interested is not signed... how to show traction to investors

tuesday night was spark tank number sixteen.

four founders pitching live. three of us on the investor side... charles, me, and one more. around a hundred people watching on the call.

i noticed afterwards that i asked the same question twice, in two different costumes.

the first founder sells a hardware tool to tradespeople. he said he had fifty buyers. so i asked him...

so of the 50 buyers, how many have used it on multiple jobs? and like, what made anyone stop using it?

he didn't have it. he was honest about it, which i respect.

um, yeah, i wish i had a better answer for that.

he'd been disconnected from the follow up data. he knew how many he sold. he didn't know how many kept using it.

the second founder was in healthcare. roughly fifty organizations lined up. so i asked the same thing in different clothes...

how many have signed agreements versus just expressed interest?

four live. six more signing.

fifty and ten are different companies.

here's what i want you to see. i wasn't trying to catch anyone. i was doing what every investor does in the first two minutes. i was translating the big number into the true number.

every investor has a mental exchange rate. lined up, in conversation, interested, keen... they all get discounted the second you say them. some investors knock them down by half. some by ninety percent. you don't know which one you're talking to.

signed doesn't get discounted. live doesn't get discounted. repeat use doesn't get discounted.

so if you say fifty lined up, the investor hears maybe five, and now they're wondering what else in the deck needs a discount.

if you say four live, six signing, and a pipeline of forty behind that... you've said the same thing, in the order a careful person would want it. and now everything else you say gets believed.

small true numbers buy trust. big soft numbers spend it.

the hardware founder's question is the one more founders should be asking themselves before anyone else does. not how many bought. how many came back. and when someone stopped, why.

that second part is gold, by the way. a founder who can say we lost three buyers after the first job, here's why, and here's what we changed... that founder sounds like someone who runs a business. retention with a reason is traction.

now here's the part that surprised the room. at the end, charles ranked the hardware founder as the most investable of the night.

the one who didn't have the answer.

because the presentation was clear and the problem was clear. you could see the buyer, you could feel the pain, you could picture the product on a job site. missing data is fixable in a month. a fuzzy problem isn't fixable at all.

so the lesson isn't hide your gaps. it's know which number you're saying and say the true one first. investors forgive a small number. they don't forgive finding out it was small.

if you're building your traction slide this week, try ordering it the way an investor will. what's live and paying. what's signed and starting. what's in conversation. then, last, the big number. same facts. a completely different read.

long term, the founders who raise easily are the ones who build the habit of measuring the thing investors will ask about before they ask. signed versus interested. used once versus used again. stopped, and why.

if you want someone to ask those questions before an investor does, that's what we do when we red team a deck. we can't promise who says yes. we can make sure nothing in there needs a discount.

so look at the biggest number on your traction slide... what's the true number underneath it?