The world is changing, and the “supplier power” of VCs is eroding.  It doesn’t cost what it used to to start up a startup, and the more nimble of us VCs realize it.

So, to make a long story short, we need to hone our pitching skills.  Which means we need to pay attention to Solution Pitching ourselves.

Imagine if we didn’t.  Imagine what an interaction with a VC would be like if we dwelt on the Market Problem the way less Solution-Pitching-savvy entrepreneurs do:

Entrepreneur: Hey, how’s it going?

VC: Are you aware how acute the capital shortage has become?  Many entrepreneurs today tell us that they are literally starving for capital, starving for relationships that will move their business forward, and in deep need of answers to these problems.

Entrepreneur: Huh?  Are you a VC looking to fund me?

VC: I’ll answer your questions in a second, but for right now just let me picture to you the terrible situation that everyone in the technology-innovation business is going to be in when capital shortfalls for startup investment reach $200B in 2015 as they are projected to do by VentureSource.

Entrepreneur: Are you offering capital to people with businesses like mine?

VC: Some sources of capital provide only partial solutions to this problem.  So-called “angels” can offer smaller amounts of capital, but their Rolodex is significantly smaller than what entrepreneurs need.  And bank loans, which many think would be a good solution, are poorly adapted to the risks of a startup venture.

By now the entrepreneur has gone from confused to irritated.  His questions are not being answered, he’s not sure if he’s wasting his time, but most of all he’s being talked at rather than talked to.

It’s not the road to a Solution.

I’d like to put the PaaP Test to a test.

I’ve been in a lot of presentations where the presenter made morbidly intense or prolonged eye contact with the audience.  In one particularly uncomfortable pitch, the presenter had somewhat bulgy eyes and, in addition, was making unremitting eye contact with me.  I probably didn’t hear a word of his pitch.

Let us call this behavior The Piercing Gaze.

I know where it comes from, of course.  The presenter has been told to make eye contact with the audience, and (s)he believes you can’t have too much of a good thing.

And I think that putting this pitch behavior to the PaaP Test is pretty much like shooting fish in a barrel.  But let’s try.

Say you’re at a party.  A stranger comes up to you, looks you fixedly in the eye, introduces himself, shakes your hand, and proceeds to make some pleasant small talk about the party, drops in some tasteful biographic information about himself, and so forth.  He asks your questions, listens to your answers, and generally carries on well.

Except that he’s staring you in the eyes without moving his gaze the whole time.

We’d be somewhere between alarmed and creeped-out.  But more importantly, nothing else he did would make any difference.  We wouldn’t want to spend a second more with him than we had to.  We’d make some lame excuse the moment we could and flee.

There’s an exercise that people do in Ropes Courses kinds of groups (remind to talk about them some time) where you pair off and stare into one another’s eyes for a minute.  Very intense.  Maybe very revealing.  Definitely not a way to get the Other to relax, trust you a bit, and listen to what you have to say.

A good conversationalist at a party makes eye contact rhythmically: maybe at the beginning of a paragraph, a couple of times (with a smile or an ironic look) in the middle, and then as a closer at the end.

That’s the right way to make eye contact in a pitch.  It’s the PaaP-Test approved way.

No, not “Pap” Test.  “PaaP” test.

It’s the “person-at-a-party” test, and I’ve used it implicitly in my posts on your-audience-tuning-out and (in the form of “person-on-the-telephone”) in my post here.

The test is pretty simple: take an interpersonal behavior, and see how appropriate it would be if someone you didn’t know came up to you at a party and exhibited it.

Example: Repeating the name of your prospect or target.  “What would you say, Dan, if I were to say to you, Dan, that you, Dan, could be the winner of more money than Dan has ever taken home in his life?”

PaaP Test: If someone did this to you at a party, you’d be circling around them to make sure they weren’t blocking your access to the exit.

Example: Forcing your prospect to listen to your presentation in the exact order you created it.

PaaP Test: Imagine someone at a party who continued through a long canned self-introduction and wouldn’t stop to answer your question about how they know the hostess.

It’s a powerful test.  The PaaP situation is anonymous enough that we don’t have giant expectations of the people we’re interacting with.  But it’s also a human situation, so there are boundaries, and when someone crosses them it’s obvious.

We’ll be applying the PaaP Test liberally in posts to come.

It seems really peculiar to even write a post about this, since staying in touch with your audience seems at the heart of presenting.

But it’s no surprise, in this era of non-Solution Pitching, that presenters really don’t stay very tuned in, and that includes tuning in while presenting.

So let’s not assume anything, and instead try to come up with a list of telltale signs that your audience is not as into your presentation as you may be.

