The surprising power of questions

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I’ve always been a fan of questions – I’ve devoted an entire category on this blog to questions. Probably because I always ask a lot of them myself. And I tend to question most everything around me, but especially authority. I was that annoying kid in every class raising his hand again with yet another question.

I’ve learned empirically that questions are one of the most powerful tools in an entrepreneur’s toolkit and have been my most used tool as a mentor.

I’d don’t have a lot to add to this fantastic article from The Harvard Business School Review entitled The Surprising Power of Questions by Alison Wood Brooks and
Leslie K. John. So I won’t be annotating his lengthy article as I usually do. But here’s a sample from the article:

 

Alison’s research, using human coding and machine learning, revealed four types of questions:

  1. introductory questions (“How are you?”),
  2. mirror questions (“I’m fine. How are you?”)
  3. full-switch questions (ones that change the topic entirely)
  4. follow-up questions (ones that solicit more information). 

And this quote from Albert Einstein: Question everything.

The one thing I will add is that there are two situations where I’m judging the questions rather than the answers. The first is in recruiting. I pay a lot of attention to the nature and depth of a candidate’s questions. The nature of their questions reveals how well they have prepped for the interview, what they know about my venture, and how curious they are. The second is in presentations. As posted elsewhere, the number and quality of the audience’s questions is how I judge how well my presentation went over.

I highly recommend you read the entire article and learn how to make questions an indispensable tool in your toolkit.

How to survive your next networking event

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I first encountered the word network in conjunction with TV. There I found the CBS Television Network, the NBC Television Network, and the ABC Television network. Later joined by other 3-letter networks, like Fox. I had a very dim idea what was really meant by the term network as applied to TV stations, but it didn’t really matter it had no effect on my hours of TV viewing. Then upon entering the personal computer industry the work network morphed. It no longer had to do with TV, but with the very arcane process of connecting multiple computers so that they could communicate amongst themselves. Bob Metcalfe‘s invention of Ethernet at Xerox Parc was so important that not only did he go on to found a networking company, 3Com, but an entire industry.

But as the entrepreneurial fervor has grown ever more frenetic over the past few years the word network has become a verb – meaning connecting with people you did not know in order to either find a job (career networking) or find an investor or key hire (entrepreneurial networking.)

Either way as an introvert who has never been comfortable with either flavor of networking I was captivated by The Wall Street Journal article Networking for Actual Human Beings by David Burkus.  The conclusion of the article is found in the sub-title to the article: The research is clear: People don’t mix at mixers, and don’t feel good about trying. But there are better ways to make meaningful connections. Interesting how newspaper are now providing what are called abstracts in academic publications.

While I thought I was alone in hating networking it appears that research has shown that most people hate networking – making connections with strangers – and dread the awkward small talk as much as I do, whether at a cocktail party or a networking event. Such events are as common now as music concerts, whether the event is aimed at climbers of the career ladder, job seekers or entrepreneurs attempting to make connections with investors, advisors or candidates to join their ventures.

David Burkus has evidence to back up his statement that not only do most people dislike networking but that it strikes many as insincere and manipulative, even slight unethical.

A 2014 study published in Administrative Science Quarterly found that just thinking about job-related networking made most people “feel dirty.” 

Another study he cites was done on students in an executive MBA program. It turned out the even though the executives said they wanted to attend such events to build new business ties it turned out that they spent, on average, around half their time in conversation with people they already knew. As the study’s authors put it, people just don’t mix at mixers.

Mr. Backus has some helpful tips to garner meaningful connections without having to attend these networking functions.

