The worst mistake to make on Dragon’s Den / Shark Tank

0:26The Dragon's Nest. The concept is the same around the world, and investors have helped fund some incredibly successful companies. My name is Levi Roots. I'm looking for 50 ,000 for 20 % in my reggae reggae source. And some fairly unsuccessful companies. You win the worst invention ever to be brought into Dragon's Den. Today's guest on Nudge has studied these Dragon's Den style pitches to see what mistakes entrepreneurs make.

0:58Leslie John: We got this data set of entrepreneurial pitches and what we looked at was among the times when there's pushback, what does the entrepreneur do? And she's discovered something incredible. They were far more likely, it's like something like seven times more likely to get funding or it's some giant effect. All of that coming up in today's episode of Nudge.

1:25most businesses have an overwhelming amount of data it's typically scattered across the business in different tools with different teams but because it's scattered no one can use it that is where hubspot come in hubspot connects it all every interaction every support ticket every conversation and they connect it into one platform that every team can work from. Because when you know more, you grow more. Check out HubSpot.com, the agentic customer platform for growing businesses. Today on Nudge, I'm delighted to be speaking again with the Harvard professor and author, Leslie John.

2:05Leslie John: I'm Leslie John. I'm a behavioural scientist and a professor at the Harvard Business School. Leslie's written a wonderful book called Revealing. It covers her studies into sharing with others. In an earlier episode, Leslie and I covered how sharing some secrets with others can make you far more likable, how opening up can make us happier, and how honesty and transparency can make you more persuasive. But that's not all. In revealing, I discovered that Leslie, like me, loves watching Dragon's Den. After watching the show a few times, Leslie started to notice something. And I just watching the show, it's like it happens all the time, right, where they say their business plan and then the dragons or the sharks, like super seasoned business people, push back or question something.

2:49Leslie John: And then so often, like it feels like nine times out of 10, what the entrepreneur does is like they dig their heels in. They're like, no, no, no, no, no, you're wrong, right? And that just, as a viewer, that just seems like the wrong approach. I see this all the time on Dragon's Den. Take this entrepreneur. Hi, dragons. My name's Martin Gould. I'm the CEO of Waibu. Weibo helps consumers find the best value mobile phone contracts. One, download Weibo. Two, use your smartphone as normal. Three, sit back and wait for Weibo to match you to a deal that's best for you. One of the big selling points is that Weibo can tell you which mobile provider offers the best signal in your area.

3:27Not only do we match you on price, but we also match you on signal strength. But things start to unravel when investor Peter Jones starts quizzing the entrepreneur. Martin, hi. Hi, Peter. You said the selling point is the fact that it will tell you the coverage where you live, area and the best network for you. How do you get that information? So we crowdsource it from users. And how many users do you have? So today we've had 40 ,000 people that have downloaded our app. And how many people in the UK have a mobile phone? So there's 60 million people that have a consumer connection. 60 million people have a connection.

4:00Yes. And yet 40 ,000 people tell you where the coverage is. So I'm going to go on your site. I bet and I put my postcode in, you're not going to know whether the coverage is good for me or not. At this point, the entrepreneur has a choice. He can accept that he has a problem. He can be honest, he can be transparent, he can be open. Or he can do what Leslie says almost every entrepreneur does and he can dig his heels in and deny that it's a problem. It'd be far better to utilise an average network coverage map. I think we've made the right decision in not using operator maps and being independent of every single mobile network.

4:42But you've got 40 ,000 people out of a population of 60 million. He digs his heels in. He denies that it's a problem and he gets no investment. So sadly, I'm not going to invest today and say that I'm out. This is the norm. Most entrepreneurs believe so passionately in their own idea that they are very reluctant to admit when they're wrong and when they need help. But some entrepreneurs act differently. My name is Geoff Bowen. I have an award-winning organic vineyard near to Exeter in Devon. And I'm looking for£60 ,000 for 20 % of my new vineyard experience business, Pebble Bed Partner Vineyards.

