Panhandling techniques cover the spectrum from menacing demands to sophisticated appeals for help. You can angrily shout, “Hey, got any change?” and you might net yourself a nominal number of donations from fearful passersby. However, your overall productivity will likely be poor. Alternatively, you can deploy a more sophisticated and correspondingly a far more effective panhandling approach, in which you first establish a personal connection and then make a specific request.
Networking is akin to Corporate Panhandling. Instead of seeking spare change, your goals are far more lofty. In order to enhance your adVenture’s chances of success, you must convince potential Donors to hand over their precious time, valued relationships, advice and money to your adVenture. A quick review of street panhandling techniques offers interesting insights into enhancing the effectiveness of your Networking efforts.
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Does Anybody Really Know What Time It Is?
According to the now deceased Need.com, the reported earnings from a survey of panhandlers ranged from $15 to $100 per day. If you assume a six-day work week, a diligent panhandler can earn an untaxed salary of nearly $30,000 a year, which is a significantly greater than the annual pre-tax earnings derived from minimum wage. What differentiates the upper echelon of panhandlers from their beggar brethren?
Sophisticated panhandlers realize that they can maximize their take if they successfully establish a situation in which a passerby can help them and gain something of value in the process. For instance, rather than yelling at prospective donors on a random street corner, a successful panhandler will strategically position himself at a busy mass transit hub (airport, train station, bus depot, etc.). They will then set up their ask by staring at the schedule of arriving planes / trains / buses, in an effort to appear to be a harried but solid citizen and not a beggar.
Rather than initially ask for money, they stop would-be donors and proffer a seemingly innocent question, such as; “Do you have the time?” or “Can you give me directions?” An initial, non-threatening, non-monetary request establishes a baseline rapport between the panhandler and the Donor. As discussed in Single Serve Bros, this personal connection is a vital prelude to consummating any exchange of value.
Once the panhandler is told the time, directions, etc., they then exhibit a need for further assistance by appearing alarmed, at which point they request a nominal amount of money for a specific purpose (e.g., phone call, cab ride because they are at the wrong transit station, flowers for girlfriend who is immediately arriving on a plane/train/bus, etc.).
In most instances, if the panhandler has adequately established a rapport, they are successful in extracting a few bucks from the Donor. Donors give their money freely, because they understand the panhandler’s specific need (i.e., they believe that the money is going to a worthy ‘cause’, rather than to purchase beer, cigarettes or drugs) and they derive the satisfaction that comes from doing a good deed.
Let’s review the effective panhandler’s technique:
- First establish a rapport by making an innocuous, non-monetary request
- Follow up with a clear sign of distress / need in the hopes of inviting an offer of help
- Next articulate a small monetary need that is the source of your distress
- These steps establish a quid quo pro transaction; the panhandler receives cash and the Donor gains the gratification derived from assisting someone in need
Corporate Panhandling, also known as Networking, is an entrepreneurial skill that you or a member of your Core Team (see The Tribe) must master. Effective Networking allows you to economically expand the pool of resources at your command and thus enhance your adVenture’s chances of success. As you consider the elements of successful street panhandling that you can apply to your Networking efforts, note that deception is not an effective Corporate Panhandling tool. As noted in Time Wounds All Heels, you are always well served to liberally deploy honesty in all your professional interactions.
The donations derived from your Networking efforts will range from a casual introduction to the hiring of a key employee to the landing of a substantial investment. As discussed in the Small Ideas, Big Benefits, Brownian motion plays a significant role in an entrepreneur’s ultimate success. The relationships you establish early in your startup’s life will have an unforeseen impact upon you and your adVenture, often years after a relationship is initially established.
As an entrepreneur on The Fringe, consider each of your social interactions as the first step that could ultimately lead to the identification of a new stakeholder. Stakeholders come many forms, including: investors, customers, employees, vendors, partners and word-of-mouth evangelists. During the early stages of your adVenture’s life, you are in the business of establishing as many meaningful stakeholder relationships as possible as each stakeholder represents someone with a vested interest in your adVenture’s success. Donors are often conduits to stakeholders. In some cases, Donors themselves evolve into meaningful stakeholders. Once established, each stakeholder relationship must be cultivated and nurtured. As such, Networking can be an exhausting and time consuming activity, but it will result in long-term dividends for your adVenture.
Yea, yea, yea. Most entrepreneurs appreciate the importance of crafting a succinct, well rehearsed elevator pitch that describes their adVenture. This concise, yet informative description of an adVenture should be comfortably told during the reasonable duration of an elevator ride (no, not an elevator ride in the Empire State building…).