  • Spend more time reconnecting with friends than meeting new people. I’d expand this to include not just friends but acquaintances and former colleagues as well. Recently I heard from a former colleague I hadn’t talked with in decades. His outreach to me on LinkedIn resulted in his joining The MIT Venture Mentoring Service, both dropping the average age of MIT mentors a bit and adding his valuable expertise in corporate sales to the mentor pool.
  • Focus on activities. I’ve long known that the best way to make friends is to participate in some activity with them and by activity I mean something beyond eating out or seeing a movie. As a kid that activity was sports. Now ad adults we love museums and it’s great fun to go with our friends who are artists. Visitors at museums de facto have common interests, so small talk can be replaced by talking about the exhibit, the artist or even the museum itself. Museum events are a great way to meet new people and learn something at the same time.
  • Ask better questions. As readers of this blog know I’m a huge fan of questions. Mr. Backus advises going beyond the tried and stale questions like “what do you do?” to ones more likely to elicit an interesting answer, like “what excites you right now?” or “what’s the most important thing I should know about you?” Years ago I learned that while I absolutely hate talking about myself, most people are just the opposite. By asking them questions I off loaded the burden of smalltalk on to them and off my shoulders.

I think Mr. Backus has put his finger on why networking events tend to make me queasy: … feeling that it’s all instrumental, a way for us to use other people to get ahead. Instead he recommends that we … greet all those strangers as actual human beings.

The Journal article is adapted from Mr. Burkus’s new book, Friend of a Friend: Understanding The Hidden Networks That Can Transform Your Life and Career, published by Houghton Mifflin Harcourt .

 

Does networking for actual humans work?

 

networkingFor as long as I can remember I’ve characterized myself, and others have characterized me, as anti-social. I avoided going to parties or any other social gathering, including my senior prom. Why? Because being with groups of strangers makes me anxious. I have no skill at small talk and hate talking about myself.

It wasn’t until I read a story about football star running back Ricky Williams that I found a better label for myself than anti-social. Like Ricky and 15 million other Americans, I suffer from Social Anxiety Disorder.  \

So today I was quite surprised to read The Wall Street Journal article Networking for Actual Human Beings, The research is clear: People don’t mix at mixers, and don’t feel good about trying. But there are better ways to make meaningful connections by David Burkus.

A significant body of research demonstrates that networking—making and strengthening connections to others—is vitally important for professional success. But there’s a problem: Most of us hate doing it. We dread the awkward small talk with strangers at a noisy cocktail party, the pressure to deliver our “elevator pitch” and to “work the room.”

One such study cited in the article, a 2014 study published in the Administrative Science Quarterly, found that adults felt “morally tainted” just by thinking about job-related networking.  I’m not sure what that “morally tainted” means but it certainly isn’t my problem. However, a study at the Columbia Business School found that:

Even though almost all of the executives said that they wanted to attend such events to build new business ties, it turned out that they spent, on average, around half their time in conversation with people they already knew. As the study’s authors put it, people just don’t mix at mixers.

Yep, I’d probably try to spend 100% of my time with people I already knew!

The author provides three ways to cope with networking anxiety:

  1. Spend more time reconnecting with friends than meeting new people This is a terrific idea. In fact an old colleague looked me up recently and we both enjoyed getting together again. This made me think about other people I’d lost touch with over the years whom I felt I could reconnect with.
  2. Seek out shared activities instead of unstructured events. The Columbia study suggests that we don’t really make good use of freewheeling social events with strangers. A productive alternative is to focus on an activity. I found this to be very true, as I’ve attended workshops at MIT with lots of strangers, but working in small groups on solving a problem together eliminated my social anxiety.
  3. Ask better questions. This is also a great tip when you are at an event with total strangers, one I figured out for myself, as I depend on my ability to ask good questions when I mentor entrepreneurs. And most people, unlike me, do enjoy talking about themselves!

All of these helpful recommendations for dealing with networking are from Mr. Burkus’s new book, Friend of a Friend: Understanding The Hidden Networks That Can Transform Your Life and Career, published by Houghton Mifflin Harcourt.

Here’s some ways I’ve found to cope with my anxieties about networking.

  1. Go with a friend who’s an extrovert. You can shadow your friend and join into conversations he or she starts or joins. It also gives you both a topic for small talk, “How did you two get to know each other?’
  2. Join an existing conversation. I’ve learned from attending a lot of meetings that knots of people will emerge, often around a charismatic, talkative individual or two. It’s much easier to join an existing conversation than to start one yourself.
  3. Think about the reasons you are attending and be ready to talk about it. I find it’s a lot easier to talk about why I’m at a networking event than to talk about myself. For example, I’ve said that I are looking for good candidates for my stratetic advisory board. And if you force yourself to talk to enough people you might even accomplish your goal by networking!

