good guy. I love what he’s done with the site. I follow it. It impresses me. Andrew, I have a couple questions for you today. What we’re doing now is called calibration. I think you and I have reached a hook point.
Oren: Let me try and talk about this. When you first begin a social interaction, and pitches for capital are social interactions. You have got to add tons of value, all the value, up front. I developed this concept of value pipes. You imagine there’s a pipe between us through which value flows. When we first meet, I try and stuff so much value through that pipe, one way. What most people do is put a little bit of value through the pipe and expect a little bit to come back. It’s called social reciprocation. That’s what we’re wired to do. Ignore that instinct. When you have a value pipe, shove value as fast and as furious as you can through the pipe. Eventually, what will happen is the person will feel like, ‘Wow. I got so much out of this. I need to reciprocate.’ That point of reciprocation is the hook point. You’ll know it. You’ll know it when people stop asking analytical questions, stop asking deal-killer questions and they ask real, meaningful, discretionary questions that push the conversation forward and aren’t meant to cut you off at the knees or show you how smart they are or for them to push back on you, on your numbers. When you get real questions that show some thoughtful insight and are reflected in a positive way, you’ve reached the hook point. Once you’ve reached the hook point you don’t have to gain anymore. You can calm down. Now I’m not saying give it up, but for 20 minutes you’re pitching; you’re doing [??] pang, running novelty, creating tension. You’ve got a time constraint. You’ve got frame control. You’re running power frames, moral frames, intrigue frames. You’re doing all this game stuff minute by minute. Then, you’re going to qualify the investor and turn instruction and pitch, right? Hey, tell us about yourself in terms of, why would we take you as an investor, because that’s important. So, they’ll qualify back, right? And then you’re going to push on them a little bit more and start looking for that hook point where they are no longer asking detailed analytical deal killer questions and they’re adding value to the social interaction, to the pitch. They’re actually helping the pitch out. At that point you don’t need to gain. You can just calibrate and you guys are a couple guys kicking around the table talking about some ideas. That is the best thing in the world, but you can’t let it go on forever.
Oren: And you’re calibrating what? So, you’re saying at that point you’re no longer pitching and trying to get them to say yes. You’re now working with them to try to work out the deal together?
Andrew: That’s the point of virtually opening a Coors Light and working together. They’ll bring some ideas. Hey, what if you did this? Have you guys thought about this? Typically, what we hear is hey, we know a guy at IBM. He would love this. If we did this we should show it to him. Oh hey, we know the commissioner at the FDA, right? If we do something. You know, I’m going to call him this afternoon and have him get in touch with you guys. You know, I never thought of it this way, but if we use your product with this other company we have, that could create some real synergy, I imagine.
Oren: So, what do I do when I hear them say things like that?
Andrew: It doesn’t matter. You just jump in the conversation, pop open your virtual Coors Light and kick it.
Oren: I see. Stop trying to push at that point. Just go back and forth and riff about the deal.
Andrew: [??] is very, very emotionally demanding. It requires a lot of energy. Give yourself a break. Just join that conversation. Have fun. Be responsive. Come up with your own ideas. Do that for eight, nine, ten, twelve minutes and then kind of go into the next phase.
Oren: What’s the next phase?
Andrew: The next phase I think, is really, let’s see. So, once you’re beyond the hook point, you’ve calibrated and talked for a while, right? You need to start closing up shop, alright? So, here’s the thing: As every investment committee that I’ve served on, the company will stay for as long as you let them. They never time out. If you don’t ask them to leave or say hey, you know, we’re on to our next deal, why don’t we wrap up? They’ll stay for one hour, two hours, three hours. They’ll go and, the longer they stay, the more we know they’re not busy and they don’t have anywhere else to go and really, I mean, why aren’t they wrapping up here and going to call customers, right?
Oren: I see.
Andrew: So, once you’re beyond that you go hey, guys this has been…once you’re beyond the hook point and the calibration, you know guys, this has been fantastic. Great first, second conversation. We have got to run to another meeting and we’ve got customers. I mean, it has to be true and authentic, but we have to go. Let’s work out some follow on steps. When you leave yourself, it is such as commanding signal, that you have a real deal and you have stuff to do and you’ve given your pitch. You have controlled the interaction and the fact that you’re willing to leave, kind of a few minutes before your allotted time, is such a strong signal again that…
Andrew: …what you have is real. It is and so a lot of people say hey what’s your guys… and you close so much capital. They want to rush right into the closing technique, right? We literally, have no close….because it’s all done beforehand. Let’s get back together. You email us. Our best close is like: You email us. We’ll email you. Let’s talk in the next day and figure this out. That’s probably the best close we have.
