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Bad Advice: Dance Around The Question
Read time 1.1 minutes.
I recently saw a video from a top pitching coach and venture capital partner advising founders to “dance around the question” if they don’t have a direct answer.
The specific example given was a founder being asked for their monetization strategy. He recommended talking about how many users you have, how you will make decisions based on their feedback and when the time comes, you will flip a switch to monetize.
As I listened to this video, I thought to myself, if a founder were pitching me and gave this answer, I’d immediately turn them down. So I asked a few VC friends, and 14/14 agreed that the answer would get them immediately rejected.
So what should you do instead?
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Never dance around a question.
If someone asks you your monetization strategy and you don’t have an answer, it would be much better to say, “At the moment, we are focused on growing our userbase, so while we haven’t been focused on monetization, we see potential to monetize through ads, subscriptions or upgrades.”.
Why is this answer better?
It shows that you can monetize. The main reason most VCs I reached out to said they wouldn’t invest if you followed the original advice is that when they asked that question, they want to know if monetization is possible; the original answer doesn’t reassure them you know how you will ever be able to make money. The second answer doesn’t commit to a way of monetizing but shows the potential for making money exists.
It shows courage and determination. Investors invest in people. The first answer makes you seem dishonest, shady and untrustworthy, which are not great traits in a founder. My advice shows you have courage (to admit you don’t have a solid plan) and determination (to stay committed to your strategy of user growth over monetization).
When you answer a question, always think about:
Why are they asking this? What is their concern?
How does this answer impact their view of my business?
How does this answer impact their opinion of me?
It makes no sense to destroy their view of you and fail to satisfy their concern in a weak attempt to protect or hide an aspect of your business that isn’t perfect.
Do you ever dance around investor questions? |
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