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The “So What” Rule

so what rule

I use this rule all the time when advising startups and early stage companies.  It has all sorts of sales, marketing and fundraising application, regardless of your company’s stage.  I call it the “So What” rule because it’s an easy way to think about it during a conversation or presentation.  It’s a fundamental element of various sales and presentation methodologies that are just called something different and with a longer explanation.  Here’s the simple approach, using an investor as the audience.

Remember that early-stage investors are skeptical to start with, and rightfully so.  Most investments by angels and VC’s either fail completely or return less than what they invested.  They count on something like 1 out of 20 to perform extremely well.  Combine this with the regular exaggerations that are made by startup founders and you might appreciate the investor skepticism.

For more info on how to think about exaggerations, read my article titled “Aspirations, Exaggerations and Outright Lies“.

Because of this, every time you make a statement that you think represents a key benefit or differentiator (your product/service, your approach, your business model, etc), imagine the reader or audience member is thinking to themselves “so what!” immediately after reading/hearing it.  I sometimes imagine them thinking “so what, why should I care?”

Make sure that you answer their “so what” concern by substantiating your claim in some specific way.  For example, use phrases like “The benefit of this is …..” or “The reason this is important is ….” or “The difference between this and the rest of the market is …”.  And if you want to put a bow on your claim, finish with a supporting real-life example”.

Here is an example to demonstrate the point:

  • Initial claim:  “Our system includes advanced computational analytics created in collaboration with M.I.T. and published in the most recent International Journal of Analytics.”
  • “So What” enhancement:  “The unique information our system provided to our pilot customers saved them an average of $50,000 per year for each project they used the system for.  In fact, Google’s VP of _____ told us that they were able to ______, which is something they never dreamed of before using our system.”

The enhancement that answers the “so what” question doesn’t need to be that long.  It just needs to do the job.

Use this rule when reviewing your pitch deck, sales briefing presentation, press releases, website copy, etc, etc.  Almost all of us are guilty of making shallow claims that don’t get to the “so what” information the audience really cares about.  And often times you should actually flip the narrative backwards from my example above by starting with the “punch line” conclusion.  In other words, the revised narrative above would, instead, flow something like “Our pilot customers reduced the amount of time spent on ___ by 75% and projected an average savings of $50,000 per year for each project they used the system for.  Our solution enabled this due to the advanced computational analytics ….”.

You get the idea.  Start with the benefit and then describe how you accomplished it.  You might think of this as starting with the “so what” and supporting with the “what”.  Actually, many times you can just claim the “so what” and wait to see if the audience asks how you were able to accomplish that.

Here’s a step-by-step example that ultimate gets to the final punch line, which should instead be the starting claim:

  1. We invented a way for Tellurium to bind with Oxygen  (so what?)
  2. Your body is 65% Oxygen  (so what?)
  3. Our method allows this binding to happen inside your body  (so what?)
  4. The binding works especially well with abnormal cells  (so what?)
  5. This cures all forms of cancer!!!  

Why didn’t you just start by saying that you cured all forms of cancer?  In fact, starting with the final statement allows you to mention the previous key items in the list as the other person says “wow, how do you do that?”  But instead of starting with the HOW, start with the WHAT (the SO WHAT).

One more example:

  1. Our solution deploys thousands of IoT sensors throughout a power plant  (so what?)
  2. The data from these sensors can be time-synchronized to the millisecond and deeply analyzed  (so what?)
  3. Our patented AI algorithms can detect, and take automatic actions on, abnormal functions  (so what?)
  4. Our solution prevents a radioactive meltdown at nuclear reactors!!! 

If the problem your company solves is brain cancer or nuclear plant meltdown, you’re in much better position than if you solve the “which night club should we all go to tonight?” problem.  Regardless, give the So What rule a try.

The close cousin of the “So What” rule is the “Yeah, Right” rule.  Use them together for a more effective presentation or sales pitch.

Don’t binge read my whole blog, just order the book!!!

Dramatically improve your odds of fundraising success by reading my bestselling book titled Startup Success: Funding the Early Stages. It leverages my knowledge from making more than 300 early stage investments and from raising more than $80M in private and venture capital.

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