He told Disney execs why they shouldn’t buy his company. They still bought it for $40m.

Image credit: Rufus Griscom.

Rufus Griscom, the founder of online parenting magazine and blog network Babble, faced trouble at his board meetings. He told board members about what was going right with the company, but got skeptical responses in return.

So for the next board meeting, he changed tack. He started off by discussing all that went wrong in the firm. This had a positive effect. Instead of questioning Rufus’ every move, the focus shifted to problem solving.

Rufus had an idea: what if he pitched to investors this way too? So he added a slide to his investor deck listing the top five reasons not to fund his startup.

It worked: he raised US$3.3 million in 2009, at a time when fundraising was hard due to the Great Recession.

Unbridled optimism comes across as salesmanship; it seems dishonest somehow.

If something works, do it again and again. That’s what he did. Two years later, he tried to sell his company to Disney. He included a slide which read, “Here’s why you should not buy Babble.”

He talked about how user engagement was lower than expected, and how the backend was dated. He sold the company for US$40 million, and ran Disney’s interactive media division for two years.

“Unbridled optimism comes across as salesmanship; it seems dishonest somehow,” he says.

Rufus narrated his journey in the book Originals: How non-conformists move the world by Adam Grant, which I described in a review as a “bible for changing the world.”

While unconventional methods often fail us, several factors led to Rufus’ success. Here are some reasons why his tactic works well with a skeptical audience:

1. Revealing flaws makes you seem smarter.

An experiment found that expressing skepticism about an idea makes you seem more intelligent. Book reviews that were written in a scathing tone were judged by subjects in the study as more intelligent. On the flip side, flattering reviews were perceived negatively.

“Merely changing a handful of words from positive to negative […] was sufficient to make the critical reviewer sound smarter,” writes Adam.

2. Revealing flaws makes you seem honest.

He then cites a study which showed how we tend to put up mental shields when someone tries to persuade us. The more enthusiastic the person, the more skeptical we become.

3. Revealing flaws makes people judge your idea more favorably.