The New York Times and CB Insights partnered this week to publish a list of the top 20 “winningest” venture capitalists in the world. I’ve personally interviewed some of the investors who made the New York Times list and I’ve followed the others. Seven of the top 20 have made notable remarks on the role that communication skills play in a startup or brand’s ultimate success. Their rank on the list appears in parenthesis.
Bill Gurley (1)
The great storytellers have an unfair competitive advantage.
Bill Gurley of Benchmark Capital (Grubhub, OpenTable, Uber) defends the use of PowerPoint decks during investor pitches. He says it helps VC’s evaluate how well an entrepreneur can communicate his or her ideas. According to Gurley in this article, In Defense of the Deck, “Investors are not solely evaluating your company’s story. They are also evaluating your ability to convey that story. Efficiently communicating your strategy, business model, and competitive differentiation is required for many critical things you will do as a company.”
Gurley says that communicators who can deliver a compelling narrative have several advantages. “They are going to recruit better, they will be darlings in the press, they are going to raise money more easily and at higher prices, they are going to close amazing business developer partnerships, and they are going to have a strong and cohesive corporate culture. Perhaps more to the point, they are more likely to deliver a positive investment return.”
Chris Sacca (2)
Storytelling is at the core of everything we do in this space.
The influential investor Chris Sacca manages a portfolio of over 80 startups and mature enterprises through his holding company Lowercase Capital. He’s known for seed and early investments in Twitter, Uber, Instagram and Kickstarter. He says founders must become the best storytellers. “It’s how you raise money. It’s how you recruit people to your company. It’s how you retain them. It’s how you talk to the press. It’s the cornerstone of everything we do in this business.”
Jeff Jordan (3)
Every great founder can tell a great story.
Jordan is the former CEO of OpenTable. As a general partner at venture capital firm Andreessen Horowitz, he led the Series B round for Airbnb. Jordan, too, looks for entrepreneurs who have one mythical quality — the ability to tell a compelling story that draws in the listener. “Every great founder can really tell a great story,” Jordan once said. “It’s one of the key things in a founder, that you can convince people to believe.”
Jordan says Airbnb co-founder and CEO Brian Chesky is an exceptional communicator. You can learn more about Chesky’s approach to storytelling in presentations in this Forbes article: “Airbnb’s Brian Chesky Leads A New Generation Of Brand Storytellers.”
The bottom line for Jordan: If an entrepreneur doesn’t have the ability to craft a compelling message around a powerful narrative, it makes it much more difficult to attract investors, employees, and press coverage.
Alfred Lin (4)
Culture is the thing that is actually going to be very, very important to scale the business as well as your team.
Before making the transition to venture capitalist at Sequoia Capital, Lin was the #2 at Zappos behind CEO Tony Hsieh. Zappos built an extraordinary culture around ‘delivering wow through service.’ In a class at Stanford University, Lin said a major part of a leader’s role is to keep the culture and the mission of the company front and center—and to communicate it often. When a leader makes culture a daily habit, the company will be rewarded in many ways—from financial performance indicators, customer loyalty, and employee retention. “I think you can have the smartest engineer in the world but if they don’t believe the mission they are not going to pour their heart and soul into it,” says Lin.
Fred Wilson (11)
Get people engaged in the conversation as soon as you can.
Fred Wilson, founder of New York City-based Union Square Ventures (Twitter, Etsy) once said that, when it comes to investor pitches, he wants an entrepreneur to use “hook and reel ‘em in” method. Grab their attention early with a bold or audacious statement. Above all, it’s “a bad idea” to waste time on a long backstory. Wilson doesn’t want to hear about your journey from the time you graduated. Get to the point and get to it early.
Wilson also recommends simplicity. For example, a business pitch for a new idea should only be about six slides. In a blog post, he wrote: “Like many things in life, less is more in fundraising slides. You can explain your business in mind numbing detail or you can inspire an investor and let them imagine. Guess what works better?
Michael Moritz (15)
Burning a message into a person’s skull is a rare art. In order to do that, it must be memorable, clear, vivid, and have an element of emotion associated with it.
When I interviewed the famed Sequoia Capital investor behind Google, Yahoo, PayPal, Airbnb, LinkedIn and other notable companies, we talked about how great leaders inspire others. For Moritz, clarity is everything. “You cannot lead an individual — let alone a team or an organization — without being able to clearly communicate the direction in which you want to go,” Moritz told me.
Mary Meeker (20)
I grew up believing that one person could make a difference.
Meeker is known for an annual presentation on the state of the Internet (Internet Trends Report). She’s also played a major role as a former Morgan Stanley analyst who helped the firm snag IPOs such as Google, Netscape, and Priceline. Today, as a partner at the Silicon Valley venture capital firm Kleiner Perkins Caufield & Byers, she sits on the boards of Lending Club, Square, and DocuSign.
Meeker agrees with legendary KPCB venture capitalist John Doerr that great leaders articulate powerful mission statements. Doerr once told Stanford business students that he’d rather invest in missionaries, and not mercenaries. Mercenaries, he explained, have “a lust for money.” Missionaries have “a lust for meaning.”
Missionaries, according to Meeker, consistently communicate their big idea in a way that attracts and excites listeners. In one interview Meeker said, “The powerful mission statement to me was Google’s — to organize the world’s information and make it universally accessible and useful. We were involved in that IPO, and I had to ask myself: “Are we in?” We could have said no. But I remember thinking, “Oh my God, they may be able to do this.”
Professional investors like the ones above see thousands of pitches and presentations every year. They are among the toughest audience an entrepreneur or business leader will face. They have high standards when it comes to communication skills and — whether or not we’ll ever pitch a VC — they can teach us how to be more persuasive and engaging.