Oren: Really? So you intentionally don’t close? You don’t have a contract there? You don’t ask for the order? You don’t say we’ll need you to sign this by a certain time? You just say, OK, now we’ve got another meeting. We better get going. If you’re interested in following up, let’s do it by email. That kind of thing?
Andrew: It depends on the situation and that’s probably the most we’ll do.
Oren: This goes against what most sales people are told to do. You’re supposed to ask for the close and be brave enough to ask for it. Why? For me, it’s to create wanting. Alright? I work to create wanting. If somebody likes . . . Nobody does, nobody marries someone, they don’t buy a car, they don’t take a job, they don’t go on a vacation because they like it. Nobody does anything out of liking it. Liking is analytical and it’s a cold process. Wanting is what we call a hot cognition.
So, if somebody says to me, ‘Hey, you know we kind of like this idea, we’re going to kick it around.’ I go, ‘Look, if you like the idea, don’t worry about it. Let’s not do it.’ You’ve got to come to me and say, ‘Oren, I love this deal and I love you, and we want to do it.’ OK?
And they’ll say, ‘Yeah, yeah, you know, we’re totally interested in it and we got to kick it around.’
I’ll go, ‘No, no, no.’ You’ve got too tell me ‘Oren, we love this deal and we want to work with you.’ If you can’t say that, it’s not going to work out. I mean, have you ever been through a closing? Due diligence? It’s crazy. Unless somebody is really motivated it’s going to blow up anyway. Right?
Andrew: I see.
Oren: So, liking means nothing to me. Right? We have to create this sense of wanting and . . .
Andrew: Well, doesn’t having a time limit on the deal create that sense of wanting? To say, ‘Hey, if you don’t close this within a week I think we’ve got, or we’ve got someone else but if you’d like to close it within a week we could probably get you guys in there.’ Doesn’t that time pressure create more want?
Oren: It creates want but it can be a used car sales tactic. It’s got to be used carefully. So . . .
Andrew: OK. You’re saying if you’ve done your job right up until that point they want it so badly that they can’t wait to follow up with you and ask you if you’ll close for them.
Oren: You know, in some cases, it’s smart to agree on an action item. Right? And an easy one is, ‘Let’s get this deck to you so you have it on file. Let’s agree to sync up on Tuesday afternoon and see where your heads are at.’
Oren: OK? This train is leaving the station at 2:23pm on Friday afternoon. It’s got Amtrak on the side. If you’re on it then you can go with us. If you’re not on it the train is leaving. Right? Then we get into the whole capital raising concept of rolling closes but you have always got that deadline. But it can’t be a jam [section]. Deadlines have got to be far enough out that they’re comfortable but also real so that the clock is ticking down.
Andrew: OK. I know we’ve gone over our time, if you have a couple of minutes, I’d love to just ask you about the [??] brain. I think it’s important especially considering the audience that we have here. We tend to be very analytical. We tend to think that the person who’s talking to us, if he’s asking about numbers, then it means that he’s taking the conversation to a rational place. We indulge those requests for numbers. You’re saying, ‘No, no, that’s not the way to close a deal.’ Tell me about that.
Oren: As we became more and more successful raising capital, I mean, I’m talking $100,000,000, $200,000,000.
Andrew: Who are you raising capital for, by the way? I haven’t asked you that in the interview.
Oren: I don’t mention the guy’s name but he’s very well-known. It was just he and I. When he started, he was with me. He was probably a $2,000,000 or $3,000,000 guy. Today he’s a $60,000,000, $70,000,000 guy. I raised all the capital for all of his deals.
Andrew: To do what? Oh, I see. He wants deals put together that need money. You’re the guy that raises the money for them. What kind of deals are we talking about? What kind of business is he in?
Oren: So, a wide range. That’s another reason we were able to develop this. We bought financial securities, small companies, a wide range of technology deals and even big commercial real estate. We bought a plane. Most of my world is raising capital for technology and series A, B and C kind of capital efficient businesses. Right?
Oren: But this guy was very opportunistic and off the capital that I raised for his deals, and it was just he and I, he’s now an $80,000,000 guy. As I was saying, as we moved through $100,000,000, $200,000,000, $300,000,000, $400,000,000, people were like, ‘How are you doing this?’ I mean, normally a team of 10 . . .
Look, at GoldmanSachs they’re going to raise $1,400,000,000 by Monday night. But they’re going, ‘Hey, you’re two guys. How the hell is this capital being raised at such a pace?’ And so, I was very interested to learn myself, so I hired a cognitive psychologist. And I reflected to him what we were doing. And here’s what he reflected back.
The human mind, we think of, like Andrew Werner. There’s a big brain in there, doing all its stuff. But that’s not how it works. There’s three brains in there. There’s the old brain, the crocodile brain. And it’s focus is survival. There’s the mid-brain which understands social relationships. The policeman, the boss, I have to be good to you, my co-worker, I should be good to you, but I don’t have to, and my underlings, I can kick around like an old cat. Right? The mid-brain understands that. The neocortex, which everybody is familiar with, is the smart, analytical, linguistic, problem-solving, completely unemotional part of the human mind.
