What happens when Daniel Pink’s research on motivation and sales is applied to the startup process? A packed house for April's Startup Grind in Washington, DC, where Pink joined as our guest. Chapter Director Brian Park surprised Dan and many in attendance when he asked the New York Times Best-Selling Author to overlay the concepts he discussed in his books with practical, real-life scenarios that most startups encounter. Dan’s latest book, To Sell is Human: The Surprising Truth About Moving Others, uses social science, survey research, and rich stories to offer a fresh look at the art and science of sales.
Watch the full interview with Daniel Pink, the NYT Bestselling Author of Drive, here, and catch our highlights below.
Do You Have What It Takes?
The first question any budding entrepreneur must face is, “Do I have what it takes to succeed?” While many people dream of starting a business or writing a book, few have the constitution and commitment necessary to succeed.
"The actual doing of it is torture,” Dan says. “And most people don’t like to endure that kind of torture. Are you willing to go two years, three years, four years, and beyond, not making a lot of money? Are you willing to end in failure? Are you willing to be as deeply disappointed as you ever have been in your entire life if it doesn’t go right?”
Facing these tough questions is only part of the answer because the type of people who seem to excel at startups are those who have the entrepreneurial spirit. “Has this person been doing startup-like things throughout her life as kind of an expression of who she really was? Was this the kid with the lemonade stand? Was this the kid who was doing something unconventional in school? Was this kid a little bit of a non-conformist?”
Dan has been writing most of his life. From his start, covering the girls’ softball team for his junior high newspaper, to writing op-eds when he was in law school, writing had been something he did “on the side.” Throughout his career in politics and government, he continued to write magazine and newspaper articles, in many cases, ethics laws didn’t allow for him to be paid for that type of work. And yet, he continued writing, mostly for free.
“You have all these people out there giving horrible career advice saying, ‘What’s your passion?’ It’s a terrible question. Because somebody says to me, ‘What’s your passion?’ I don’t know about you, but I freeze. Because you have to give a really good answer to that, right? And I think it’s the wrong question. I think the real question is, ‘What do you do?’ What do you do as a matter of who you are?”
It took Dan nearly a decade to realize that what he does is write.
How Do You Demonstrate You Have a Viable Idea?
Twenty years ago, a business plan with everything mapped out was almost a necessity. But what many founders realized was that the business plan didn’t really hold up for very long because it was based on a lot of assumptions.
“I think there’s been an iteration of a twenty-year cycle that the business plan doesn’t hold up. The business plan lasts for about five minutes when you deal with the ground truth about how people behave, what people like, your users your customers, your consumers, are going to tell you a lot about what’s wrong with your offering, and what’s not.”
Today, the lean startup methodology — a practice for developing businesses based on validated learning, getting customer feedback quickly, and often — makes sense for most startups. “I think the whole lean startup methodology is really, really powerful,” says Dan. “I think it’s the right way to go. You do an early iteration of something, test it out on a small group, refine it based on that, test it out again, and I think those kinds of small, endless iterations are really the way to go.”
Marketing through Social Proof
For many startups, marketing begins soon in the lifecycle of the business and is two-fold. While there is a need to develop a marketing plan for potential customers, it’s nearly as important for many businesses to have a way to reach potential investors.
The use of “social proof” can be useful in both marketing scenarios. “I think this is a really important concept in understanding your own behavior,” says Dan. “Understanding how your customers, your users are going to behave, which is that when we behave, we look around for cues about how to behave. And so social proof is a very important driver in people’s behavior.”
Pitching to Venture Capitalists
Getting in front of potential investors can be difficult for many founders, but Dan says that the research suggests that using the proper subject line in a cold email can make a difference.
“What they found are two core principles of email opening and they come down to this: utility and curiosity. Does the subject line immediately say how this is going to be useful to me? And what it shows that under heavy loads, utility beats curiosity. So go for something in the subject line that indicates it’s going to be useful to that recipient.”
Once an appointment has been scheduled, Dan says there’s a huge amount of research on “self-talk,” or getting yourself into the proper mindset before a meeting. While getting into a positive mindset is good, interrogative self-talk has been found to be more effective.
“Instead of saying, ‘you can do this, you got this,’ asking yourself a question, ‘Can you do this, and if so, how’? It turns out that interrogative self-talk is often more valuable. Interrogative self-talk, by its very nature, triggers an active response. If ask a question to or if I ask a question to myself, even if you don’t respond directly, your wheels turn a little bit more than if I make a statement.”
Selling
The sales landscape has been remade by technology and the easy access to information. The world in which the seller always knew more than the buyer has disappeared and we now live in a world of information parity. So, how do you effectively sell in a world where the most sales training literature is based on the old model? From a wide array of research from different behavioral sciences, Dan says you can piece together three core qualities necessary to be effective.
Attunement: This is perspective taking. “Can you get out of your own head and see things from someone else’s point of view.”
Buoyancy: He got this from a door-to-salesman who said that “The hard part about selling is that you face an ocean of rejection. Buoyancy is how you stay afloat in that ocean of rejection.”
Clarity: This has two dimensions. “We live in a world awash in information, so having access to information doesn’t give you any edge. What you have to do is curate information, make sense of information, separate out the signal from the noise.”
What’s Next for Daniel Pink?
Dan says he’s studying “timing,” which many people believe is an art, but think thinks it’s more of a science. He says there’s some really good research on the timing of many decisions we encounter like when to quit a job, when to get married, when to fire someone, when to change careers, and when to start a diet.
“For instance,” he says. “Bill Gross, the Idea Lab guy, he did an interesting study of his portfolio companies over the past twenty-five years. Some big successes, some big bombs. He looked at team, he looked at financing, and he looked at the market and he found the single best predictor, was timing.”
One of the most accepted and seemingly intuitive concepts is the first-mover advantage — that early entry into a new industry or product category gives a business an almost insuperable head start. But Dan says that often is not the case.
“You want to be, what I like to call it, you want to be the second mouse. The early bird gets the worm, but the second mouse gets the cheese. So, timing in startups is really important.”