A colleague of mine forwarded me this fascinating interview with Brian O’Kelley, founding CEO of AppNexus. There are several good gems in there, and as Brian is a fairly outgoing person, the read is enjoyable as well.
During one particularly difficult period of raising investment, after 40 rejections, he became depressed from the rejections – common among entrepreneurs – and got fed up with all of the effort in order not to receive a term sheet. He decided to wear shorts and T-shirt to his next investors… most of whom gave him term sheets.In Brian’s words, “My close rate with a suit on was 0 for 40 and my close rate wearing my regular clothes was like 3 for 5.”
Brian, of course, is being facetious. After all, the T-shirts didn’t cause the investments; they just happened at the time when he got in front of the right investors. As any science 101 student knows, “correlation does not necessarily imply causation.”
However, I would venture that this is a case where there actually is causality. Brian became fed up with the dog and pony show, and stopped dressing up for it. When someone has a mindshift like this, three important things happen at the same time:
- The person becomes more relaxed. The moment one stops caring what investors think, s/he projects calm confidence, which increases investor confidence, making a deal more likely.
- The person becomes more comfortable. Someone who is comfortable in casual clothing yet feels fake in a suit will act more natural and more confident in casual clothing, making a deal more likely.
- A person picks their audience. If you know investor X is formal and prefers suits, you are more likely to filter them out quickly. In sales, we call this lead qualification, and since raising venture capital is a form of sales, good lead qualification improves your deal closure rate.
While Brian was joking about the shorts and T-shirt, in reality his mindset combined with his comfort level in the outfit and lead qualification very likely had a real positive impact on his success.
The clothes actually do make the entrepreneur.