An investor asks you a simple, direct question: “Have you ever lost a customer because they couldn’t figure out how to install your product?”
Your answer might be: “No, that has never happened.”
Or maybe: “Yes, that has happened once.”
It was a short answer, but you answered the damn question.
This is where it often goes wrong. Then comes the dreaded pause.
You don’t like that pause very much. It makes you uncomfortable. So you fill the silence by veering off into other topics or offering up more information:
“We’ve never lost a customer for that reason, because our product is incredibly easy to install.”
Pause.
“So that’s just not really the reason we lose customers at all.”
Wait. How did that happen? Now you’ve brought up an issue the person wasn’t even asking about. You have created an entirely new line of questioning, when you could have simply said, “No.” Or, “That has only happened once out of 400 customers, so it’s definitely not a trend.”
The next question is probably going to be “Can you tell me more about how you do lose customers?”
That pause isn’t by accident. It’s a tactic many investors use. After you provide the short, direct answer, a savvy questioner will often remain silent for a moment, hoping to get you to say something beyond the answer you’ve already given.
So when you’re asked a question, simply answer the question. If the investor wants to follow up with a related question, that’s great. But learn to be comfortable with the inevitable pause that will occur after you give a direct response to a direct question. You don’t need to fill the silence by elaborating on all kinds of other things or volunteering a bunch of additional information. Don’t create the next issue and remember that less is more.
Just answer the damn question.
The trick is actually understanding the question so you can answer it with data. “Have you ever lost a customer due to the difficulty of onboarding?” should be follow up “Why do you ask? Did you find difficulty in the onboarding process? To date, we lost about XX% of users at the 4th step. We are looking to eliminate it.” Most people dont ask the answer they want the answer to, they ask around it.
fair point, and i suppose it depends. for example, i wouldn’t ask that follow up question if the answer is “no”.
I think part of the reason for the word vomit after a simple question is that the entrepreneur is usually trying to create a rapport with the investor, and silence is awkward. Similar to what Micah is saying, I’ve found success in answering the question directly and then doing some reflective questioning. The answer to “Have you ever lost a customer due to the difficulty of onboarding?” — which if answered honestly probably has to be “yup.” 😉 — can be followed up with a series of questions:
1. Have any of your portfolio companies experienced issues with this?
2. How have they solved it?
3. Will you introduce me to them so we can chat about that?
4. [If the investor was an entrepreneur] Did you ever experience issues with this at [their previously super successful company]?
This accomplishes several things. First, it helps the entrepreneur learn things. Even if the meeting ends up being a total bust, at least they can learn something. Second, it opens the door for introductions within the investors network. This helps both parties gather more information on whether or not they want to do business together. Third, it helps establish a rapport by creating an engaging back and forth discussion.