Demonstrating your Startup's Social Proof
Angels, VC’s, and strangers who wish to take part in crowdfunding your company are much more likely to believe in your ability to deliver if you already have a successful company or an exit behind you. But how do you break into the funding market for the first time? Especially if you don’t have a referral from a high profile investor? The answer is to prove your intellect, trustworthiness, and work ethic through Social Proof.
Social proof can be crudely defined as saying, “Well, I know that guy’s not an idiot,” or, “hey, they all cant be idiots.” We use this to make decisions every day based on the size of the crowd or the authority of the person giving the review. For example, we take note if 6000 people give a book on Amazon a five-star rating, just as we take note similarly when we hear the book reviewer of the New York Times gives a book a top rating. But what does that mean for your startup on Venture Bonsai?
Demonstrating your personal Social Proof
Chances are, you’ve got a lot of social proof already out there by adding up the little stuff. LinkedIn have positioned themselves as the go-to for your professional social proof by allowing anyone to casually glance at who you are, who you know, and what you’ve done in the past. You should link to your LinkedIn profile in your Venture Bonsai profile to allow your investors (or who you’re investing in) to see more about you.
You should also link to other relavent information in your Venture Bonsai profile, like links to your Crunchbase profiles and links to past projects. Other simple things, like a link to your twitter account can also help people figure you out. On Venture Bonsai, also take advantage of the “trust” features on people’s profiles so you can see who you trust, and who trusts you.
If you’re searching for someone’s “influence”, you can check out a service called Klout. Their one-number metric of social influence is based on the number of twitter connections, LinkedIn, and Facebook followers, as well as the social interactions on these people. Is this the deciding metric of social proof? No, but at least it’s a number.
Demonstrating your Company’s Social Proof
Companies take a slightly different route for demonstrating Social Proof. For example, on your Venture Bonsai Company Overview page you should link to any press or blog posts that have covered your company. On the same note, it’s also helpful to show the feedback you’ve gotten on your product by its users.
If you have any lead investors you should show them off! Angel investors are more much willing to invest in a project they don’t know much about if another Angel they trust is on board. Has an investor already vetted your company? Let people know!
Adding your teammates to your company’s Venture Bonsai profile also says a great deal about your startup’s worthiness because investors take note of the opportunity cost of the people involved. For example, it says something about the strength of your company’s vision if you are working with a few people who could easily be engineers at Fortune 500 company, rather than working independently on their own vision.
Create new Social Proof
The easiest shortcut you can take to create new social proof is to complete a Company Health Check through a lawyer. In the health check the lawyer will go through your founding documents, and other official paperwork to be sure everything is in order. We have a great questionnaire for your lawyer to use (just email us), and once it’s completed you can display that thing like a badge of honor.
Another great way to create new social proof within our community is to invite investors or other entrepreneurs to use your service and later ask for a review or feedback. Quality reviews from a trusted community can easily get you the social proof where people think “hey, they all can’t be idiots”. And I suppose that’s all we can ask for from social proof, right?
And to create new connections who can vouch for you, one concept I really like are the “CEO Office Hours” popularized by Jason Fried of 37signals. The basic concept is to make yourself easily accessible by announcing a certain time range you are available to talk to anyone. Posting this information to the Venture Bonsai dashboard makes a great way to publicize your availibility, and easy ways to connect could be anything from a phone number, Skype account, or google+ account (where now you can video chat with up to 10 people using “Hangouts”). These personal meetings build trust with other entrepreneurs and investors, which may help you get investors, referrals to other investors, and build the relationships needed to grow your social proof.