 

Market research – what is it and why you need it

 

market research

In my MIT mentoring at both the Venture Mentoring Service and the Sandbox Fund I see mainly very early stage entrepreneurs, often pre-product, even pre-prototype – just at the idea stage.

But they all realize that they need to present some type of evidence that validates their idea; every founder has a pitch deck. But not every founder realizes the differences between primary and secondary market research and the key attributes of each.

When it comes to markets investors, partners, and job candidates usually have the following questions:

  1. How big is the market?
  2. How fast is it growing? (If it is growing at all).
  3. Who are the major competitors?
  4. What segment of the market will you target initially, e.g. who will be your early adopters?
  5. What differentiates your product or service from competitors? What’s your value proposition? What is your competitive advantage?
  6. What will be your barriers to entry? In other words if you are successful what’s to prevent two people in a garage from cloning your product?

Any presentation needs to answer these questions. And answers need to be backed up with evidence, either first hand or second hand, with the emphasis on the former. As Daniel Patrick Moynihan said, “Everyone is entitled to his own opinion, but not to his own facts.” And as someone once said of a meeting between investors and founders, “Inside this room what we have is opinions. Outside this rooms are the facts.” That’s where market research comes in.

Primary market research generally is synonymous with customer discovery, going out and talking to the people you think will be good prospects for your product or service and getting their feedback. It’s very tempting to start with friends and family, I’ve made this mistake myself, but by the nature of their relationship with you they are going to be biased – in your favor. So you really need to plunge into the deep end of the customer pool, talking with prospects who have no relationship with you, though they might have a connection. But the further away they are on your social graph the more likely you will get unbiased feedback. False positives can lead you down the wrong path, wasting time and money. Lately I’ve seen a few founders who got lists of prospects and actually cold called everyone on the list. While this seems inefficient, it was surprising the number of people who were willing to talk with them. So spend less time on that pitch deck and a lot more time on your 30 second pitch and figuring out why a stranger would want to talk with you – what’s in it for them? Lots of people are intrigued by startups and entrepreneurs, so if you have a good story, like your origin story of how you got the idea, lead with that. And having some good credentials can really help, like being an MIT or Harvard grad, or having worked at a name company like Amazon or Google. You have about 10 to 15 seconds to capture someone’s attention, then you need to be able to hold it for several minutes.

Interviewing is a skill, and like any skill it will improve with practice. Start out with three questions you would like to get answers to, such as: what are you (the prospect) using now to solve this problem? How satisfied are you with that solution? What features or benefits would cause you to switch to a new product that better solves your problem? And forget about pricing! The key is to identify a market niche you can dominate, not to refine the price for a product you haven’t even created yet.

One good strategy is to go an organization that many of your prospects belong to or are served by. For example, if you have a new product idea to help the blind, in Boston you could go to the Perkins School for the Blind or the Carroll Center for the Blind. If you can capture the attention and the imagination of an administrator at an institution that serves your prospects they might help you set up interviews with their clientele. Much more efficient that cold calling! But again, the key is what’s in it for them? For example, you could promise to deliver a written report on your market research with their clients and/or a presentation.

There really is no substitute for primary market research. But there is value in secondary market research: scientific papers, research studies, analyst reports, journal articles, etc. But make sure it meets the following criteria:

  1. It comes from an authoritative source. There are a lot of fly by night market researchers out there, as well as stock analysts who tend to be biased by their bank’s or private equity fund’s strategy.
  2. The market research is recent. Given the time it takes to perform research, write it up and get it published, any published research is by definition somewhat out of date.
  3. You have more than one source. Ideally having three or more reports or published articles that help to validate your business concept will be convincing.
  4. It’s highly relevant to your idea. It may be hard to find research that’s completely congruent with your idea, but the more relevant it is the more convincing it will be.

Keep in mind that in an early stage company your business idea and value-added are both working hypotheses. It’s ok if you find prospects or even researchers that don’t fully support it – in fact mentioning one of these may help to increase your credibility.

