I Found a Bear In Its Den...Well Actually, My Kids Did
If You're Pitching a Bear Story, You Better Deliver a Bear
We were looking for a Christmas tree in the woodlot above our house when my kids ran back up to the trail with eyes as big as saucers. There was a bear only fifty feet away underneath that stump!
A few minutes earlier, my nine-year-old daughter Eden had crawled down to see if she could fit inside a little cave. Such an inviting little cave. Just big enough for a little girl or a little…
But little sisters exaggerate. Plus, she wouldn’t know a bear from a beaver. So Eden’s bold and experienced older brother swaggered over to the stump with studied nonchalance, ignoring his sister’s protests, and got close enough to confirm that he was both brave and could move very quickly when motivated.
But little kids exaggerate, and it’s dark in caves. Plus, if I could hold it together, this was an opportunity to score a few dad points. So I crawled down through the brush to the base of the stump to assure everyone that it wasn’t actually a bear. I took out my little flashlight, crouched down, peered in, and my light glinted on two beady eyes spaced way too far apart, staring back at me from a few feet away.
And sure enough, it was a bear. Not a very big bear, not a terribly alert or aggressive bear, but a bear is a bear, and this bear was four feet away, thinking to himself that he must have hibernated in the wrong neighborhood.
Grin and Bear it
You’ve heard people exaggerate. Maybe not by much, but you know it when you hear it. You’ve heard stories about bears in the backyard that turned out to be badgers, labrador retrievers, black stumps, coats hung on rake handles, or that huge fluffy cat your neighbor overfeeds. If you’ve heard as many startup pitches as I have, then you’ve heard hundreds of these stories.
I want you to notice two things about your response to these little overstatements:
You didn’t always call bullshit on the person pitching. Often, you just nodded your head and let him think you believed every detail.
You began to calibrate every other story he pitched based on how real and how big the bear turned out to be.
This means the entrepreneur might think you’re swallowing everything he’s throwing in the water when in fact, you lost his trust and attention twenty minutes ago.
Or maybe you’re the one pitching the badger as a bear. Maybe you’re prone to just a little-bitty, teeny-tiiinnny, overstatement every now and then in order to get your audiences’ attention.
Sometimes it works. But it’s usually a bad idea. Here’s why.
Going Fishing
Most of us have been guilty of fishing for a compliment at one point or another: When you’re feeling down, and you ratchet up the self-criticism so that your friend, co-worker or spouse will counter your criticism with a compliment.
Maybe you don’t fish for compliments, but I bet you know other people who do.
The most innocent example might be when your three-year-old collapses into a heap of crayons, proclaiming, “My drawing is terrible!”
To which you dutifully reply, “No it isn’t! That’s such a good…ah…that’s a horse, isn’t it?”
It works in reverse too. If your kid can’t stop telling you he’s the next Rembrandt based on his vaguely animalistic smudges, you’re likely to take him down a notch: “Well, you’re getting to be a good drawer, but there’s still lots to learn…like how to put the horsey’s eye not quite so close to his ear and which way the joints bend.”
What you and Junior are tuning into is the natural human reaction to understatement and overstatement. If someone understates or overstates a fact, then you feel a compulsion to correct him up until the point where you think he’s just trying to get sympathy (over-understatment) or just blowing hot air (over-overstatement, otherwise known as “blatantly lying”). In-between, if the misstatement is small, then your brain’s internal regulator corrects the error whether or not you voice the correction.
For instance, examine your mind’s impulses to correct these made-up statements from famous people:
Sam Bankman-Fried: “I know I made a LOT of mistakes at FTX.”
Your brain’s Internal Regulator: “Ya think?! Maybe your law professor parents should explain the difference between ‘mistakes’ and ‘felonies’.”
Jonathan Ive: “I’ve been able to make a difference in the design world.”
Internal Regulator: “Heck yeah, you have! You rocked the pool, man!”
Martin Scorsese: “Some of the films I’ve directed are not appropriate for children.”
Internal Regulator: “Like all of them.”
Donald Trump: “I like to speak my mind. I really do. I say what I think.”
Internal Regulator: “[violent agreement followed by approval or condemnation]”
Not only is the internal regulator always working to correct over and understatements, but it’s also forming a predictive model which it attaches to the source of these statements which enable it to anticipate whether the person speaking will likely need correction in the future and in what direction.
Which brings me to another bear story.
My youngest son Caleb has always had a vivid imagination, and sometimes sees huge, hairy creatures (bear, moose, elk, sasquatch) lumbering through the woods, up on the hillsides, or across the pasture, even when the rest of us only saw a haybale, a big black stump, or a shadow.
Then there was the incident several years ago when I was crouched with Caleb under a spruce tree in the Canadian Rockies hunting deer. I wasn’t concerned at first when he whispered urgently: “Dad! There’s a big bear, and it’s headed toward us!!”
“Oh, really, that’s nice, son…”
Probably another stump.
And then I looked up and saw the big grizzly bear headed straight toward us.
My predictive model for Caleb underwent an instantaneous and violent recalibration that day.
Undersell it…a Little
If you’re entrepreneur pitching your next deal, you actually have more control over the investor’s internal regulator than you think. All you have to do is understate the the bear story by a little bit. A story that starts as a labrador retriever and ends as a bear is much more satisfying than one that goes in the other direction, and it builds your credibility. If you tell a story that delivers a little more than you promised, then you build an expectation for interesting and satisfying stories.
So how would this work if you weren’t pitching bears?
Let’s pretend you’re pitching how many customers you have.
The usual approach would be to oversell the number by a little or a lot:
“We have hundreds of thousands of paying customers.”
But as you go along (whether in the pitch or during due diligence), you have to disclose that actually, you have 89,000 customers (close to one hundred thousand), and half of those are on free trials which haven’t expired yet (so they might pay or they might not).
The bear starts to look like a terrier.
On the other hand, if you pitch…
“We have tens of thousands of paying customers.”
Then as all the same details emerge, the story starts to sound more and more credible and compelling: “Wow! so you’re gonna have nearly a 100k paying customers if all those trials convert.”
You promised a little black bear underneath a stump and delivered a big grizzly headed right toward you. The investor’s end state is very near where it might have been had you pitched “100s of thousands” except now the investor believes the number and trusts your next stories.
When you’re pitching investors, the most important thing you have to do is create excitement and interest. Without that, you’re dead in the water. But assuming you’ve got their interest, the second most important thing is trust. Without trust, excitement shrinks, fades, and eventually dies. And there are few better ways of building trust than delivering a bigger bear than you promised.