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Framing Effect
Read time 0.9 minutes
In a world where data and statistics are so widely available, have you ever wondered why we still can’t agree on basic facts?
A vast majority of it has to do with the Framing Effect.
What is Framing Effect?
We often draw different conclusions about the same facts depending on how they are presented to us.
Imagine this scenario. You go to two investors. To the first, you say:
“We’ve seen 25% growth year over year and expect to increase that growth next year. Although the market has been down this year, we are significantly outperforming our competitors.”
To the second you say:
“ We projected 50% growth year over year but are currently at 25%, the entire market is down, and we are still doing better than most, we expect to get back to 50% by next year”.
In both examples, you communicated:
You are growing at 25%
It’s a down year
You are outcompeting others
You will grow more next year
Despite this, the two just hit differently.
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How Can You Use This
Make sure that you are framing and presenting data in a way that makes you look good. Many founders speak off the cuff or try to come across as humble or honest by talking down their accomplishments, this makes you seem less investable than someone who presents their data in a positive light.
Do you consider how you are framing data when pitching? |
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