Make sure you give credit where credit it due. Not only will the owners of the research appreciate this it will also enable your audience to track down the original report or publication – which an interested investor would be prone to do.

Student interns can be very helpful in conducting secondary market research. Find an MBA student who needs a project to help out while you concentrate on primary market research – never delegate customer discovery!

Finally, as you talk with individuals or institutions keep in mind you are going to need advisors, mentors, partners and staff – you might well find these people during your customer discovery and market research phase of your business.

 

Quora – the best Q & A site for founders

questions

If you aren’t aware of Quora – you should be. In their words:

Quora is a place to gain and share knowledge. It’s a platform to ask questions and connect with people who contribute unique insights and quality answers. This empowers people to learn from each other and to better understand the world.

More pragmatically it’s a great place to pose questions and get answers to questions about founding and running startup companies. Quora was founded in Silicon Valley by successful entrepreneurs and they used their personal networks to jumpstart the company. As a result it has attracted many topflight VCs, founders, angels, professional service providers, mentors, and others involved in the entrepreneurial ecosystem.

Here’s a great example of how it was helpful to me. Last summer I was mentoring with the MIT Sandbox fund and one team had an issue with their founders’ agreement. So we went looking in all the usual books and sites about startups and didn’t find anything that was really helpful. That’s when I remembered Quora. I found a number of answers, including templates for agreements and lists of what should go into a founder’s agreement. (https://www.quora.com/unanswered/What-should-go-into-a-founders-agreement).

I was able to provide this information to mentees and since then Quora has been my go-to source when I don’t find an answer to a founder’s question.

So even if your mentor has an answer to your question it might be helpful to check out answers on Quora as well to get additional perspective on your issue.

I don’t know what their business model is, but I’m glad they seem to be successful and heavily used by knowledgeable people.

How I Built This podcast with Guy Raz

 

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I often recommend books and articles to founders, but here’s my first recommended podcast: How I Built This with Guy Raz, from National Public Radio.

Host Guy Raz dives into the stories behind some of the world’s best known companies. How I Built This weaves a narrative journey about innovators, entrepreneurs, idealists, and the movements they built.

The first How I Built This podcast I listened to was Instagram: Kevin Systrom & Mike Krieger. Both co-founders were extremely frank and insightful about how they built Instagram. The stories of how they differentiated Instagram from the many other photo apps that flooded the market is of particular interest.

First, by following the tenets of lean startup guru Eric Ries, they looked into the the usage and engagement patterns of the roughly 100 users they had for their initial app, Bourbon, which was one of many location-based check-in apps, including Foursquare. What they found was very valuable: users were most interested in the photo sharing feature of the app, far beyond it’s key location-based check-in feature.

Then an insightful comment from one of the founder’s wives, Systrom and Krieger lead the founders to realize that by building photo filters into Instagram casual photographers could create much better looking photos, leading them to be far more willing to share those photos on the Instagram network.

Perhaps the most important differentiator, which was strongly emphasized in the podcast, was that Instagram ran totally counter to all the other photo sharing apps out there that were closed networks – you had to request permission to follow anyone. The founders decision to keep Instagram open, so anyone could follow anyone, was seen as one of the best decisions they made – though at the time it was a strongly debated question.

There are a lot of other great insights into what it takes to build a successful startup, including a wonderful disquisition on the role luck plays in startups.

The one last item I’ll share with you before recommending you listen to the entire podcast – and explore other podcasts in the How I Built This series – is the issue of market timing. A key success factor for Instagram was that it was launched coincidentally with the moment that the built-in cameras in smartphones basically matched point and shoot digital cameras in quality. All of a sudden millions of people had a point and shoot camera in their pocket or pocketbook. And as the saying goes, The best camera is the one that you have with you. But what they didn’t have was a great place to quickly and easily store and share those photos. Instagram solved that problem for them.

Finally I should also praise host Guy Raz for his excellent questions and management of the discussion with the two founders. I’ll certainly be listening to more of the series and I hope readers of this blog will do likewise.

CEO seeks out mentors for himself!