And so those are the three parts. But what the interesting thing is, all messages, all human communication come in through the primitive brain. Because that’s the part that measures survival. All right. Like I’m talking to you now, and having solved all this from the neocortex. Problem, and every pitch, comes from the neocortex.
Smart, linguistic, problem-solving, analytical, mathematical. So I think if I developed my pitch in the neocortex, I have to pitch it to your smart, linguistic, capable, problem-solving brain. Like when I set an Excel file, you’re going to open it up and Excel. It makes sense, right?
But that’s not what happens. You pitch from the neocortex to the crocodile brain. And the crocodile brain is focused on safety and survival. All right?
I’m going to bring this home in a minute. So every pitch starts off by being filtered. Have I seen this before? Is this visual? Is this emotional? Is this going to be fast? And is this got lots and lots of pieces or can I understand it easily?
The crocodile brain, in some ways, is the CEO of the mind. If you go to the CEO’s office, right? Up four levels, to pitch an idea, and you go in, and the other is high-contrast. Like the crocodile brain, the first filter that hears every idea, doesn’t understand shades of gray. It’s either this or that. So if you go to the CEO of Hewlett Packard, and you’re an engineer and you came up with an idea, he’s going to go, “Hey, look, Andrew, you got two minutes. What’s the idea?” Unless it’s visual, high-contrast, fast and simple, he’s going to go, “Look, this is not well-organized enough. I can’t deal with it. Bring it back when it’s easier to understand.” So, the crocodile brain, in many ways, is the CEO of the mind. Right? You got to get past those filters. Visual, fast, simple, high-contrast, easy. Then you can move it up to the neocortex and kind of get that interaction.
But you first get filtered out by this croc-, so you’re not pitching your smart, linguistic, capable mind to capable mind, you’re coming up through the crocodile.
Andrew: So, if I’m pitching and the person is talking about the numbers, and it’s like talking to their accountant all of a sudden, how do I shift them away from that to a place where he can feel more emotionally connected and more emotionally invested in my pitch and be more willing to say yes?
Oren: This is the easiest. Once I show people this, it changes their life.
Andrew: It changed my life, my friend.
Oren: So if you properly set the time constraint for an initial pitch of 20 minutes, and somebody moves into that analyst frame, it happens all the time, “Hey, we’d like to get some more detail on these revenue contracts.” You know, what are the milestone payments that the customer is making to you?
You say, “Hey, look I’ve got about 20 minutes here to show you who we are and the major components of the deal. The product, our competitive advantage, and what we do, and who we do it for.” Right? We would not be here today if the revenue contracts did not have teeth, cause we know we would blow out and do diligence.
Let’s stay focused on the big idea, and when it gets to it, all the details are in the binder. And look, if you blow out and do diligence, I have no problem. But let’s, at least, decide if you like me, and if you like the deal, and the product. Because until we’re there, there’s no point in getting into the details.
I promise you it’s in a binder. We would not have invested our time to come here with ginned up information. Let’s focus on the chemistry between us, whether you like us as a team, the product, and the market size. That’s what we can accomplish in the twenty minutes we have.
Andrew: So you make it the responsible move, to put off the numbers, becomes the responsible decision to make right now. I see. And it even gives you more credibility the way that you presented it, by saying, we wouldn’t be here if we didn’t have the solid numbers to show you, the numbers with teeth as you said.
Oren: here’s the line, that I think is wonderful. Look, I have no problem, if you blow-out in due diligence. You know, because that happens. But, let’s get there first. And we can’t get to due diligence and deciding if you even like this thing, at the same time, right? So, let’s focus on the big important things.
Andrew: All right. Let’s end this with just an understanding of the value of a good pitch, of the work that we’ve done here. If we do right, what’s in it for us?
Oren: So, first of all, I know we’re running over time but I’ll try and make this easy. When you pitch like this, if you see one of my pitches, as an investor, you go, holy God of Christ, these guys can raise money. They understand the language of the capital markets, they understand the mind of the investor. They know their deal extremely well. And, they know how to raise money. So, now I have to decide, it’s a time constraint of its own. As the investor, I have to decide if I’m going to go with these guys soon, because I know they’re going to raise money. More importantly, if as an investor, I put money in, and we need some of kind of interim round, or we need more capital. I know I don’t have to go in and replace the management team, right? So, if we more capital, as the investor, I know it’s not only going to be mine. I can put these bastards out on the road, to raise more money so I’m protected. And, not only that, if I’m looking for an exit, I believe, I don’t have to go through the drama of replacing this management team, because they can take it all the way through. These bastards know how to pitch. And so, I believe they’re going to raise money soon, they can raise the follow-on money, and they can take it all the way to exit. And so, that sub-communicating those things, with a great pitch, is incredibly meaningful to getting a term-??.
