I recently heard Dr. Robert Wiltbank from Willamette University use this analogy and loved it so much I had to share it with others. Entrepreneurs are, by nature, very optimistic. It’s one of their core survival skills. But this often makes it hard for them to recognize signals of negative feedback. This applies to things like the success of their product and progress towards the business plan targets. But it also relates it to investor feedback while pursuing fundraising, customer feedback while pursuing a sale or vendor feedback while trying to secure a partnership.
Experienced sales professionals are trained to listen for negative feedback and use various techniques to assess the real viability of the opportunity. But most co-founders aren’t experienced sales professionals and the techniques I’m referring to aren’t easily learned from a blog post or a book. I’ll explain further.
One way for a founder to compensate for their optimistic bias is to consider every response short of a “yes” to be a hard “no”. Here are some examples related to trying to close deals or business partnerships:
- “Maybe” = no
- “Let me bring it up with my boss” = no
- “Not now but perhaps in the near future” = no
- “I love the idea but we’re just slammed right now” = no
- “Let’s have a follow-up meeting to get into more details” = no
You get the idea. How about the same exercise for pitching investors?
- “Let me think about it for a little bit” = no
- “Send me your financial model” = no
- “Send me a copy of your business plan” = no
- “Let me know once you’ve raised $___” = no
- “I’ll talk to my other investment partners” = no
Treating these responses as a “no” doesn’t mean you should completely give up on the opportunity or desired outcome. The point is to realize that you’re not getting a real “yes” and therefore should not assume you have the necessary validation to change your spending patterns, hiring plans or product direction. Instead, continue to work to get a legitimate “yes” and then take any corresponding action that makes sense. Just realize that a single “yes” might only be the first step of a needed multiple of “yes” responses.
Also understand that getting a “yes” from an executive at Google related to a strategic partnership is one thing. But if it’s a “yes” from the first reseller interested in selling your product, you probably want to get the same response from other resellers before concluding that you’ve got a channel-ready product on your hands.
Getting to Yes
If you keep getting new excuses or homework assignments in your pursuit for a real “yes”, you’ll need to try various approaches for determining what the true concern is. My favorite open-ended question in this regard to use with investors is “What is it you’d need to see for this to be an exciting investment opportunity?” It’s hard for an investor prospect to wiggle around answering that question. With a little luck, they will be honest with you and you’ll know more specifically what is concerning them or what’s missing.
The same concept should be valid for different settings, but just with a slightly different ending to the question.