At first, I found it strange that I had gotten so into StartUp, former NPR economics reporter and Planet Money co-founder Alex Blumberg’s new podcast about attempting to launch a network of podcasts (it is, as Blumberg points out, pretty meta). I’m not the target audience for a podcast about the business world, after all.
But as I listened to Blumberg fumble through his early attempts at raising VC, talk things over with his supportive but helpfully critical wife, and find and attempt to come to an agreement with a potential partner, I realized why I was hooked: This is, above all, a story about psychology, about how to charge out into uncharted territory and find success, about having difficult conversations in as productive a manner as possible.
He was surprised to find that his skills from years of translating complex economics and financial ideas into cogent radio-speak didn’t immediately translate neatly into the world VC-wooing. “It’s funny how I’m used to communicating ideas in one setting, and in another setting it all goes out the window,” he says. “I thought there’d be more overlap.”
A lot of this stuff isn’t an inherently easy task for the host. Pitching his nascent idea to a wealthy investor in the first episode, Blumberg sounds audibly nervous and unsure of himself. When I open up our interview by mentioning that he doesn’t instantly come across as the most confident person, he laughs. “Wait, what?” he says sarcastically. “Wait, I have no idea how I’m being perceived.”
He went into this project, he says, very much fixated on the idea of elevator-style pitches: You talk to a rich guy (it’s almost always a guy) for a while, and if he likes the idea — that is, determines it’s likely to be profitable — he gives you money, maybe right on the spot.
Not so in real life, says Blumberg. “I eventually realized that every investor is investing for different reasons. And that very rarely is ‘I’m guaranteed to make a hundred times what I put in,’ ‘cause you’re never guaranteed to make a hundred times what you put in.” As a result, dealing with investors is a longer process than elevator-pitch dream stories might have one believe — and a process that can be beset by attrition and frustration.
The mistake, as Blumberg learned, is sweeping all investors as fitting into one psychological profile: Some wanted to see every number he’d produced, every possible stream of revenue from now until the end of the world. But others were just really, really into the idea of helping fund a company that could one day produce quality podcasts, and therefore less concerned with the financial specifics. It seems like an obvious point in retrospect, but Blumberg didn’t find out until he started his podcast just how much of the fund-raising process is about understanding what’s driving each individual investor and therefore tailoring the message to best fit what they’re looking for.
One of the more interesting sequences from the podcast so far comes in the third episode, in which Blumberg and a potential partner, Matt Lieber, hold a couple meetings to determine the size of Lieber’s stake in the company, interspersed by conversations (recorded for the podcast) at home with their respective wives. They start in very, very different places, numbers-wise, and it’s clear both suffer from hurt feelings along the way.
As Blumberg explains, it was an experience that highlighted the extent to which conversations about money — even when conducted in as businesslike a manner as possible — are never really just about money. “Especially in this case, where the money’s totally imaginary, it is entirely a proxy for ‘How much respect are you giving me? How much do you value me? Do you understand where I’m coming from and all the sacrifices I’m making?’” said Blumberg.
What has Blumberg learned so far about the fake-it-’til-you-make-it aspects of launching a start-up? “Faking it effectively means knowing what part of the truth to tell,” he says. “And you don’t ever just want to be like, ‘Listen, you’ve got a lot of money. I don’t have any money, I’m trying to do this thing, I’m pretty sure it’s gonna work out. Just gimme that money!’ You can’t do that, right? You can’t be 100 percent honest.”
“Part of the problem with the very first pitch was that it didn’t feel totally sincere because I didn’t know what I was talking about, but I felt like I had to have a lot of bluster,” he said. “What I realized was, the less bluster, the better off. If you’re confident in your thing and you’re confident in your ability to find someone who will fund it … Then you’re not so needy and desperate and then people are much more likely to say yes. In that sense, it’s just like dating.” So “some measure of bluster is required, but just being able to tone it down the right amount is important” — especially when you happen to not know the answer to a given question.
No one wants a braggadocios know-it-all, in other words, but no one wants someone whose pitch is a muted, rambling mumble either. It’s a useful lesson not just for start-up founders, but for the rest of us, too.