5:22The problem with Geoff's pitch is that he struggles to explain how the Dragons will get a return on their investment. What's the maximum return I can get on that? In the first year at 20 % ownership you will get£7 ,000 return. How does that work? Our gross profit is£46 ,000, our net profits are£35 ,000, so 20 % of£35 ,000 is£7 ,000. So in year two I get nothing? From that existing land? In year three I get nothing, in year four I get nothing. How do I get my money back? Your money will come back because it's in the initial income. Sorry, how have I had my£60 ,000 back? Because people will have paid me, us,£190 ,000.

6:07You can take that investment straight back. You can't. You can't. You've spent it on everything. You've just told us what you spent it on. It's not going well, is it? But then something really, really interesting happens. One of the dragons, Duncan Bannatyne, tries to help the entrepreneur. He tries to help him explain the finances to other investors. And And rather than dig his heels in and say they're all wrong, this entrepreneur accepts his help. Stop nodding and saying yes, you do own it. I don't. I don't understand why they don't get it, Geoff. It's easy. I own 20%. Well, I don't, Duncan.

6:36It's easy. Can I explain it? Duncan, no, no. Well, we have an income. No, no, Geoff. No, Duncan, I'm not investing in you. I think you're 100 ,000 or something. What's the 60? Duncan, seriously, this is not... Duncan goes up and explains to the entrepreneur how to pitch the finances. You are going to have to go over and show him your numbers. Is that obvious? He says no no not obvious Duncan. I don't hear your explanation

7:02Nation on six thousand chance to 50 numbers I'm not looking to invest in you so I want to know from you Jeff how you think I'm gonna get my money back I've tried to explain it Jeff let me let me try it please look you're gonna have a total income of 190 ,000 pound with people who are buying the plot plus 60 from the investor. Yes. So you're going to have a total capital influx of£250 ,000. Yes. Is that correct? £190 ,000. £190 ,000, yep. Plus the 60 is£250 ,000. Yep. You're going to spend the developers at£144 ,000. Yes. So that leaves you£106 ,000 in the bank. Yes. And out of that, you're going to return the investor£60 ,000.

7:47Okay. I don't understand why you've got a problem with it. The entrepreneur accepts a bit of help. he doesn't dig his heels in, and he gets investment because of it. So I'm going to offer you£60 ,000 for 40%. All of the money for 40%.

8:05Duncan, I'd very much like to accept your offer. It seems like responding to negative feedback with an open mind could make you more likely to get a deal. But is that really the case? That's what Lesley decided to study.

8:19Leslie John: We got this data set of entrepreneurial pitches. And what we looked at was, let's measure when, among the times when there's pushback, what does the entrepreneur do? So the entrepreneur, we coded them as doing one or other things. One is digging their heels in and being like, no, no, no, I'm right. I'm right. Superstar, shark or dragon, you're wrong. Leslie wanted to know how entrepreneurs respond when challenged. Do they acknowledge the critique? Do they let it change their mind? Or do they confidently dismiss it? Well, it turns out the vast majority of entrepreneurs, in their study at least, dig their heels in.

8:5676 % dismiss any negative feedback and defend their own ideas outright. So the vast majority of entrepreneurs, they don't accept that there's anything wrong with their idea and they dig their heels in. However, Leslie also looked at the 24 % of entrepreneurs who do acknowledge their shortcomings. And she found that by acknowledging your shortcomings, you can benefit from a pretty incredible effect.

9:21Leslie John: The other approach was acknowledging, oh, I never thought of it that way. That's a really important point. Let me revise. Being responsive. And what we found is that although the entrepreneurs were far more likely to dig their heels in than to be responsive, the ones when they were responsive, they were far more likely. I can't, it's like something like seven times more likely to get funding or it's some giant effect. It is a giant effect. Those who acknowledged shortcomings were six times, not seven times, but six times more likely to get funding. In short, people who admitted weaknesses in their business plans were rewarded.

