Should You Focus On Why Your Idea Is Useful Or How The Idea Works When Pitching To An Audience Of Investors?

Should You Focus On Why Your Idea Is Useful Or How The Idea Works When Pitching To An Audience Of Investors?
Should You Focus On Why Your Idea Is Useful Or How The Idea Works When Pitching To An Audience Of Investors?

There are two camps on the most effective way to frame an innovative idea. One contends you should emphasize why the idea is desirable. The other says you should focus on how to implement the idea. Which one is right? A research project found that the answer depends on your audience. If you’re making a pitch to novices, focus on why. If you’re making it to experts, focus on how.

Framing your message is the essence of targeting a communication to a specific audience. It is the art of pitching an idea to get the broadest possible support. Although conceptually intuitive, the reality is that most of us don’t think strategically enough about how to properly frame our ideas to maximize impact because we take communication for granted. This can be an especially severe limitation for entrepreneurs and innovators striving to get their projects off the ground.

There are two distinct camps on the best way to frame an idea. In one of the most popular Ted Talks, Simon Sinek argues that if we want to mobilize people and resources around an idea, we should frame our message by emphasizing the why of what we are trying to achieve. Communicating an idea’s purpose, he says, makes it easier for people to engage with the idea because it allows them to understand the motives and goals behind it.

In his best-selling book Originals, organizational psychologist Adam Grant takes a different position: He points out that innovators who frame novel ideas by pointing to a lofty purpose are more at risk of violating people’s notions of what is possible. Instead, Grant suggests, skeptics may be more likely to be persuaded by focusing on how you plan to implement your idea.

Who is right? Is a why or a how oriented framing more effective in eliciting support for one’s innovative idea? Take the case of an entrepreneur chasing seed money to start a new venture: Should she focus on why her idea is useful or should she instead promote a more concrete focus on how the idea works when pitching to an audience of investors?

To find out, we conducted a study, which the Strategic Management Journal published in August. We designed a set of experiments that involved asking two groups of people – a group of investment novices (Sample 1) and an expert group of professional venture capitalists and angel investors (Sample 2) – to evaluate a PowerPoint presentation of an entrepreneur’s pitch of a novel idea. We then examined whether their responses to the idea varied when the innovator framed the solution in terms of concrete actions (e.g., “How the product/service can satisfy specific goals”) or high-level purposes (e.g., “Why the product/service is desirable”).

Sample 1 consisted of a group of 129 investment novices recruited via Prolific, an online UK-based platform of high-quality data. For Sample 2, we recruited a group of 59 professional investors affiliated with three centers for entrepreneurship located in the United States and Canada. Participants were invited to view and evaluate two pitch decks based on an actual product prototype for a wearable exercise sensor: one that emphasized in factual terms what it did and how to use it, and a second that explained why you might want it.

As anticipated by Sinek, novices appreciated the idea more when it was framed in more abstract why terms. However, experts appreciated the idea more when it was framed in more concrete how terms, as Grant suggests. The difference turned out to be sizable. A why frame, as opposed to a how frame, increased novices’ probability of appreciating the idea by 25%. Conversely, pitching the idea emphasizing a how rather than a why frame boosted experts’ probability of selecting the idea by 44%.

To double-check the results of our first two experiments, we recruited a different group of novices and a different group of experts (innovation managers) and asked them to review the pitch for another product, a special sun lamp that mimics natural light. These additional experiments confirmed our findings. Choosing a why or a how framing does make a significant difference in mobilizing support, but there is no universal framing solution. Instead, there is a right framing for the right audience.

Why It Matters

The experts (e.g., professional investors or innovation managers) are individuals who, over a long period of time, have acquired significant experience in evaluating innovative ideas, while novices are not used to evaluating ideas. Lacking expert knowledge, novices concentrate more on the desirability of an idea and its ultimate benefits. Pitches with an emphasis on why help novices appreciate the reasons for an idea and why it is desirable, particularly if they perceive it as useful. This is what matters most to them. Experts, on the other hand, are more likely to respond to concrete arguments about how something can be done, presumably because they already understand what the advantages of the idea would be.

Although audiences in control of resources that are critical to support innovation (e.g., crowdfunders, venture capitalists, angel investors, funding organizations, innovation or R&D managers, users, and so on) strive to select the best ideas, they often make mistakes. In the early-stage funding of entrepreneurial projects, key resource providers often overlook or even sneer at innovative venture ideas that later prove to be highly valuable. The founders of game-changing enterprises whose early pitches to potential investors were repeatedly rejected include the people who gave us Apple, Southwest Airlines, Airbnb, Grameen Bank, and Teach for America.

Our experiments demonstrate that employing a why or how framing is a terribly important choice, and whether it works better to frame an argument for an idea in why or how terms will depend on who is at the receiving end of the pitch. Innovators championing novel ideas have a better chance of appealing to novices (e.g., the crowd, friends, family members) when their pitch emphasizes why it is desirable. But the same ideas pitched to experts (e.g., professional investors, innovation managers) would be better served if the emphasis is on how something can be done. In other words, whether you should choose why or how depends on your audience.

originally posted on hbr.org by Simone Ferriani, Gino Cattani, and Denise Falchetti

About Authors:
Simone Ferriani is a professor of entrepreneurship and innovation at the University of Bologna and City, University of London. He is also a lifetime member of  the University of Cambridge’s Clare Hall College.
Gino Cattani is a professor of strategy and organization theory at New York University’s Leonard N. Stern School of Business.
Denise Falchetti is a post-doctoral research fellow at the University of Bologna.