A Personal Pitch differs from the classic elevator pitch, as the focus is on you and not your adVenture. Donors help people, not companies. As such, the most effective way to enlist donor participation in your adVenure is to effectively tell your story.
An effective, cogent Personal Pitch should detail:
- Who you are – your interests, experiences, education
- Where you are going – your fantastic entrepreneurial dreams
- How you plan to get there – your tactics for turning your dreams into reality
If you force yourself to answer these questions in a contemplative manner, you may find that you may be surprised with the result. Cut through the veneer. Do not tell the potential Donor what you think they want to hear. If you want to sail around the world for a year, say so. You never know, you may bump into someone who sells used sailboats at cut-rate prices.
Business is built upon conversations. In order to make your conversations as plentiful as possible, make it easy for Donor prospects to make a donation. To poorly paraphrase Jerry McGuire, you must “Help Donors help you”.
If none of your potential Donors know where you are going or how you intend to get there, it will be nearly impossible for them to assist you. Thus, if you meet someone at a social gathering and they ask you about your career plans, you are not properly guiding the would-be Donor if you reply, “I’m not sure. I might start a business.” Other than concluding that you are likely a loser, there is little chance they will recall even speaking with you, let alone express a desire to help.
In contrast, if you reply, “I have a Bachelor’s degree in chemical engineering and I have always wanted to start a company. However, I intend to first join a startup, preferably one which is focusing on renewable energy technologies.” A clear and concise response will greatly enhance the probability of generating meaningful Donor assistance.
Successful entrepreneurs know what people like to talk about the most – no, not sex or money. Many people, especially successful potential Donors, prefer to talk about themselves. As noted in Listen, active listening will help you establish a meaningful rapport. The more you know about the Donor in-waiting, the better you can match your Personal Pitch to their world. Also, by listening closely, you can ensure that the other party understands your story and thus can offer impactful help.
If the potential Donor asks you a question that stymies you, do not be afraid to say, “I don’t know, but I will find out the answer and follow-up with you”. “I don’t know” is one of the rarest phrases uttered in a business setting. However, humility is such an uncommon entrepreneurial trait that the potential Donor will likely be charmed and more willing to lend a hand if you convey that you do not have all the answers and that you welcome their help and insights. If you are stumped by a Donor’s question, ensure that your follow-up is meaningful and timely. Speaking of follow-up…
The 24-Hour Rule
Another way to help Donors help you is to ensure you are accessible and responsive. To this end, return 100% of your phone calls and non-SPAM emails within 24-hours of receipt. This includes calls and emails from: insurance agents, salespeople, stockbrokers, headhunters, people looking for jobs, etc. It is acceptable to return a call with an email response. If you cannot follow-up personally, delegate the responsibility and confirm that the follow-up took place. Irrespective of the medium of the response or whether it comes from you or your designee, it is your responsibility to ensure a reply is made within 24-hours.
“Oh, but I am too busy”, you may say. No my friend, you are not. If you think you are too busy, then you are focusing on the wrong priorities. People who receive far more calls and emails than you adhere to the 24-hour response rule. The excuse of being “too busy” is simply not valid. If Jack Bowers can save the world in 24-hours, you can return a few emails and phone calls.
Guy Kawasaki, the noted author of a number of great business books, including The Art of the Start, shares the 24-hour response philosophy. In a nasty test of his responsiveness, I emailed him in the middle of August 2006 at about 10:00 in the evening.
See if you can guess how long it took him to respond to me.
a) Ten minutes later
b) ~ 25-hours later
c) 10-days later
d) I am still waiting for his reply
The answer is at the end of this entry.
Not only is a 24-hour response a cordial way to conduct business, it also enhances your efficiency as well as that of the inquiring party. You eliminate sifting through redundant emails and calls and the person trying to reach you can focus their efforts on prospects that are a better fit for their products or services. Another good reason to follow-up in a timely manner is that the inquiring party may be seeking to help you. In a number of instances, my response to inquiries that I assumed were requests for assistance actually represented significant opportunities. If I had not taken the time to reply, some of these opportunities would have undoubtedly passed me by.
The $230M Return Phone Call
The initial conversation I had which ultimately led to the $230M sale of one of the ventures with which I was involved, began when I returned the phone inquiry from a low-level investment banking analyst. At the time, I was convinced that the banker was attempting to gather competitive information related to an ongoing deal which the bank was in the midst of crafting. Our company had a high profile in a growing market, so I frequently received such fishing expedition calls from bankers trolling for fees and industry data. As such, I expected that nothing would come from this particular call.
