Business outcomes are binary, there is no place for 'grade'
We’ve got this terrific idea and plan to present it to potential investors in an effort to get them to back our venture. So we put together a presentation that we believe will persuade the investor to write a cheque. But we make some mistakes when we do this for the first time.
- We prepare a snappy presentation filled with attractive graphics and data. This looks so good that it would fetch an A+ at a classroom exercise
- We then practice our delivery of this presentation, till we have got it perfect. Team members seamlessly enter and leave the narrative, like a well-oiled machine
- The big day arrives, and we put up a good show. The competitors too are good, we are forced to admit. But we stand a good chance
- When the result is announced, we are perplexed because the team that won did not seem to be a front-runner
We then learn the first lesson of life, that what happened at school and university is very different from what happens in life. Our education system tests for and rewards certain attributes that, while useful, are in themselves not sufficient to ensure success in the real world. Quick and snappy answers that are ‘smart' are not what are required in the real world. You are expected to know how to ask the right questions, where to look for answers, and find the answer that best suits the context of the problem. Another lesson we learn the hard way is that what matters is what the investor or customer or client thinks, and not what you and your team thought about your pitch. If we spend more time on finding out what they are looking for, we are likely to succeed in presenting something that will interest them. A third lesson we learn, again a hard one, is that in life, there are no grades. There is only success or failure. In business there are only binary outcomes. You either got the order or you did not. Your loan was either sanctioned or it was not. In business, and in real life, it is all about jumping across the ditch: you either make it across, or you land in the ditch. That is another outcome of our educational system. We are constantly measured and judged against our peers, and so we think that these relative assessments are meaningful in terms of life outcomes. It is often those factors that do not get measured at school that determine life outcomes. These include determination, commitment, integrity, persistence and unremitting hard work and practice. But the good thing about this binary character of life outcomes is that you will learn from failures and mistakes. Of course, you should try and avoid mistakes. But, fear of making a mistake should not prevent you from trying something. How can you innovate, or be creative, if you are afraid your trial may fail? Learn from your mistake, and move on to the next trial. Your idea may be brilliant, but you may still fail to get the investor to back you. That is probably because, while your idea is technically brilliant, your business plan is not convincing. This is something many people often forget. An idea becomes a business only if you get a sufficient number of people to buy your product or service at a price that makes you enough money to reinvest in your business after paying all your expenses. The same idea, in the hands of two different entrepreneurs will look different, purely on the basis of the business plan each has drawn up. A business plan is a strategy to build a business using the product or service, and is based on several assumptions about the customer, the market, growth, all based on a certain view of the immediate future. It is this vision, and the credibility with which it is projected and supported by the promoters, that convinces an investor to back the project. What you have to ask yourself is this: will my presentation convince the guy to write out a cheque? The answer to that question is quite different from the answer to the question, will this presentation blow this audience away?