1. Body Language.  Our old friend body language.  Are your listeners folding their arms, hunkering down into their chairs, avoiding your eyes?  Chances are they’re getting bored, but don’t know how to tell you.
2. Fidgeting.  A special variant of body language.  If your audience is shifting back and forth, legs are tapping, feet swishing up and down: chances are they’re getting bored.
3. Playing with tech toys.  When your audience starts firing up smartphones, tablets, or Google Glass wearables, chances are they’re not doing it to take notes.  They’re tuning in another channel, not you.
4. Not meeting your eyes.  When your audience won’t meet your eyes any more, there’s something they want you to know: you’re turning them off.  (Special case: if you’re staring at them relentlessly, they won’t meet your eyes anyhow.)

Those are probably the Four Horsemen of audience indifference.  And they share a common cause:

If you don’t pace your presentation and take the temperature of your audience from time to time, you will turn them off and they will tune you out.

Let’s suppose you went to a party, and someone started talking to you.  They didn’t stop, they stared at you the whole time, and when you tried to turn away they pulled you back to face them.  You’d think they were insane; you’d tune them out; and you’d look for the first opportunity to run away from them.

But isn’t this just what some pitches are like?

Of course nowadays an amazing number of presentations are given by phone or Webex or the like, so most of these cues from your audience – body language, fidgeting, glazed expressions, playing with toys – are inaccessible.  But even in these venues you can take the temperature of your audience.  Pause frequently, so people can speak up.  Try to have one live audience member with you, so you can use them as kind of a canary-proxy for the unseen ones on the phone.  And – sparingly – ask the unseen audience if what you’re saying makes sense.

Something I learned 20 years ago has made a huge difference to my writing, presenting, and pitching: you have to know what your audience is thinking.

The original idea came from a how-to book on writing I read back then, but it’s a common enough meme.  Typing “you have to know what your audience is thinking” into Google just now (sans quotes) gave some 46M hits (although only 8 for the quoted string).

If you bear in mind, when making a pitch, where your audience is going to be mentally at each stage of the pitch, you will certainly make a better pitch.

Take the usual custom (in which entrepreneurs are widely coached) of spending a huge number of slides at the beginning of a pitch describing and justifying the market problem your startup will address.

Complete waste of time.

Most investors will fall into one of three camps in the first 20 seconds of your “market need” recital:

1. I get it, I agree 100%
2. I get it, I disagree 100%
3. I get it, I’m not sure if I agree or disagree, but I’m willing to stipulate that there is such a need for the sake of argument while you tell me what you’re going to do about it.

In all three cases, they’ve made up their mind.  Ten more slides will only put them to sleep.

Of course, short of telepathy, we can’t know what our audience is thinking.  But we can make shrewd guesses along the lines of the above.  And making the effort really opens your mind to how to structure the pitch so that it tracks with your listeners’ real state of mind, which puts you way ahead of the pack.

Prior to becoming a VC, I pitched startup ideas to VCs (and others).  I’ve had my share of rude, entitled VCs who, I felt, gave me short shrift.

But from the other side of the table, I see if not as a problem with the VC but as a problem of the entrepreneur’s conception of and contact with the VC (s)he is pitching to.

What do I mean?

I just finished an email exchange with an entrepreneur who had cold-called our offices and asked to speak to someone, anyone, about his idea.  To this guy, the relationship with him was irrelevant, and all that mattered, or ought to matter, to me was the quality of his idea and his proofs that the idea resonated with potential customers.

Actually, it’s just the opposite.  With a  very early-stage idea, the character of the entrepreneur matters much much more than the quality of the idea, if only for the simple reason that most ideas that succeed as businesses do so by changing course in reaction to circumstances (what we now call “pivoting”), and the entrepreneur needs to be someone with the vision, fortitude, and, yes, the character, to know when to hold and when to fold.

When the connection is a cold call or a cold email, we know nothing about this entrepreneur’s character.  So I have a general rule that if an entrepreneur is not introduced to me by someone I don’t go further with a project.

What does mean for entrepreneurs who don’t know any VCs?  It means you have to get to know us, through accountants, lawyers, other entrepreneurs, startup helpers such as incubators, accelerators, and the like.  You could also start in a cold contact by introducing yourself and saying something about your background.

This entrepreneur responded to my rejection by saying that VCs didn’t get it, he would never understand us.  I would ask him what he would say if a person unknown to him called him up on the phone and asked him to invest $1M in his idea, how would he react?  He would probably (I would guess) want to know the person he was dealing with a bit better before proceeding with him.  And if he had enough people calling him, he probably wouldn’t have time to get to know everyone who called in.

I wish it were a different world, where there was enough time and bandwidth for everybody.  But lacking that, knowing what your potential investor is thinking will help you figure out how to approach him or her.