Psychologist and Harvard professor Amy Cuddy, author of New York Times Best-Selling book Presence, has discovered there are three things that predict how likely an entrepreneur is to successfully raise funds.
Cuddy book focuses on proven techniques for getting through life’s most challenging moments. Through years of research, interviews venture capitalist and examing what makes entrepreneurs most successful in funding pitches, she learned there are a handful of essential ingredients for success – and they’re all within our control. The biggest surprise? Talking ourselves down a ledge, telling ourselves everything’s okay is not as effective as walking ourselves down a ledge, showing ourselves everything’s okay through our body language.
I interviewed Cuddy about her work as it relates to entrepreneurs, though the themes are universal.
Amy Guttman: How quickly do people judge you and what are their judgments based on?
Amy Cuddy: People judge you really quickly, at first just on your facial features. There are two dimensions – warmth and competence. You can think of them as trustworthiness and strength. They’re first judging you on warmth; evaluating whether or not you are trustworthy. That’s much more important to them than whether or not you’re competent. That rating is happening extremely quickly. When we ask people to rate faces on a computer, they do it in less than a second. That doesn’t mean you’re stuck with that initial judgment; that’s just the starting point. There’s not much you can do to influence those biases. What you can do is be aware that being open with people and listening really shore up their impression of you as trustworthy. You can definitely move the needle based on your interactions with people. Do you speak first and take the floor, or do you allow them to speak so they know you are willing to listen and understand them? It’s less about coming across as trustworthy than actually being trustworthy. You become a trustworthy potential collaborator rather than a competitor. You want to be creating value, even in a negotiation. Think of it more as collaboration rather than a competition.
Guttman: Through your research, what’s the one thing you’ve found matters most during a pitch, or any real-life high stakes situation?
Cuddy: Entrepreneurs are more likely to be successful if they’re able to be present while pitching their ideas. It’s about maintaining presence during big challenges- very high stakes moments with some component of social judgment. Everyone has them, whether they’re entrepreneurs or not. When we go into those moments, if you approach it as dreadful, you go into a fight or flight mode which shuts you down and makes it impossible for you to be present and allow you to engage with what’s really happening. It makes it impossible for you to be authentic. Authenticity doesn’t just mean you don’t filter what you’re saying, it’s about being able to know and access the best parts of yourself and bring them forward. For entrepreneurs it’s about being really able to communicate what makes them passionate – their deep belief.
Guttman: You interviewed several venture capitalists to find out what they’re looking for. What did they tell you?
Cuddy: I heard again and again from VCs, ‘If a person doesn’t believe their own story, there’s no way I’m going to believe their story.’ You have to buy what you’re selling. If you don’t buy what you’re selling, nobody will. Often when we’re in these stressful situations we did believe our story until we got through the door and then we got flooded with self-doubt, so it’s about maintaining your composure and not letting yourself get flooded with self doubt. The fight or flight mechanism tells you what matters is not to be creative and clear, but to save your life. Your executive function is undermined, you’re not focusing on what you’re saying – your mind is everywhere but in the present – you’re thinking about what they just said, what you just said, what you think they want to hear. Even if you try to choreograph authenticity and rehearse – if you’re saying it in a state of panic, it just doesn’t come across as authentic, because you’re managing verbal and non-verbal cues. Something feels off. People react to that even in subtle ways. In fact, the best way to know someone is lying is to look for asynchronies. Does their story match their body language?
Guttman: What were the strongest predictors you found of whether entrepreneurs were successful in their pitches to raise funds?
Cuddy: Confidence, comfort level and passionate enthusiasm. Those were the best predictors in a study by Lakshmi Balachandra. She looked at about 180 VC pitches. But, it goes beyond that. It’s not superficial. There’s plenty of other research showing that grounded enthusiasm is a really good predictor of who sticks with it, who inspires their co-workers, who works hardest. When you care about something so much that you can be passionate about it, it’s something to pay attention to. It’s very hard to fake.
Guttman: What about the inevitable curve ball that comes in a pitch or presentation?
Cuddy: VC’s said they didn’t mind nervousness. People were bound to be nervous, but it’s the passion they’re looking for – the ability to defend an idea.
When you’re thrown a curve ball question, most people tend to roll their shoulders forward and slouch, without even realizing. They wrap themselves up. They might stand with their arms by their sides, but when asked a difficult question, they wrap one arm around the opposite elbow. Their body language looks powerless and as soon as you start down that path you’ll feel powerless. Your mind responds to your body – it becomes self-reinforcing. So one thing you can do is pause. Start speaking more slowly. Start taking deep breaths, not in an obvious way, but slow your breathing. If you have to put your hand on a table in front of you, do that. Your body language sends signals to your nervous system sending your mind into crisis mode. If you force your body open you’re sending a message that you’re safe, you’re okay. Non-verbals are very important. You can practice. Pay attention to the moments when you start to collapse – pay attention to your body. If you can even just open up your shoulders and roll them back, it will help make it more instinctive in these situations. Worry less about the words and more about the body language. Worry about the impression you’re making on yourself, rather than others. One will help the other. You’re not engaged when you’re in panic mode – you’re thinking about everything else but the moment.
Speaking more slowly makes people think you’re more powerful and it makes you feel more powerful. It acts like a punctuation mark when you want to make a point.
You don’t have to have all the answers right away and people don’t expect that. Investors want confidence without arrogance. They don’t like people who are too cocky. That’s not the kind of person they want to work with or invest in. Startups shouldn’t have all the answers. You should have developed ideas, but you’re asking for money and collaboration and when you are truly confident you can accept input even if it’s critical because it helps make your idea better. That’s what needs to come across.
Guttman: What are the most important things to convey?
- Believe: in your story
- Confidence: without arrogance
- Synchrony: communicate in a way that’s harmonious with yourself. You can’t fake that.