Redeye VC

Josh Kopelman

Managing Director of First Round Capital.

espite being coastally challenged (currently living in Philadelphia), Josh has been an active entrepreneur and investor in the Internet industry since its commercialization. In 1992, while he was a student at the Wharton School of the University of Pennsylvania, Josh co-founded Infonautics Corporation – an Internet information company. In 1996, Infonautics went public on the NASDAQ stock exchange.

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How to "Ask for the Order"

Sign I just read Fred Wilson's blog post about the need to ask for the order.  I completely agree -- if you don't ask, you don't get. 

However, I believe that there are different ways to ask for the same order.  And the way that you ask can either increase or decrease the odds of a successful outcome.  Some examples:

Before we launched, we knew that we needed to have a lot of  inventory on the site -- so we reached out to dozens of used bookstores, CD stores and video shops.  We had a team of three business development people working full-time to get these sellers to agree to list on our site.  Initially, we would call a prospective seller, explain our site/model, and if they were interested, we'd "ask for the order" and send them our standard three-page seller agreement.  Despite our best efforts, we found that small retailers were either intimidated by our agreement or didn't want to spend the money to have a lawyer review it. More than 60% of the interested sellers would drop out of the process before they signed the agreement.

We then made a slight change.  Instead of sending them a three-page legal agreement to physically sign, we added a click-wrap agreement to our site.  We then asked the sellers to register online, and during registration we simply asked the seller to agree to our terms of service by clicking a box.  Instantly, we eliminated our biggest challenge in getting sellers on board.  Because in this case, users are far more willing to agree to terms on a website than they are to sign a three-page contract.  We didn't change what we asked for -- we just changed the way we asked for it.

One of my portfolio companies recently experienced the same thing.  They were talking with a variety of prospects about a big advertising deal.  And initially my company was sending out an "Advertising Partnership Agreement" -- outlining the full terms of the relationship.  They quickly learned that all  non-standard agreements had to go to legal -- which added weeks/months to the process. 

So the company decided to try a change.  Instead of sending over a custom agreement, they sent over benign looking  "Ad Insertion Agreement" which had the exact same terms of our prior agreement.  Our marketing contact had full authority to sign an ad insertion agreement -- they do that all day long -- and now my company is able to get deals signed much faster by changing the format of our "ask".

The list continues.  When TurnTide wanted to send out a free evaluation unit of their anti-spam router, they originally had a long written agreement.  When they changed the format of their agreement to a one-page trial acceptance form, they cut weeks off their sales cycle. 

Say you work at Google and you want to get a prospective partner to sign an NDA.  You can send someone your NDA document and it goes to their lawyer.  There will probably be a bunch of back-and-forth on the terms.  That's pretty time consuming.  However, why not do it the easy way?  Just invite the guy over to lunch on Google's campus. 

Because whenever anyone gets a visitor badge at Google they are asked to sign an NDA as part of their visitor badge process.   I'm sure glad everyone brings a lawyer to help them sign-in at reception ;-)

The way you ask is just as important as asking.  If you focus on reducing friction in a transaction -- and ask for the order in the right way -- you might find that you improve both your odds of success and the time needed to get a deal done...