The “Yeah, Right” Rule

Similar to the “So What” rule, every time you make a claim, prediction or forecast, imagine your audience is thinking to themselves “yeah, right!” in skeptical fashion immediately after seeing/hearing your claim.  Make sure you aren’t asking them to make a huge leap of faith without supporting your claim.  There are a variety of ways to do this.  I’ll start with some examples and then dive a little deeper.

  • Direct customer/prospect feedback – often the most powerful, especially if a large enough sample size
  • Historical results from your own company
  • Quotes from industry analysts or well-known pundits
  • Research statistics from an analyst report or independent survey
  • Evidence from a competitor or other vendor in your industry (perhaps publicly revealed in an interview, press release, etc.)

Let’s look at an example of how this might play out in real life.  During your pitch, you say “With minor feature enhancements we will be able to expand into two new verticals, which quadruples our available market”.  Imagine the investors in the audience are thinking “year, right!”.  Actually, they could be skeptical about your ability to expand into two new verticals simply with minor feature enhancements or they could be skeptical about the end result quadrupling your available market.  Here are some alternate statements that attempt to head off the skepticism:

  • “With minor feature enhancements like ABC and XYZ, we will be able to expand into two new verticals – namely, manufacturing and distribution.  We’ve already closed business in those verticals with early adopter customers that saw enough value in our current feature set.  Additionally, 10 other prospects from these verticals have beta tested our current product and have given us letters of intent to purchase when we deliver ABC and XYZ.”
  • “With our expansion into the manufacturing and distribution verticals, our available market will quadruple from $0.5B to $2.0B, according to the just-published market sizing report from Shockwave Innovations.”

At times you might need to use deductive logic to support your claim.  For example, “Since A is bigger than B and B is bigger than C, then A is bigger than C”.  For this method to work, the setup to the deductive logic (the first 2/3 of the statement) must be well-known and undisputable.  Otherwise, you’ll also need to prove that A is bigger than B and B is bigger than C.

I often get asked how optimistic and aggressive the company’s claims and forecasts should be.  Investors are accustomed to seeing pitches that predict to save the world and every financial projection is shaped like a hockey stick that goes almost vertical after some period of time.  So this should cause you to lean towards being optimistic and aggressive, knowing the skeptical audience is going to apply some discount factor right off the top.  But you don’t want to go so crazy with your claims that the reader thinks you are clueless and out of touch with reality.  So something in the confident and aggressive range is what you’re looking for rather than something in the outlandish and crazy range.  Forcing yourself to support your claims and projections using the methods described above will also help you stay reasonably aggressive.

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