Several years ago, I started watching episodes of the television show “Shark Tank” and I got hooked! The business reality series shows entrepreneurs making business presentations to a panel of five venture capitalists (called Sharks), who decide whether to invest in their companies. I found that there are some serious business lessons that can be learned by viewing the show and I saw one episode that really struck me.
There was an entrepreneur on that episode, Raven Thomas, who had started a food business called, The Painted Pretzel, which specialized in pretzels covered with chocolate and other confectionaries. Raven had a pretty good business and, according to the panelists, a product that was delicious. After a fair amount of discussion, one of the Sharks, Lori Greiner, got to the end of the conversation and asked, “Why should we invest in you?”
I realized at that moment that this was the big question, and I knew Raven’s answer could make or break the deal. Raven replied to Lori with… “The main reason is that I have two little kids and blah, blah, blah. . . (she went on about being a mom).” I immediately paused the show, looked at my (now late) wife Beth, and practically screamed “She just blew it! She totally gave a relational answer to a bunch of transactional SHARKS! They don’t care about blah, blah, blah; they want something closer to ‘show me the money’ than ‘I love what I do!’”
Know Your Audience
Beth replied, “You have to know your audience when you are talking about your business.” Her statement was spot on. Before I started to play the episode again, we talked about how crucial it was for Raven to speak the language that the Sharks speak if she wanted them to invest in her. She needed to speak a language focused on opportunity, growth, return on investment, and cold hard cash. Instead, Raven talked about how she felt about her business and how it related to her children. Her answer failed to include anything at all that the Sharks would relate to as serious, analytical business investors looking for reasons to convince them that Raven’s business would be a wise financial investment.
I realize that some people may be thinking, “That’s not right. That’s not fair. That’s not this or that…” Well, I’m not talking about what is fair. What I’m saying is it was totally predictable. The moment she started to give that answer, I knew she most likely lost all chances of getting funded because she was giving a relational answer to transactional professionals.
I resumed watching the episode, sure that I would witness the train wreck which was about to ensue. To my astonishment, one of the Sharks, Robert Herjavec, gave Raven a “do-over” (I really like this Shark – if I am ever a panelist on a business show, I’d like to think my style would be similar to his). Robert looked at Raven and gave her a chance to give a better answer when he said to her, “Let’s do that again.”
She took a moment and said, “A good reason to invest in me is that I had to walk away from a $2 million deal because I did not have the capital to fill the order. . . and that door is still open.” This answer was a showstopper—it completely captured the Sharks’ attention. Within a few moments, Mark Cuban (one of the Sharks who also owned the Dallas Mavericks professional basketball team) offered Raven the $100,000 cash investment she was asking for. He also offered distribution of her products at his sports stadium and at each location of the movie theater chain he owns! Of course, she said yes to his offer. As a result, she expected her company’s sales to exceed $1.2 million dollars the next year!
The lesson to be learned is that it is absolutely imperative to know your audience and tailor your comments to suit the people you’re talking to. This is an extremely important lesson in both the business arena and the networking arena.
I’m not saying to tell them what they want to hear.
I am saying tell them in a way that they will best be able to hear it; a way that’s most relevant to them, addressing the talking points that they are most interested in.
This is one of the main reasons why I recommend that when you first meet people, you begin by asking them questions about themselves prior to speaking in length about yourself. The more you know about the people you’re talking to, the better able you will be to craft your own message in a way that effectively resonates with them.
I’d love to hear your story about people “knowing” or “not knowing” their audience in the comment forum below. Thanks!