The “Dinner Party Jerk” test is a solution to a common problem:
Startups often struggle at pitching their team, even though for the earliest stage companies, it’s incredibly important to do it well to raise capital — as I’ve described it below:
Pre-seed- Bet on the team
Seed- Bet on the product
Series A- Bet on the traction
Series B- Bet on the revenue
Series C- Bet on the unit economics
To figure out if you are properly pitching yourself in your team, run the thought experiment of describing yourselves at a dinner party. If you are pitching yourself hard, then if you are a kind human, you will turn red and blush with wild embarrassment. The reason is that a proper pitch includes many of your credentials, your achievements, the ways in which you and your team are highly unique, and we simply don’t talk like this at dinner parties. And yet this is exactly what you should do when you talk to investors, partners, customers, and potential employees.
Don’t hold back
Be the dinner party jerk, pitch yourself hard. Don’t hold back. Your shyness and cordiality is not helping.
I find that most founders tend to focus, primarily on describing their idea to the exclusion of everything else. I’ve heard thousands of “elevator pitches” and they generally focus on the idea and not the team, the market, differentiation, or anything else. And they downplay their achievements or omit them.
Of course what you emphasize depends on your background. It’s often described that there are repeat founders and first time founders, but furthermore, there’s another axis, which is about obvious credentialing versus not. For first time founders that are starting a gaming company, for instance, but have already spent years at a top company in the field, a quick modification to the elevator pitch, mentioning that, is both beneficial and quite obvious. But what do you do, you’re an uncredentialed first time founder?
Then the question becomes, what is your “earned secret“ behind the idea? Having a pithy story about how you were a Shopify seller, and that’s how you got to building any commerce product, is incredibly helpful. And if you have some metrics or an observation about the market that’s non-obvious, showing your expertise in the field, is even more valuable. If you have various credentials either professional, or academic or open source, achievements, it might be worth working those in even if not directly related.
The other very awkward thing is to use facts and figures to describe yourself. If in your previous work, you worked on an app that served millions of people, or for your current company, you recently launched and got your first 10,000 users, you should save these numbers. Any traction and any validation is incredibly helpful proving your case. And of course, this is another thing that would make you a dinner party jerk.
Why don’t we do a better job of this? The dangers of conformity
You might be going through a moment of introspection now and asking why am I like this? Why do I downplay achievements when I should be amping them up?
My answer to this, is conformity. In real life, we often subconsciously conform to the people around us. If you go off at a friendly gathering about all the cool stuff you’ve done, and why you’re going to be great, there’s a fear that you’re exaggerating the differences between yourself and others. There’s a fun theory from evolutionary psychology that shyness is an evolved trait to keep us safe in a world where we grew up and tribes of a few hundred people, and a few wrong words might follow us around for our lifetimes.
This is also my theory for why people are reluctant to engage on social media and share their knowledge, when it’s obvious that it might be very helpful to them professionally.
TLDR; there’s pitch mode and dinner party mode. Learn to turn the former mode on!
Be an optimist
You have to be an optimist about your own product, your own startup, and yourself. That’s why when you pitch — whether to investors, to prospective employees, or partners, it’s important to talk about what might happen, not what you are doing today.
There’s a whole style to this type of pitch, and it’s a futuristic point of view that leans into optimism:
- Emphasize the future, not the past
- What it could be not what it is
- Play up even small bits of proof points
- The big things that might happen, if it works
- The upside rather than risks
- Signs the customers love the product, rather than revenue metrics
- Why this team has the grit and special knowledge to do it, not the credentials and work experience
- A unique narrative about why the world is moving this way
- Why you’re starting with a wedge, but your ultimate market is huge
I previously referenced the idea that international founders often describe this as the “American” way of pitching — the funny thing about this is that this isn’t the “American” way of pitching, it’s actually specific to the Bay Area tech ecosystem. It’s incredibly optimistic and futuristic that founders choose to describe their startups in this way, and furthermore, the people who hear these pitches choose to believe them.
Why this is the only way to pitch to investors, employees, and partners
Let me also make the argument that this is the only logical way to convince people to join you on your journey.
1. Investors
First, let’s talk about startup investors. a portfolio of startup investments is inherently risky, and the physics of venture math means that the winners have to be really big. It’s commonly said that out of a portfolio of ten companies, generally about half the investments will go to zero, three will return a little bit of money, and that the top one or two will return 10x plus and make the fund work. As a result, professional venture investors are trying to understand if you have what it takes to be one of those top two, and if you don’t if you’ll die trying. A lot of this assessment focused on the market or your numbers, but sometimes the real question is about your ambition.
