Fred S 08 Jan 06

12. Call the Great One “Wayne Gretsky”.

Robert Scoble 09 Jan 06

Good stuff!

Lie #13: we don’t need a blog, we’re working on a Superbowl commerical!

Dave Morin 09 Jan 06

Brilliant!

Steven Clark (aka nortypig) 09 Jan 06

If ever I say any of this stuff you have permission to fly down to Tasmania and tan my bum with a dust pan!

Brad Martin 09 Jan 06

Humm, the company I work for has a blog and a Superbowl commercial, where does that leave us Scoble?

Common Sense 09 Jan 06

If you think this obvious crap is enlightning or even “brillant”, there’s no hope for you.

This is not meant to be spam or trollish, just stating the … obvious. Perhaps I’m just old, and heard it all before.

Rob Wilmshurst 09 Jan 06

If I was a VC I’d stay well away if I heard just one word of the above.
How can companies claim that ‘no-one is doing what we’re doing’ when they all say the off-the-shelf things…

Rob Wilmshurst 09 Jan 06

* that’d be when they all say the same things…

Oh and I’ve just noticed that ‘the deck’ link above the ad disappears on mouseover…

Jim Nuailo 09 Jan 06

Wow, people really said and say this crap? How come any startup has received any financing in the past?

This article is stating the obvious (to me, at least)…

Anyone who ever was saying or being told this crap without breaking into laughter needs to be shot.

Mark 09 Jan 06

You’d be suprised -

I’ve heard different versions of #1,2,3 & 5 more times than I care to remember. In fact, I heard number #2 just a couple of weeks ago when someone was talking to me about magnets, as used in healing.

“Health and wellness is a trillion dollar industry”, he said with all seriousness and excitement, as if he actually believed that he could capture even a miniscule portion of that market running around with some magnets and a briefcase and talking to aging baby boomers who are all about “holding on to their youth” these days, and nothing more.

It’s crazy. If you really want see / hear people spout off these type lies, go to a franchise show or home-based business show sometime, they are all over this crap.

Matt 09 Jan 06

Wow, you copied the whole entry and added a “Me too” after every line. Damn, these 37signals are cre-a-tive.

How about some opposition? Shurly you can’t agree with #8. You are the first I look to when I need an arrogant lecture about how stupid the big software companies are.

MH 09 Jan 06

Matt:

How about some opposition? Shurly you can�t agree with #8.

That’s what (these) comments are for. I presume the reason Jason made this post in the first place is because he found the list largely agreeable.

Re: big software companies, there’s a difference between “I think smaller is better” and “If you’re a small company, don’t write off the large companies.” If you think big companies are less efficient, that doesn’t mean they are TOTALLY inept.

Tim Almond 09 Jan 06

Matt,

I tend to agree with you.

Large companies are often too slow to respond, too arrogant of their size, or miss threats before they are already upon them. They are often trying to hold back the tide, instead of going with the flow, and accepting that change has occurred.

Mike McDerment 09 Jan 06

Hilarious.

Ivan Minic 09 Jan 06

Good one :)

Patrick Haney 09 Jan 06

The Wayne Gretzky/Ali examples are perfect. And I agree, people who spend time talking about how great they are almost always are not that great.

Thanks for the write-up, I got a good chuckle out of some of these.

Abhi 09 Jan 06

>> �Gartner says our market will be $50 billion in 2010.�

As a small company, there is limited bottom up research we can perform. We have to rely on external resources like Gartner and IDC to make certain projections.

Don’t VCs or any other rational set of people need numbers to quantify the potential return?

I may be extremely passionate, but if the market size of my product is limited, why would any one care?

How are projections like fortune telling? Projections are just that, predictions. Based on what we know today, this is likely to happen. Projections have to be updated regularly, based on new knowledge.
You can look at someone’s projections and understand the amount of effort they have put into understanding the product and the target market.

If someone uses 2002 data to make projections about handheld devices in 2010, that is inaccurate. Though, 2003 projections can be compared with 2005 actuals and you can see a trend and reasonably predict 2006/2007 numbers.

Thomas H. Ptacek 09 Jan 06

Regarding #8: it may be true that Oracle is fierce and hungry enough that simply appearing on their radar is a major risk. But in lots of areas —- especially mine (network security) —- OEM and acquisition is the primary way that the major players extend their product lines.

Calling Cisco “dumb and slow” is probably a mistake, but avoiding markets simply because Cisco might enter them is a mistake too.

Isn’t this basically the thesis behind The Innovator’s Dilemma?

Dan Ciruli 09 Jan 06

I have to agree with Abhi (although I love Guy’s blog and have enjoyed every post). If you are going into a VC and pitching something that *isn’t* going to be a huge market, they’re not interested.

VCs aren’t interested in businesses that will reach 1s or 10s of millions of dollars in revenue—they think bigger. They want to know that the potential is huge. I agree you shouldn’t spend half your presentation on it—and maybe specific numbers are too inaccurate to be relevant. But if you can’t convince them that it’s going to be a huge market, you can’t convince them to invest.

Mat 09 Jan 06

Kind of funny how everyone’s laughing about dumb entrepreneurs “saying the same things” - don’t see many bloggers doing the same thing do you?

Strikes me that the “blogosphere is full of far more me too rubbish than any group of entrepreneurs looking for funding.

pwb 09 Jan 06

Yep, I hear the above all the time, too. If you think it’s common sense or obvious, you haven’t spent much time with (m)any wanna-be entrepreneurs.

Jason Kunesh 09 Jan 06

Being someone who’s just starting this process for my own biz, but having been a consultant on the design/IT side for many other startups, Guy’s post and Jason’s comments are both dead-on. Projections are like plans during war: they’re the first thing tossed out the door when you hit the ground running. I’ve seen lots of the Gartner numbers-based spiel as well as lots of re-tooling of the business model to cast reality in a very rose-colored hue.

When I was in a band, we would pass out a ton of tickets for people to see our show and say the same lame thing: If we can get 1% of the people we give these tickets to to show up… But they never do. Why? It’s not the great value or the free show ticket, it’s the great experience shared by a friend or colleague that lifts your product, be it art, music, or technology. Aiming for 1% of a market is like pissing in the wind.

That is why basecamp is an inspiration to me and my team: the free version of the software encourages word of mouth and socialization of the product, not the forced kind of mindshare that traditional marketing brings to products made by people who do things like quote Gartner to VCs.

Herme Garcia 09 Jan 06

Lie #14 : We are going to burn your cash losing money on our core product, but advertising (AKA AdSense) will pay the bills.

Lie #14 (v2.0) : We are going to burn your cash losing money on our core product, but a user is valorated to Zillions USD per customer, so we will go public and made a fortune !!!

Harry Lambert 09 Jan 06

One more-for when you decide to make it an even dozen:
“The proceeds from this financing will be sufficient to take us to liquidity”.

Anonymous guy 09 Jan 06

My start-up’s management uses about 6 of those 10 when talking to any potential partner or investor. (Draw your own conclusions about our success).

shashark 10 Jan 06

How about Top 10 VC lies ?

Dennis Howlett 10 Jan 06

#11 made me wince. I said that recently…I need to revisit - quickly!

Paul Youlten 10 Jan 06

If you really want to get VCs excited - I’d recommend setting up a not-for-profit organisation in a competitive market place. It goes against everything VCs think they know and understand about business fundamentals. Ironically because they can’t buy it, they assume it must be hugely valuable.

Kenneth 10 Jan 06

I love what 37signals does, usually, but what’s the value-add in simply reposting Guy’s blog? Where’s the win-win? The synergy? How is this Web2.0?

Ted Demopoulos 10 Jan 06

Yes, people really do say these things. All the time. I’ve heard them over and over. Especially from bozos I’ve worked with.

Sometimes they might even be true! But who cares, they sound horrible.

“This time is different” might occasionally be true also, but don’t count on it!

Bert Armijo 10 Jan 06

You don’t end up talking this way because you intend to. It’s the training process of making 50 or more VC presentations to fund every round. If you don’t head-off the typical first round questions you can’t spend any time covering what you think is really important.

Sorry Guy, but you VCs get what you pay for!

Dave 10 Jan 06

No, VCs don’t need projections. If you can project it with any reality, then you are not creating a market, you are wallowing in one created by someone else. If Gartner even knows the name of the market, don’t go there. You can’t project a discontinuous/radical market. Don’t try.

VCs invest in all the deals doing the same thing. It is OK that five other companies are doing the same thing. What they are doing is working towards creating a market, a category. By investing in all of them, you don’t have to guess which one will come out on top. If there are six of you, two lose money, two break even, two make money, and one of the ones making money makes 74% more than the second one. That one pays for the rest with a nice return to boot.

VCs pay for a deal that promises to pay back the investment. It’s about a deal, not a technology, not a concept, not a team. Focus on the deal.

And, focus on the hardest thing of all, getting that first client.

GMars 11 Jan 06

Well, I guess you are telling me to QUIT NOW!
Am I to believe that all the time, research, diligence, effort, experience, work, sacrifice, money, creative thought, analysis, sleepless nights, and pure passion my team and I have poured into our start-up venture are viewed by the venture community as merely hyperbole and inflated projections? I have never encountered such a concentration of arrogance.
Not every start-up is two guys in a garage with a dog, a Power Point deck and a set of projections.
Sure entrepreneurs exaggerate, but how the else can one stand out from the extraordinarily crowded field of start-ups seeking funding. I am relatively new to the process of seeking venture funding, and YES we have stated some variation of a few of the claims considered LIES by Guy and the others.

BUT we can PROVE our claims and we can back them up with EVIDENCE!

As an entrepreneur, all I am looking for is a qualified audience for our pitch. It has been my experience that getting a QUALIFIED audience is the biggest hurdle.
You can tell us we are full of s**t (which I am certain will not be the case), after you have heard our pitch and done some due diligence.
If you do not believe our business proposition is viable after you have invested the time to hear our pitch, that is your prerogative. You have the money.
We only have the idea and the research to back it up.

Let�s face it. A pitch is exactly that a PITCH.
You know it and we know it.
Think of it as a commercial. Does a Gillete Sensor razor really work as advertised?
Can the Jeep that drives effortlessly through the Alaskan Tundra really do that?
What percentage of people REALLY found their soul-mate on eHarmony.com?
Do you think that I Can�t Believe It�s Not Butter REALLY tastes like butter?
Come on guys, keep it in perspective.
What sales process is completely honest? Tell me?
IT IS YOUR JOB to separate the wheat from the chaff.

Kathleen Fasanella 11 Jan 06

This post inspired me to write my own post entitled, Top 10 Lies of Designer-Entrepreneurs (I blog on fashion manufacturing) because I run into this same stuff, over and over and over and over again. In this context, it’s amazing how much software and apparel have in common.

Doug D. 12 Jan 06

I’ve been up and down the road of the VC-seeking entrepeneur. Raised a few million, spent five years killing myself to make it work, eventually sold out for far less than the investment and went to work for the acquirer. Lost a TON of personal money on the whole ordeal.

Reading this list was funny because it is so totally true. However, if you don’t tell these lies, you have no presentation. What do you expect?:

“Hi, I’m Doug. I think this idea is really cool. Give me ten million dollars please. I promise to try hard to succeed.”

You want to look clueless? Try saying some variation of this truth-driven, spoken-from-the-heart presentation. Good luck.

I promise every VC will quickly show you the door AND they will give you friendly advice on how to improve your pitch — every suggestion will advise you to start including the aforementioned “lies”.

I very quickly learned that getting VC is a GAME. Pure and simple. A silly game akin to grade school popularity contests. But, if you don’t learn to play it, you can’t get your business off the ground.

It’s a vicious circle. It’s like a paraphrase of a quote from the Robert Redford movie “The Candidate”: “We have to tell these lies to get you elected. Once you’re elected, you can do wonderful things in office. But, you have to get elected first.”

What I think is hilarious is that if you go back 6-7 years, Guy Kawasaki was telling all of us to tell these lies that he frowns upon now. I don’t have any exact quotes, but I read a lot of his stuff back when we were getting funded. He was one of my biggest influences in how to play The Game. I told every “lie” in the book. However, at the time, I had no idea I was “lying”. I was just playing by my perception of the rules.