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Richelieu Dennis, the chief executive of Sundial Brands. CreditBenjamin Norman for The New York Times

One of my favorite features of The Sunday New York Times is Corner Office by Adam Bryant. This week he interviewed Richelieu Dennis, founder and CEO of Sundial Brands.

I highly recommend you read the full interview, but what caught my eye was as usual the word mentor. As Adam Bryant usually does in his interviews he asks the open ended question, which is always a good idea after asking several very specific questions, “Other insights along the way?” Dennis Richelieu replies:

I learned how to reach out to people, so seek out mentors, to understand how to do things. So here is a CEO seeking out mentors! But he goes on to say:

At first I didn’t realize I could do it. But even competitors were receptive and willing to talk to me. This is an important lesson to startup founders – anyone will talk with you, even competitors! Founders, even established CEOs, need to learn and continue to learn.

And finally Richeliu, as so many successful founders do, wants to give back: I try to do that now myself. If there is something that I’ve learned along the way that I can pass along, I’m always happy to help people. 

And that’s one reason I become a mentor, as so many people helped me out as an entrepreneur. I learned how basically good people are as a 17 year old hitchhiking 10,000 miles through Europe and the Middle East on my own. People not just giving me rides or buying me a meal, but taking me into their homes for the night. People who didn’t speak a word of English being kind to a young traveller.

Of course, Ican never pay them back or the many advisors, mentors, and acquaintances who helped me out along the way. So now it’s my turn to help out others, and to learn from them and hopefully imbue in them the desire to help others, even competitors.

Reaching out to people as Richelieu Dennis did, and probably continues to do, is not easy if you are an introvert like me, but it does pay off.  And I encourage every founder to reach out, either formally through a mentorship program or informally.

The second to last question Adam Bryant always asks is How do you hire?

The answer is totally in sync with my experience and style: I can get a pretty good sense of what matters to them by the questions they ask me, rather than the questions I ask them.

As the saying goes, The only stupid question is the unasked question. Don’t be afraid to look foolish. As my saying goes, If you don’t ask, you probably won’t get.

 

Podcast with entrepreneur & mentoring expert – what you need to know before getting a mentor

 

zacharyThe article Before You Get a Mentor, Here’s One Thing You Need to Know by Jordan Simas includes a link to a podcast with Lois Zachary, who has written four books on mentoring, including, The Mentor’s Guide and The Mentee’s Guide. She is also affiliated with The Center for Mentoring Excellence. 

If you aren’t up for listening to the roughly 8 minute podcast you can read a partial transcript.

Lois Zachary defines mentorship as follows:

We’ve come a long way from the mentor as the sage on the stage. Rather, the mentor is the guide on the side that asks questions that take people to deeper places of insight. It’s a dance, it’s a partnership and a mentor should not be giving the answers, should be raising the questions and should be helping the mentees to seek answers to their own questions

Here’s her one thing to know when a founder enters a mentorship relationship:

It’s really essential to be open. If you’re not willing to be vulnerable, and not willing to be authentic and real, then your mentor actually ends up mentoring else, and it becomes waste of time for you and a waste of time for them.

While many entrepreneurs I know are science fiction fans, Lois Zachary is not a fan of Yoda’s mentoring style:  …there is no why. Nothing more will I teach you today. Clear your mind of questions. Nor am I!

The essence of mentoring is asking questions! What makes a great mentor is the ability to ask questions that stimulate the mentee to rethink or question their assumptions. There are not necessarily right or wrong answers. Every founder’s situation is different, but there are best practices for entrepreneurs as laid out in detail in Steve Blank’s book The Startup Owner’s Manual: The Step-By-Step Guide for Building a Great Company, which I’m working my way through and will post about in the near future.

Likewise the only stupid question a mentee has is the unasked question. In fact the best way for a founder to have a successful mentoring session is to come prepared with a list of questions for their mentor. The art of asking great questions will pay off for founders as they learn to interview customers, partners, job candidates and many others.

So be open to being asked questions by your mentor, but do your share in the relationship by asking questions of your own about your venture or your path as an entrepreneur.