9:59Those who stubbornly defended bad ideas were not. The worst mistake you can make on Dragon's Den isn't to forget your lines or fudge your finances. It is that inability to accept when you might be wrong. I find that fascinating. But Leslie's book is full of many, many more great insights like this, including this study about crying at work.

10:22Leslie John: What Lizzie Bailey-Wolf and her colleagues did, they did this study where they wanted to see how are you perceived when you cry at work? And how might we mitigate negative perceptions? The main concern with crying at work, especially for women, super valid, is that if I'm seen crying at work, people will think I'm a spaz, They'll think I'm emotionally unregulated. They'll think I'm incompetent and so on. So they really might ruin my credibility. And so what she wondered is, well, okay, if you're going to cry, is there a way to kind of message, get ahead of the game and talk about it, present your crying in a way that's less damning?

11:01Leslie John: So what she had was she basically had people, if you are a participant in the study, you would give your rating of a person who was crying. So one person is crying at work. They're just basically crying. Another person, they're crying, but they're also saying, the reason why I'm crying is because I care so much about the work because I'm so passionate. Oh, and then there was critically a group that did not cry. So what she found was that, okay, for credibility in this context, it's better to not cry than to cry. All right. But if you are going to cry, it is way better to say why you're crying to link it to passion than to just cry without explaining or without giving a good explanation.

11:45To recap, Elizabeth Bailey-Wolf found that people perceive employees who cry at work, both males and females, as less competent than those who don't. But there was a caveat. Workers who attributed their tears to being emotionally invested in their work, well they were deemed as more competent than those who said they were simply feeling emotional. There are so many examples of this on the British TV series of Apprentice. Here's one contestant, she's called Joanna, and she's being reprimanded for her aggressiveness. Listen to how she responds. You've argued and clashed with quite a few of your team members, haven't you?

12:22Yeah. Don't get upset. Why are you getting upset? I just hate when it's brought up. I kind of started off on the wrong foot in this process and I think it's because I was too vocal and I've never been able to shake it. Anytime I give an opinion, it's always, oh, here she goes again. Joanna says, anytime I give an opinion, it's always, oh, here she goes again. She says she's seen as too vocal. She doesn't say, look, I'm getting upset because I really care about this job, this team and this competition. but Leslie says that's what she should have done.

12:58Leslie John: I guess the take home for me is like sometimes okay I try not to cry at work but sometimes I'm human and I have had some as I said spectacular crying episodes. I try to explain why I'm crying to show that there is still a logical part of my brain. All right it's time to take a quick break but don't go anywhere because when we're back Leslie will explain what happened when she convinced high-status leaders to reveal a flaw at work.

13:51which is how a small percentage of your efforts can drive the majority of your results. So go and listen to The Ross Simmons Show wherever you get your podcasts. Hello, welcome back. You're listening to Nudge with me, Phil Agnew, and my guest, the brilliant Harvard professor, Leslie John. Now, I'd like to share a secret with you, something that you might not know about me. Here's a secret. I'm an awful speller. I incorrectly spell even the most simple words. If you asked me to spell acknowledgement, I'd probably get the second letter wrong. I'm just rubbish at it. Always have been. Thank God for spell check.

14:28Anyway, it might seem a little odd for a podcast host to start the second half of an episode by revealing a weakness, but Leslie has studied what happens when someone reveals a weakness at work and her findings, well, they're rather surprising.

14:42Leslie John: Revealing weaknesses at work. We've done a bunch of work on this. And I think one thing you really have to be cognizant of is where you are in the status hierarchy. So when you are in a very high status role or situation more like it, because every day, you know, we move up and down the status hierarchy. If I'm talking to the dean, I'm lower status. If I'm talking to students, I'm higher status. So read the room and know where you are. And so when we are in a higher status position, like we're a leader talking to our team and we know our team respects us, that is when it can pay huge to reveal some of your weaknesses in addition to the normal stuff you'd reveal.

15:19Leslie John: So what we did in these studies is we had leaders talk to their teams. And in one version, they basically just, the leaders just do what leaders, what we often, our instinct is to do, which is to say why we're qualified to lead the team or some other platitudes. The other group said all of those things, plus we forced them to say something they were working on. So I'm working on my time management skills, or I'm working on my organizational skills, i.e. a weakness. Now, something you're working on, it's not like I'm pathologically messy. It's not like a super terrible extreme, but something you're working on, right?

15:57Leslie John: That's what I mean by a little sensitive. In one version of this study, Leslie asked a Google executive to record two versions of a short introductory video of himself. It was the kind of video that might be shown to a group of new hires. In one version, he revealed truthfully that he joined the company only after applying to 36 other roles and consequently receiving 35 other rejections. So he reveals a pretty big weakness. Then Leslie recruited 400 online participants, all of them full-time professionals. And she asked those participants to imagine that they had just signed on with a new company and were meeting one of the managers.

16:35Some of the participants saw the executive's introductory video with his failures included, while the others saw those failures edited out. That meant that Leslie could measure if specifically sharing a weakness actually changed the staff's perception of the Google executive.

16:53Leslie John: What we found was that when the group, the leaders that revealed a little something they were working on, their employees were more motivated to work for them and they trusted them more. Those who saw him talking about his failed applications were more motivated to work for him than those who saw the video without the disclosure. In other words, the leader who opened up was more inspiring to followers. And on top of that, there's also additional fascinating work by my colleagues at Wharton, Constantine Kudafaris and Adam Grant, where they looked at this question in the context of 360 feedback.

17:30Leslie John: And as a leader, you really need to get feedback, honest feedback from your employees to improve. But it's super hard to get people to feel comfortable telling you, the boss, what they really think. And so what do we normally do? We normally say, you can trust me, Ruth. I can take it. We know that that backfires. Instead, what they found is that when the leader says what they're working on, models that they can take it, shows that they can be trustworthy, then they get way more useful 360 feedback. Leslie conducted another study on revealing weaknesses. Here, participants who read about an executive who revealed that he was not so good at public speaking and that it even made him quite panicky were more inspired to work for him relative to another executive where no weakness was revealed.

18:19In all of the studies, the results are the same, really. Opening up about a weakness did not cause the participants to see the leaders as less competent. In fact, the would-be employees reported trusting the leaders more. But there is a catch.

18:33Leslie John: We do need to be careful. I should talk about the other side of this. When we're in a lower status situation, right? So suppose you're being interviewed for a job. It's riskier to talk about our weaknesses. But still, even then, there's fascinating research on how it can also be beneficial to be a little bit more real. And there I rely on work by my colleague at London Business School, Dan Cable, where they got audio transcripts from job interviews and they wanted to see how is the person's like authenticity or realness correlated with whether they get the job. And what they found is that among candidates who are qualified, you know, highly qualified, It was the ones that were a little bit more real in the interviews that were more likely to land the job.

19:16Leslie John: And what does it mean to be more real? Well, it means like not being scripted. It means when you get the question, what's your biggest weakness? Instead of saying, oh, I work too hard, saying something like, I'm working on my organizational skills. I, and I've actually developed some systems that helped me automate my organizational skills. I'll happy, I'm happy to teach them to the team if you'd like. Right. So it's saying something real, but also you can see the way I'm saying it is a strength frame, right? This study by Dan Cable and Celia Moore looked at what distinguished job candidates who actually received offers said in their interviews.

19:52Among the most qualified applicants, those who aimed to present themselves authentically were more likely to be seen as real, and those who were seen as real were more likely to be hired.

