Are You Fundable #8
The question of how to establish trust was front and center in my post of two weeks ago. In my last post, we explored how to evoke trust once it is established to some level. In this post, I want to share a great method for deepening trust.
Recall that we began this series discussing what trust is between an investor and an entrepreneur. We found that the trust you need to establish with investors can be evoked by being open and honest about your gaps, warts, and weaknesses. In my last post, we used a brief dialogue to illustrate how to extend investor trust by inviting their direct assistance in addressing a weakness that you’ve honestly expressed to them.
Today, I want to show you a specific way to deepen trust and I’ll illustrate that method by going back to our dialogue between Mary, the investor, and John, the entrepreneur:
Keep a Promise or Honor a Request
Before we rejoin Mary and John, let’s talk about the relative value of promise-making. Take the case that within a relationship between two people a very modest promise can, if broken, cause a fairly high level of damage.
Take a moment and remember what it was like being a child and living with your parent(s). Your parent makes a promise, it could be anything from a very large promise like “I promise we’ll go to Disneyland this summer,” to a small promise, like “after dinner, I promise we’ll throw the football around.” Just get a picture from your own past experience of a situation like that. . .
I’m going to go with the “I promise after dinner we’ll throw the football around.” To the parent, this promise simply represents a bit of a sacrifice of time and energy and the chance to spend a little quality time with their child. It’s something they genuinely want to do, but if it doesn’t work out it’s no big deal.
To the child, the promise represents love, caring, desire to spend time together – it’s a validation of your self-worth that the parent will spend some fun one-to-one time together. If the parent breaks the promise, can’t even carve out a half-hour to throw the ball around, then can they be trusted next time?
Big difference in terms of what’s at stake!
Consider that once an investor gives you a significant amount of their time, energy, reputation and money, if you can’t make and keep promises, it could have devastating effects on them.
Keep that in mind and let’s return to our promise of a game of catch after dinner . . .
Dinner is over and it’s time to toss the old pigskin around. Junior (age 5) comes into the kitchen with his football and a big smile on his face. Playing catch with dad or mom is the highlight of his day. It makes him feel important. It’s a chance to feel loved and valued.
Dad or mom folds the dish towel, looks at junior and is about to say “ok let’s go toss the ball around for a while,” when . . .
The phone rings.
It’s a business call and dad or mom really needs to take the call. He whispers he/she will only be a while. Meanwhile, the late autumn sun begins to sink into the west as the call goes on and the minutes tick by. Junior waits for 10, 15, 20 minutes, pacing around the house, tossing the ball to himself.
When dad or mom is finally free, it’s dark outside. The football lies where junior left it in the hallway. He’s upstairs in his room, feeling sad and small.
You probably remember several moments like that as a child. What I want you to recollect, if you can, is how as a child the broken promise held a lot of significance – especially if that kind of thing happened routinely. It erodes trust and can affect self-esteem because someone or something was more important than the keeping of the promise.
Here’s why this matters in the context of building (or eroding) the trust of an investor in you.
If you can’t keep (or won’t make) a simple promise or two then, can he or she rely on you when the stakes are much higher?
Think about it.
I promise you one thing – your prospective investor is thinking about it.
That’s why he or she may ask you to make and keep a fairly small promise or two.
What they want to gauge is how important their request is to you.
What I want you to take away from this is that your ability to deliver on relatively small requests in a timely manner will indicate to an investor that you’re a trustworthy person or not.
So treat those little requests like gold. Honor them and it could pay huge dividends. Blow them off and you’ll be very unlikely to regain the trust that’s lost.
Recall that when we left Mary and John, John had asked Mary (the investor) to train his team to implement Mary’s system for determining the right pricing strategy for the Company’s product. John left us by asking Mary “when can we start?”
“I could come to the office . . ., she paused, pursing her lips and carefully checking her very busy daily planner . . . “Friday — a week from today, John, from one to three in the afternoon”
“Great, I’ll have our COO and our CMO on hand and anyone else you think would be important,” John responded.
“OK that should be fine to start. But do me a little favor. Get me whatever historical numbers you have on your sales over the past year or so. Can you break down the numbers quarterly and by geographic markets?”
John thought for a moment. “We can do it quarterly, what markets do you want to see?”
“Just pick any ten. What’s most important is that you get me the data by Thursday so that I can review it and do some preliminary work before meeting you on Friday. Otherwise, we won’t be able to accomplish as much.”
“No problem,” John assured Mary.
So . . . did John deliver on the request Mary made of him?
Whether he did or didn’t, what I want you to identify in the dialogue is how Mary characterized the request – what she based it on. Read back through the dialogue once more and see if you can find what’s most important, then read on . . .
What did you see? Could you find the place where Mary placed a fairly high value on John keeping his promise?
OK that was a trick question. There are actually two places.
The first requires that you understand body language and nuance – it was when Mary looked carefully at her crowded planner and carved out two hours to spend with John. Now, John couldn’t see whether her schedule was crowded or not, but he could read her body language and notice that it took her several moments to find a generous 2 hours for him. Hopefully, John caught that and realized this was a very busy person offering her valuable time.
The second requires only that you are listening. It’s when Mary emphasized exactly what was most important to her and why. If you read what Mary said, she communicated that if John did not get her the sales data a day before the meeting their time would be wasted. In other words, HER time would be wasted.
Now, let me give you one more tidbit. What do you do if the investor doesn’t ask you for anything, doesn’t generate a promise for you to keep?
Take the opportunity to deepen trust by suggesting something that you could do and deliver. They’ll nearly always accept and that will allow you to take the offensive so to speak in deepening trust by promising and delivering.
Tune in next week to learn whether John kept his promise or not and what, if any, ramifications there were.
Key Takeaways: Often an investor will make a request of you. Treat it as though it is a promise to keep in which the relative value of the promise being kept is far higher to the investor than the size of the request might lead you to think. Such a request is a chance to deepen trust because behind the request the investor is looking to see whether you can be trusted, before they can trust you enough to give you something big, like their time, energy, reputation, and money.
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