 

10 ways to prep for an investor Q & A session

 

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One of my concerns about the current entrepreneurial climate is the tremendous emphasis put on entering pitch contests, and with that, all the time and effort founders put into polishing their pitches to an eye blinding shine.

Not only is this a tremendous time sink for founders, more importantly, because pitch contests seldom allow time for Q & A – just one 3 minute pitch after another – founders don’t get the coaching and preparation for dealing with investor questions they need.

Yet during the multi-step process of securing an investment, entrepreneurs will spend more time answering questions from investors than they will doing their presentations. Whether it’s the partners meeting at a venture capital firm or a presentation to an angel group founders or just coffee with a VC associate, founders will find themselves on the firing line dealing with a barrage of questions from very smart, knowledge people who have a lot of experience interrogating entrepreneurs.

Here are ten steps you can take to prepare yourself to handle investor Q & A sessions:

  1. Know your audience –  that’s the first rule of marketing communications.  If you are fortunate enough to get to the partners meeting at a VC firm – the penultimate step to getting an offer sheet – or if you are just meeting an angel investor for the first time, study up on their background. Look for common points of interest. If you both happen to be sailor or skiers, that can really help break the ice during the often awkward time before the formal Q & A session starts.
  2. Understand the goal of the meeting – if the objective is a “meet and greet” you won’t want to go into a deep dive on your product. On the other hand if you find yourself before the due diligence committee of an angel group be prepared to handle the toughest technical questions. Often VCs or angel groups will bring in outside technical experts to question you – I know, I went through that process myself. Keep the depth and breath of your answers in accordance with the meeting objective.
  3. Don’t answer questions like a politician! –  Almost nothing irritates investors more than founders answering with weasel words or with an answer they can give, but one that doesn’t address the question.
  4. If you don’t know the answer, say so –  Fakers are soon found out. If you can’t answer a question, say so and if it’s appropriate say you’ll find the answer and get back via email or a phone call.  Sometimes you can give a partial answer, such as if asked for a hard number like your sales projections three years out, you can answer with a range rather than a fixed number.
  5. Put together a set of likely questions and answers –  If need be enlist some friends to help your team come up with objections to your pitch or really tough follow on questions. If you can anticipate the questions you can prepare a well thought out answers. A top ten question list should be sufficient. As you talk with more investors you can refine this list.
  6. But don’t give canned answers – Despite the tennis match back and forth of a Q & A session try to be relaxed and conversational. Giving a canned answer that was obviously memorized signals you don’t really understand what you are saying. Investors don’t invest in parrots.
  7. Anticipate questions with your pitch – The best way to answer a question is to provide the answer before the question can even be asked. Test your pitch against your top 10 questions and see if you can smoothly incorporate the answers into the deck – but don’t force the issue.
  8. If you’re unclear on the question, ask for clarification – Not every investor is a great communicator and not every question will be clear to you. Don’t be afraid to try to rephrase the question, such as “What I hear you asking is will we be willing to compete on price to get any deal or are we willing to walk away if we can’t get our price? Is that right?” Asking for clarification is the only time it’s ok to answer a question with a question!
  9. Rehearse, rehearse and rehearse – founders spend hours rehearsing their pitches, or at least they should. Spend some time with friends running a mock Q & A session and get their feedback on how you are coming across.
  10. Don’t be defensive – Investors can be very blunt. They can even come off as harsh in their questioning. Whatever you do, don’t get defensive, even if you feel you are being attacked. Be gracious. In fact some investors like to ask very rough questions in an abrasive manner just to see how the founder handles themself – they don’t really care about the answer.

Must reading on the “exit strategy question”

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CREDIT: Getty Images

Patrick Henry has very wise counsel for entrepreneurs facing the frequent question from investors – most often from angels – “What’s your exit strategy?” I’ve posted about this before Why I don’t like hearing about exit strategies, but I think Mr. Henry has more to say about the topic in his Inc article that is must reading for founders: Why Investors Are Asking About Your Exit Strategy (And What You Should Say) Investors want to know about your commitment, flexibility, and thoughtfulness.

He lists the three major reasons investor ask this question: