Archives For December 2012

Salesmanship of Fools

December 26, 2012 — 7 Comments

I was talking to a fellow VC the other day, who I know but not well, and he was clearly searching for something to compliment me on, and what he come up with was “hey, I really appreciate how you’re not always nice on Twitter.” As I replied “thank you… I think?”, I was actually thinking that my portfolio companies sure I wish I were nicer, and followed the standard tradition of hyping them at every turn. Hopefully most of them went in knowing that salesmanship, in the traditional sense at least, is not my forte.

They should also know that it used to be worse. When we were starting Village Ventures 12 years ago, and particularly in the aftermath of the bubble, I used to have a downright dystopian sales strategy. I would go in to see potential investors and spend the first 20 minutes talking about how horrible the environment was: “You know, I agree, that’s bad news, but what’s worse is this…”. After setting the appropriate nuclear winter tone, I would go into my spiel: “As we’ve discussed, it’s not obvious that anyone will ever make money again, but if anyone were to, it’s not impossible it would be us…”. Then I would get to my big finish: “I’m sure this isn’t a fit for you now, but if we’re both still in business in a year or two, we should circle up and chat again…”.

After months of this, my then partner Bo took me aside and explained how things worked. To paraphrase, he made it clear that while I wasn’t ever going to star in Glengarry Glen Ross, I could get better. First, I needed to understand that being negative is a crutch. It’s easier to look smart when you’re being critical and dour, and so it can be a refuge for the insecure. Second, people not only expect salesmanship, but they actually want to be sold. Investors know that salesmanship is important to success, for VCs and particularly for entrepreneurs, so in a sense investor meetings are not only a test of your strategy, but also a test of how well you can persuade. This coaching was at least incrementally effective and I’m proud to say I’ve gone from horrible to bad over the last decade or so.
This all got me thinking about the different levels of salesmanship, which I think could stand to be better understood. The top rung is probably pretty obvious: to paraphrase Lewis Gersh, the prototypical salesman is one who could not only sell ice to Eskimos, but could sell them Sarah Palin for Governor as well. There is something deeply cynical, though obviously effective and maybe necessary, about this type of sales … it requires no link between reality and what is being claimed.

The other end of the spectrum is where I think I’ve ended up, which is that I can be persuasive if and only if I believe in what I’m selling, and my belief system is pretty well defined and constrained by a normal probability distribution. In other words, I can definitely be wrong, but not on purpose. The middle ground is the area I find most interesting, which are those people who technically only sell things they believe in, but are capable of such wild optimism (when it’s in their self-interest) that they can believe a whole hell of a lot. As such, the distinction between them and the unethical (my view) salesperson is a pretty fine line, when it comes down to it.

I’d like to think that at the core of entrepreneurship lies innovation, but you could make a good case that the actual core is salesmanship and persuasion. As such, I think it’s important for all of us in the field to remember that it’s a multi-round (and increasingly public) game that we play, which has enormous implications for sales philosophy and strategy.  One of my general gripes about entrepreneurs and VCs is the hype machine aspects of it, and i think too many people take comfort that they aren’t actually “lying”, they’re just being optimistic.  Ultimately the choice comes down to either a)sell stuff you don’t truly believe in; b)be ineffective because you don’t feel comfortable selling what you’re working on; or c)only work on projects you truly believe in, so as to be in a position to sell like crazy. I think the answer is obvious.