So they are trying to answer a simple question: Do you WANT to create one of the leading companies in the industry?
Focusing on the future and on the upside shows your will to power. It allows investors to gain a sense of that signal. If you’re focused too early on profitability, rather than growth, or retaining your piece of the pie, as opposed to growing the pie as large as possible, that’s an important signal. The point of this isn’t to mislead investors into thinking that you’re trying to do something that you’re not, but rather, if you are shooting for something big, you have to really express that in the clearest way possible.
The perspective is often directly reflected (and not) in the slide decks I review at a16z. Does the product slide describe the features of what the app has today, or does it talk about the product roadmap of what’s going to be built in the future? Do they user projections or financial forecasts simply show the last year’s performance, or does it tell a story about how the business is about to inflect? Oftentimes when founders are too conservative about their story it’s hard for investors to understand what they’re trying to do in the long run. Instead, I love it when founders tell the big story. Of course I’m going to discount it and round down, and assume that many features are never shipped. But I love to see it.
2. Employees
Second, let’s talk about employees. typically when you’re hiring your first few employees, you might be able to give out a few percentage points each, particularly for key people (like engineers or designers). but within a few hires, you end up needing to convince people to work for below pay, and for a fraction of a percent of the company. Why would they do this? Why would they work for you instead of either starting their own company or getting a cushy gig somewhere else where they might be paid much more?
The asymmetric advantage of startups compared to many other opportunities, is that they are adventurous and fun. The startup might fail, but the work is generally a lot more interesting than what you can do elsewhere. The responsibility and scope that a junior employee might have might go way beyond what makes sense at any other company.
And of course financially there is upside. For founders to convince high-quality employees to join their outfit, it’s often important to lean into a sense of adventure. What’s more adventurous than tackling a big huge goal, that might not work, but if it works, it’s going to be amazing? For founders to communicate the sense of adventure, they need to be able to weave a narrative. Maybe it’s us versus them, or David and Goliath. Perhaps it’s exploring the unknown, and going to the frontier when no one else is there. If you can’t tell the stories, how can you expect people to follow you? Thus I find it important to tell the futuristic narrative that’s ambitious, full of surprises and upside, and has a possibility of failure too. It makes the work meaningful and makes the potential economic upside worth something.
3. Journalists, partners, and more
We’ve talked about investors and employees, but there’s actually a long tail of many other constituents that benefit from a futuristic outlook. if you’re talking to journalists and pundits, you have to compete with thousands of other companies that they’re going to meet this year, and you have to catch their attention. If you’re marketing, an event at a conference adjacent to dozens of other events, you have to catch the eye of attendees. An optimistic, futuristic perspective gives you room to tell the story about the problem you’re trying to solve, and why your startup will be incredibly important once you get there.
You might say that the world is full of cynics. Perhaps you are from a region or an industry where most people nitpick all the reasons why fail. Maybe they want you to focus on minimizing downside risks, or acknowledging your potential problems, and won’t treat you as credible unless you do. If that’s your industry network or your social network, I urge to you to escape. Seek out those who share your optimism, and the same values and beliefs about the future. it’s one of the reasons why the Bay Area has been such a powerhouse over the last few decades. Yes, there’s knowledge and investors here, but more important is the culture.
The last point I make is about yourself. You should talk about what you’re working on in an optimistic way to help create meaning for yourself. For those of us who grew up in a generation that adored Steve Jobs, there’s always been the goal to put a dent in the universe rather than to sell sugar water. Thinking about the future, and the upside of what you might be able to create, is a great way to give meaning to the nights and blood and tears that we put into our work. If you’re simply working on a new product only because it’s a good money-making opportunity, I guarantee that your sense of meaning will fade when times get tough. You’ll ask yourself, why am I doing this? If you don’t have a Northstar to guide you on an inevitably rocky, entrepreneurial journey, you’ll inevitably get lost. That’s when the FAANG job will seem really appealing.
Obviously, don’t drink your own Kool-Aid
This is all about the pitch. Of course it’s important to simultaneously hold in your mind all the truths about what you’re working on. Maybe you don’t actually have product market fit yet, or your marketing strategy. Perhaps your unit economics don’t yet work, or your team has major gaps. If you’re working on a new startup, likely, everything feels constantly broken, and everyone’s maybe going to quit.
You have to go and tackle all of those challenges with a clear mind — while simultaneously keeping a futuristic spirit that motivated people to join you on your journey.