However, it turns out that the Investment Bank was in the early stages of identifying potential acquisition targets for one of its large clients. This did not become clear until several phone calls into our discussion. Who knows what would have happened if I had chosen to not return the initial phone call. The deal may have still happened, and then again, maybe not.
You might think the $230M deal was a fluke or that it would have happened even if I had not returned the junior banker’s call. As such, here is another example to drive home the importance of the 24-Hour Rule.
I was on the Board of a software company that was in the midst of a distressed asset sale. The company broke the First Rule of operating on The Fringe and ran out of cash. We were about to close a disadvantageous deal to dispose of the company’s assets, as we felt that something was better than nothing.
Unbeknownst to me, the CEO had been contacted by a competitor several weeks previously, at a time when the company was in a more stable financial state. For reasons known only to the CEO, he chose not to return the competitor’s phone call.
Fortunately, the competitor followed up his unreturned call with an email in which he communicated his interest in purchasing the company. To our surprise, the competitor was unaware that the company’s assets were for sale. The CEO first spoke with the competitor on a Saturday and a deal to sell the company was closed by Friday of the following week.
Although we were fortunate to consummate a deal that was significantly more substantial than what we previously thought possible, it is conceivable that we could have sold the company for a significant multiple over the ultimate purchase price if we had responded to the competitor’s initial call. By the time we entered into talks with the acquiring competitor, the company had ceased operations and its value was deteriorating on a daily basis.
The one exception to the 24-Hour Rule is with respect to salespeople who just do not get it. If someone continues to contact you after you have made it clear to them that they should focus their prospecting efforts on better candidates, ignore their ongoing inquiries. Everyone deserves one thoughtful response, but no one deserves your infinite time and attention.
Go For The No
When seeking corporate Donors, be professionally persistent. Soliciting donations is a form of selling. Thus, the onus is on you to expediently determine whether or not the Donor is a qualified prospect who has the wherewithal and inclination to help your adVenture succeed. Encouraging the Donor prospect to give you a quick no is much more advantageous than suffering through a slow maybe. If you sense that a Donor is not a good fit, proactively withdrawal from the conversation before you wear out your welcome.
Networking and asking for corporate donations is also similar to raising money for a non-profit. You can only push people so far. At some point, it is prudent to not stress the relationship in order to maintain a positive rapport with the prospective Donor. In this way, you retain the option to approach them in the future with another request that might be within their donation comfort zone.
When possible, initiate your discussion with a likely Donor via an introduction from a mutual acquaintance. In fact, a Donor’s only donation may be an introduction to one or more additional Donors. Such warm intros may mean the difference between getting a Donor’s attention and being ignored.
Always thank your donor in a personal manner, such as a handwritten note or call at the time they make a donation. An email might also be appropriate depending on your relationship with the Donor.
If a particular donation pays off, thank your Donor again. For instance, if a Donor makes an introduction that subsequently impacts your adVenture (i.e., a new hire, investor, customer, etc.), communicate the specific benefit derived from their help. Remember, one side of the value exchange in each donation is the satisfaction the Donor obtains from helping you. If you do not inform a Donor when their help pays off, you are not upholding your end of the bargain. In addition, you are potentially limiting the Donor’s appetite to help you in the future.
I am consistently amazed and disappointed with the number of donations of my time, contacts, etc. that have gone unacknowledged by the recipient. I find it is especially bittersweet when I hear from someone other than the donee that a particular donation has resulted in a positive outcome. For instance, I was recently speaking with a CEO who had hired someone I had recommended. The CEO did the right thing by thanking me for sending the recruit in his direction. I was happy for the new-hire and for the team he joined. However, the fact that the donee did not take the time to contact me and let me know that my assistance had proved to be of value speaks to his character. Do not make this sort of rookie mistake. Donors love to help and they love to be thanked.
Answer To The Guy Kawasaki Trivia Question
Guy responded to me via email in less than ten-minutes. His response was brief, but thoughtful. He publishes his email address in all of his books and on his website. If he can apply the 24-Hour Rule to his prodigious email Inbox, so can you.
Please share your Corporate Panhandling exploits and how the resulting donations helped your adVenture achieve its goals. If there is a Donor you forgot to thank, help you karma and thank them in the form of a comment to this entry.
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