20:04Leslie John: I bring up this example to show that even when we're low in the totem pole, you can still get an edge, but you have to be really careful there. And if in doubt, one thing you can turn to, there's a helpful, now I'm thinking of Julianna Pillimer at NYU, who has this super helpful distinction between transparency and vulnerability. So vulnerability is like sharing mostly like feelings. Sharing feelings, especially negative ones, is inherently more sensitive than sharing what she calls transparency, which is cognitions, thought processes. So a cognition would be like, you know, if your boss says, I noticed that you're pretty quiet in meetings, which is kind of a criticism, although I don't think it should be.

20:47Leslie John: But anyways, I digress. If you are vulnerable, a vulnerable answer would be, yeah, I feel really anxious speaking in public. Don't do that. Instead, you can have a transparent answer that says, you know, the way my mind works is I like to really listen intently and collect my thoughts before speaking. Now, if you want me to speak off the cuff, I'm happy to, but this is just the way my mind works, right? So that's transparency. That's revealing in a really, I would say, baller way. So job candidates who honestly reveal real flaws get more callbacks. Leaders who highlight like weaknesses inspire more trust, and Dragon's Den entrepreneurs who admit weaknesses while they win investors over.

21:27Revealing can make you more persuasive, and that is exactly why Leslie wrote her book.

21:32Leslie John: As I said, writing the book was a deeply personal experience, and part of it was me reflecting on moments in my life and prompting others to reflect on moments in their life that were really cringy TMI, right? Like the time I told two grand poobas, senior academics, my most embarrassing story ever. You're welcome. It's in the book. You know, the next morning I woke up with such a disclosure hangover. I'm like, it was like I poured gasoline all over my body and lit a match. Career suicide. But then writing the book forced me to take a long view and be like, wait, yeah, that felt like TMI. And it certainly was negative in a sense, but there was redemption.

22:11Leslie John: And the redemption is much more important, which is that those two grand puvas, technical term, they became two of my closest mentors. And I know it's not in spite of the disclosure that we've talked about. They're like, yeah, when you were real like that and said that, we thought, oh, she's got good. So she's interesting. Right. And so I think so often we we treat TMI as the greatest social sin. But even when we go past the line, when we get to say a bit too much, there's often a redemption in that. Again and again, I keep finding the bigger problem, the bigger issue is the issue of too little information because it's when we don't reveal enough.

22:49Leslie John: You know, we miss, we get colleagues that don't quite trust us, friendships that never blossom, intimacy, romances that get stunted and so on. And that's stuff that I ultimately care a lot more about than the often kind of short-lived embarrassment of making someone cringe.

23:09massive massive thank you to leslie for coming on the show today and for the previous episode she did on nudge as well i really highly recommend checking out her book revealing as i said on the last episode it's not just got great studies about social psychology but she's also very honest in the book about her own work her life and her career so it really makes it a great read if you want to check it out there is a link to her book in the show notes but leslie wanted to share more about where you can go to find out about her work.

23:35Leslie John: You just go to my website, proflesliejohn.com. You can get the book there. You can also subscribe to updates. There's also some juicy quizzes. So another guilty pleasure of mine is I love BuzzFeed quizzes. And so I put some quizzes that are actually more scientifically based. And you can follow me, proflesliejohn, LinkedIn, Insta. There's links to all of those things in the show notes. Now, on today's show, we have covered a number of insights about human psychology. But of course, there are tons more insights about human psychology and I believe that these insights can be used to improve your marketing and to help I've spent the last eight years literally reading studies books and peer reviewed papers to find all of these insights which I believe reveal the science behind great marketing.

24:18I have documented them in my new product it's a database called the Nudge Vaults. The Nudge Vaults now contains over 600 insights into the science behind great marketing. It originally contained 450 but each month I add between 15 and 20 more insights to the vaults. So if you'd like to take a look at the Nudge Vaults you can go to nudgepodcast.com forward slash vaults there you will find videos explaining how it works you'll even get the chance to preview your first 50 insights for free. So if you're interested go to nudgepodcast.com forward slash vaults or click the link in today's show notes.

24:50That is all from me today thank you so much again to Leslie for joining me on today's episode of Nudge. I'll be back next Monday for another episode. Cheers.