There it goes again, the “IF” word, about which I have blogged previously. This time I saw a classic example of it on the BBC’s Dragons’ Den, broadcast last Sunday. In this example, a simple use of the word “IF” saved the lady £100,000, right there before our very eyes.
Dupsey Abiola is the CEO of Intern Avenue, a website linking organisations with interns. She came to the Dragons’ Den asking for £100,000 in return for a 10% share in her business.
After an impressive pitch she ended up with 2 offers, from millionaire investors Peter Jones and Hilary Devey. This is the first time a recruitment company has been invested in since the programme started 7 years ago. Both Peter and Hilary offered the full £100k, but both wanted a 40% share of her business in return.
Showing tremendous calm under intense pressure, Dupsey played it brilliantly. “Can I just have a moment to think?”, she said, thus gaining the power of the Strategic Pause (in which your response gains more credibility for having been thought through, whilst allowing you time to THINK!). Ten seconds later, her response was text book stuff.
Dupsey: “Peter: IF I were to say that if we met our target you would invest at 30%, how would you respond?”
Peter(almost leaping out of his seat and NOT pausing to consider!): “I think that is a very good compromise, and I’d be more than happy to accept it.”
Kerrching! By saving a 10% share of her business, Dupsey has saved herself a cool £100,000. Just by using the “IF” word.
If only she had gone further and tested how far he would go (by asking again and getting him to the point where he said ‘No Deal”) she might have saved even more. But I have to hand it to her, this was superbly done.
Here’s Dupsey’s website with the full BBC programme on it. If the video works in your part of the world, the critical moment comes 56.46 minutes into the programme.
It always amazes me how few people challenge the Dragons on their offers, which are invariably for a much higher share of the business than the owners offer at the start. If only they would accept that the Dragon is opening up with their Ideal position, and they don’t necessarily expect to get it, they could save themselves a lot of money. They get carried away with the euphoria of having any sort of deal on the table, and 90% of them accept at the level the Dragon offers. The advice has to be to slow things down and never accept anything at face value (especially if you are up against someone who has learnt over the years to play the negotiating game.)
Well done, Dupsey. You deserve to have won the respect of a shrewd investor, and he will think the more of you because you pushed back and met him with a spoonful of his own style. When you have got to know him better, try asking him how far he would have gone if you had pushed harder. I’d be willing to bet you could have got him down to 25%.
Best of luck with the business: I’m sure it’ll be one to watch.
POSTSRCIPT. Dupsey and I have corresponded, and she agrees with the points I have made. She does point out however that there was 2 hours of footage originally, and there was dialogue and negotiation which of course we did not have a chance to see.
Photo courtesy of BBC.