Mastering Influence Is Key To Entrepreneurial Success
Do you sometimes think you could be more impactful? Do you sometimes look at others and wish you could be as commanding and effective as they are?
If so, you’re not the only one. In my experience, entrepreneurs who master the use of influence are significantly more successful than those who don’t.
As an entrepreneur you are continually trying to convince people to do things that may not seem rational or logical. You’re trying to persuade investors to hand over their hard-earned money despite the very low probability of success. You’re trying to convince team members to join you from the comfort of their salary, secure lives. You’re trying to persuade your first few customers to try your product or service when you have little or no evidence it works. You’re trying to nudge your team members to champion a new initiative when they are already working all hours.
What Is Influence?
I am talking about influencing not manipulating here. You are trying to pull people with you, not push them. You are trying to affect behaviour, to get others to agree with your opinions or get them to want to do what you want, willingly and ethically. To be an influencer, in my book, is about earning loyalty and commitment over the long-term, not asserting your power to get short-term compliance.
Entrepreneurs who become great influencers don’t play the game, they change the game.
Raising Capital Is One Of The Key Roles For A Founder
Running out of cash is one the main reasons an early-stage company fails. Raising capital is hard and so it is worth getting help; with putting the right process in place and also with developing the right behaviours. Influencing skills is one of the key behaviours you need to pull off a successful capital raise.
I have been there and done the fundraising bit from both sides – as an investor and an entrepreneur – having raised billions in equity and debt. What I describe below are 5 of the techniques my clients find particularly useful when it comes to influencing people to invest.
5 Ways To Influence People To Invest In You
Become A Storyteller
“Stories constitute the single most powerful weapon in a leader’s arsenal.”
– Dr. Howard Gardner, Professor, Harvard Graduate School of Education
If you can’t get an investor emotionally interested in what you are doing, they will not invest in your company. Founders who focus solely on the facts or data, on the mechanical details or functions of the product or service and ignore the story behind it and why it matters, do so at their peril. If you can ignite an emotional connection in the first few minutes, the investor is much more likely to spend the rest of the pitch looking for evidence to justify their initial excitement.
After studying hundreds of speeches, Nancy Duarte, the author of slide:ology: The Art of and Science of Presentation Design, found that the most effective presenters use the same technique as great storytellers.
She recommends your presentation has 3 different beats to it.
Firstly, you start by reminding people of the status quo, reminding the investor of life as they or the customers know it. The aim is to create a bond between you as this opens them up to hear your ideas. Then you introduce your vision of what it could be. You want to emphasise the gap between the status quo and the future vision. Surprise your audience, pull them out of their complacency.
Secondly, in the middle beat you want to keep playing up the contrast between what is and what could be. You are continually trying to make the status quo unappealing and draw them towards what could be in the future if your business succeeded. You will encounter resistance and that is why you need to move back and forth. If you face up to the dance of resistance between what is and what could be you can draw people to your idea quicker.
And you end your presentation with a call to action – “This is the way the world will look when we join together and we solve this big problem.”
2. Really Get to Know Your Audience Before You Meet Them
“If there is any secret of success it lies in the ability to get the other person’s point of view and see things from their angle as well as your own.”
Henry Ford, founder, Ford Motor Company
The story technique called Joseph Campbell’s hero’s journey takes the hero from the ordinary world to the new special world and then back to the ordinary world again. When my coachees stop putting themselves as the heroes in the story and start making the customer and other stakeholders the central figures they start to get much more traction from investors.
You are trying to look at things through the eyes of the people you are trying to influence. To fully consider other people’s perspectives, to figure out what might touch them, what’s on their mind so that you can meet them there – go into their world rather than ask them to leave their world to come into yours.
You want to figure out what motivates the investor – often it’s a combination of impact, power and money. Your research into investment firms and individual investors will help you determine what is likely to be their priorities and motivators. You want to find out what criteria they usually use to assess the opportunity, what they care about.
You want to help them look good to their colleagues by providing them with the information they need to sell your idea; be the resource that leads to the investor’s prosperity.
But as well as knowing your investors you want to develop and show a deep understanding of your customers.You want to have stories about how painful the problem is for your potential customers that you are trying to solve, and therefore how motivated they are to use your product. Ideally you have a personal connection to the problem, and it is something you have had to struggle with personally, demonstrating you are uniquely positioned to solve this problem.
3. Build Credibility
People follow people not organisations. Investors will be asking of you:
- Will you help me be successful?
- Are you someone worth taking a bet on?
Credibility is central to anyone following or backing you.
2500 years ago Aristotle discovered credibility is influenced by two things:
- Expertise or competence
- Virtue or character or relationships
How we display these two dimensions is how people judge our credibility. Expertise gets you promoted but character will bring you followship. You need both to get investors on board. They want to know what you stand for, how you act and the stories about you.
Before I invest in an entrepreneur I aim to find out what the gap is between when they are on show – front of stage – and how they act when no one is looking. I want to see their true self in pyjamas (not literally!) i.e. in the unguarded moments. And if the gap is too big – i.e. they don’t have sufficient credibility – I don’t invest.
4. Build Rapport Through Matching
You can match people in a number of different ways. If someone likes to speak slowly, match their speed of speech. You can match their breathing, their expressiveness or lack of it.
You can match someone’s communication style. If someone likes chatting, then chat to them. Most people are influenced by the emotions of a story, but some people prefer data and so you need to flex your communication to match theirs if you want to maximise your influence.
Matching leads to you getting in sync and a lower heart rate for both of you. It makes lots of different things easier. If you sense that I’m like you – that we match – then you are more likely to want to work with me.
5. Build A Sense Of Scarcity
In Robert Cialdini’s classic book on Influence, scarcity is one of the six principles of influence. People are more motivated by the fear of losing something than by the thought of gaining something of equal value. When you convince someone of its scarcity, you will increase its immediate value in their eyes.
FOMO is a real thing in investing and it influences how an investor thinks about an opportunity. That fear of missing out on the big winner puts you, the entrepreneur, in a strong position, creating more demand for your round than you have room for.
When you decide to raise the capital is crucial and the way you schedule your investor meetings are two ways of greatly affecting whether an investment in your company is seen as scarce – something investors will fight to be part of.
Create that element of competition and this will put you in a strong position to pick and choose the best investors.
Securing investment needs strong influencing techniques
Influencing can sound quite abstract to many but when you dig into it, like most things, it is something that is eminently learnable and boy is it useful if you want to be a successful entrepreneur. Use influence in the right (and ethical) way, and you’ll reap the rewards.
THE VIDEO SPARK
From the “I have a dream” speech to Steve Jobs’ iPhone launch, many great talks have a common structure that helps their message resonate with listeners. In this talk, presentation expert Nancy Duarte shares practical lessons on how, by reminding people of the status quo, and then revealing the path to a better way, they set up a conflict that needs to be resolved.
That tension helps persuade the audience to adopt a new mindset or behave differently – to move from what is to what could be. And by following Aristotle’s three-part story structure (beginning, middle, end), they create a message that’s easy to digest, remember, and retell.
THE QUESTION SPARK
What do you want?
THE QUOTATION SPARK
“There is only one way under high heaven to get anybody to do anything. Did you ever stop to think of that? Yes, just one way. And that is by making the other person want to do it.
Remember, there is no other way.”
– Dale Carnegie – How to Win Friends & Influence People
Keep well. Give > Take.