Andrew: I see. You’re saying that they feel that if, he pitched me this well, he’s going to pitch everyone else that we need to in the future that well. Whether it’s more money, whether it’s more people that we need at the company, whether it’s a better exit, we know he can do well because he pitched us this way, he’s going to pitch them just as well. I see. So it is reassuring, to be pitched by someone who’s that good, who knows the process.
Oren: Absolutely. Do we have time for one little…
Andrew: Yeah, let’s do it. We went way over, but my audience is starting to recognize that if I go over, that means that the interview is really good and that’s when they especially download it.
Oren: All right. So, last week, I pitched a major. Oh, I’m going to get myself in trouble now, a major…
Andrew: There’s no editing, so be a little opaque.
Oren: Yeah, a venture firm, for the partner meeting.
Andrew: We talked about this last week, this, right? OK
Oren: Thirty guys in the room. This is the partner meeting. This is where they’re supposed to throw hard fast ball, curve ball pitches. The ninja swords are supposed to come out. This is the partner meeting where they really it’s the go, no go, from the firm. So, we gave our pitch, and we did all of these things exactly as we are talking about right here. And the couple of venture guys, there’s thirty venture capitalists in the room with their analysts. And there are a couple of softball questions. So, the founder of the firm, is sitting in the back of the room quietly. Finally, he’s so frustrated that nobody is pushing on us, he literally gets up out of his seat. You know, he’s there as an observer. Walks to the front of the room and starts asking cold, mechanical, hard questions of us, as if to say, is nobody here going to push on these guys? Are we going to sit here drooling into our Diet Cokes, while they take our money? And so, when you do this right, these are the kind of experiences that you will have for yourself. And it’s the best feeling in the world.
Oren: Hey, Andrew, I lost the audio, so…
Andrew: Oh, sorry about that. What I was thinking was… I’m glad you caught that. There we go. I was just say, I really urge people to get a copy of this book: Pitch Anything. We kind of scratched the surface of the ideas in the book, but there are more ideas that we haven’t even touched on. There’s stories we didn’t talk about like the French waiter story, which I think you’re right, we shouldn’t have included that in here. It’s better read than it is told here in the interview. We covered a lot here that’s useful.
Guys, get the book. I promise you’re going to love the book. And if you do, I’ve got these notes here in front of me. Is it OK if I give it to people who got the book, the notes that we’ve been using to guide us?
Oren: I have so much support material, if somebody indicates to me that they’re interested in knowing this stuff, they can email you, they can email me because as we built this technology, we built lots of support material for ourselves, and I’m happy to share it. We have…
Andrew: I want to see that.
Oren: Yeah, we have [??] that work, we have tons of notes. We have all the science article that are curated, so I might have a hundred scientific articles that support all of this stuff, a cognitive psychologist, even with the notes from developing material. I’ll share all of it. So to the degree the people are interested, an infinite amount of material.
Andrew: I’m interested. What do I do? I email you after this interview and ask for it for myself? I’d love it, I’d love it. I love it. Is this on audio book, too, by the way? All right. I hope it is. You know what? Screw it. I know we’re out of time here, but I’m going to check audible [SS] and see if I can get a hold of this on audio book because I think this will be a book I’d want to listen to again. Audible.com. That’s where I get my audio books. Let’s see. It’s kind of boring for the audience but I think it’s also an important question to answer for them so they’ll hang on here for it. Pitch Anything…let’s see.
Oren: I’m not sure because they probably would have asked me to read it and I didn’t.
Andrew: Oh, OK. No, it’s not. All right. This could be considered the audio book, the audio summary of the book. Get the book. It’s really worth reading. Pitch Anything.
Oren: Yeah. I mean, the last thing I would say is if you’re out raising capital, you want some source material of deals, and I never had this when I was learning. But if you want some source materials of deals that went, we’ll help you get that stuff so you can copy, innovate. I really want a lot of people to know this so we can push back on the private equity, the hedge funds, the venture capitalists and even up the game. They do this every single day. You don’t, so you really need these Ninja skills to go in. Otherwise, you’d just get … The guys with capital, they’re wood chippers for deals because they do it all the time. What I want you, is I want you to be the guy who when he goes in the wood chipper, it bends the blades. That’s what I do every single time and it is a very satisfying feeling.
Andrew: Wow. Thanks for doing the interview. I hope you’ll come back on and do another interview. I’d love to find out how you learn this stuff. Maybe that’s a whole interview in itself. For now, thank you and thank you all for watching.
Oren: Thanks, Andrew.