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The Most Pervasive, Pernicious Offense

Thom Ruhe

The Wall Street JournalThis post was originally written for The Wall Street Journal.

I was having a beer with a friend the other night when he mentioned a startup in our community that had recently announced a “pivot” in its business model. He said that it was now pursuing a different “value proposition” in an effort to “monetize its client base.” I nearly showered him with beer while admonishing him for being a bad cliché of Valley speak.

It reminded me (regrettably) of an investor pitch I recently sat through wherein the wannapreneur assaulted me likewise with jargon that is all too acceptable and meaningless in the startup world today. Upon further reflection, it was one of several pitch practices that I would like to see die a quick death.

The use of jargon is perhaps the most pervasive and pernicious offense being perpetuated within the plan and pitch community today. I believe that people who use jargon think they are establishing themselves as being part of the “in-the-know” crowd. Instead, it says to me that they have become quite comfortable residing within the flock. That is, a flock that feels a false confidence in the herd mentality that has legitimized “going to market with a freemium model” that we will later “pivot” to “monetize” via “social media, advertorial, user-generated, crowd-sourced content.”

Translation: We don’t know how we are going to make money, but we are going to start by giving stuff away.

The next two related practices that invoke my ire are the entrepreneur’s assumption of complete knowledge of the market and/or stating opinions as facts. Far too many pitches start with: My big idea is this, and that is a HUGE problem for humanity.

Really? I am not sure that humanity is suffering for not having pet fur coloring options. I am not saying that a line of pet salons offering fur dyeing services can’t be successful; I am simply saying that I have yet to read a survey that says 89 percent of people feel they need greater color options for their pet rabbit Snowball. In the words of Mark Twain, “It ain’t what you don’t know that gets you into trouble. It’s what you know for sure that just ain’t so.”

The false assumption of complete knowledge frequently surfaces when discussing the startup’s competition. For example:

“No, absolutely no one else is doing anything remotely like this.”

This claim is so distracting that I will usually, on the spot, search for contradictions and, nine times out of 10, offer names of apparent competitors. This usually results in seeing the presenter squirm, disavow, discredit, or in the most egregious cases, get offended by the fact that I contradicted him or her within three minutes of this bold claim. The founder might as well go home; he or she has completely discredited his or herself. A better claim would be that there are some variations of folks doing similar things, but we are better because {insert differentiator here}.

The above offenses are preventable by being prepared for the presentation.

The final frustration I wish to highlight goes to the heart of how one manages the “moment,” namely, the point in time in which a founder stands in front of investors he or she is hoping to convince with her pitch.

In this context, many people will offer the founder multiple forms of actionable feedback, either by asking question or through body language. Far too many founders lack adequate listening skills. When a founder fails to respond to the questions, that makes it hard for the investor to offer an endorsement.

Instead, founders must actively listen for cues and hints as to where the investors are leaning. Some people would suggest that this “skill” is part of what is called social intelligence – others say it’s charisma. Call it what you will, I think it is a skill that can be developed and refined, and when coupled with some of my other suggestions, can ultimately increase the odds of success.

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