Any of you out there that think you can wrench money out of some tight-assed VC without telling these lies, you are kidding yourself. Go out there and get on the VC treadmill for a while and let me see your pitch slides. I guarantee they will be filled with these “lies”. Anyone who says different has either made enough money to be condescending about it (like Guy) or has never actually thrown their hat in the ring and tried to start a VC-funded business. Just a bunch of armchair quarterbacks who have no clue of the BS you have to deal with in raising startup money.

Don’t get me wrong. I hated The Game and the “lies”. It’s really silly if you step outside and look at it. But, I completely disagree with Guy or anyone else who gives you the impression that you have the option to NOT tell these lies.

Feel free to put together a heartfelt, truthful pitch if you just want see what reaction you get from the VC community. But, don’t do it if you have any intention of raising real money.

Doug D. 12 Jan 06

By the way, to be fair to Guy Kawasaki — He didn’t actually tell us to stop lying - he just asked us to come up with new ones.

Todd M. 15 Jan 06

I founded a software business 12 years ago and did the VC dance, though once we finally got to the point of a final contract we were (luckily) snatched away at the last minute by a software behemoth-in-training.

Our first few times through the gauntlet, we didn’t include stuff like the Gartner projections. Invariably, we had some VC guy asking, “what are the respected market projections?” He wouldn’t actually care very much about the numbers themmselves, but it was a clear message that we were marked as n00bs with them.

The way I look at it is this: the “lies” are like wearing a suit instead of a tie-dye to a presentation. You include them not because they’re valuable in their own right, but because you’re demonstrating that you’re clueful enough to know you need to know them. They’re check boxes, nothing more or less.

vinod menon 15 Jan 06

good one must read for small/medium companies

Fred 17 Jan 06

Guy’s blog is the same old VC BS blog. Nothing new.

Artist 20 Jan 06

This was sent to me by my startup partner as a joke. Funny enough it makes me laugh. What’s even more funny is that we are currently trying to raise some serious cash, doing many of the points listed.

But the reasoning behind that, is mainly what Todd M. points out. Many of those points need to be there, so that VC can feel comfortable and don’t need to try and ask smart, deep questions about something they dont know as well as you, while scared to look stupid. If we really look at this, going trough some of those “must have” check points, only takes few minutes and gives VC a feel that we have read and understood their own BS.

Even more funny - I have lived trough highs and lows of tech business and in one time I was pitching VC and later VC’s were pitching me with their BS. Now again its my turn - It really is a game, and a fun game that is, even that sometimes you really do want to just cry…

One weird thing is that many expect that VC’s are all really smart - Doh!, they dont know it all and they do make wrong choices as well - they’re just human too. We are all playing and arguing of one thing that is unknown to us all - FUTURE!

I guess the goal is to make both sides to believe in the same unknown future.

I have actually heard a VC to say “this fits us too well, that’s why we cant invest” after that, I will never be suppriced again of anything I will hear from them ever again….

Gaylord 04 Apr 06

Why just repeat what the original blogger has already said? There’s no added value to these comments… and if there is, it’s not upfront enough to catch by most web surfers.

Or is that Jason’s subtle way of making his point about entrepreneurs?

MasterYoda 07 May 06

I think that what’s really dangerous for startup-ers is when they’re telling these “lies” to themselves.

If you’re aware that, in order to make enough money foy yur business, you have to lie about the future of its market, then why insist on it? It could be that (a) you’re a crazy man, willing to taste extreme poverty, and lead a simpler life, or (b) you actually believe that the future might turn out to be just as good for your business as the present numbers show. That’s a core part of the entrepreneurship, and VCs are supposed to be well aware of that.

The only important thing about the Gartner optimistic projections is to show that they’re NOT telling that it will be a waste of money. Still, it might be if you do the wrong thing.

Damn it! They can’t base their approval on the projections, but they might base their denial on that.

Phoenix 10 Jun 06

Well, hello all you MEN out there, do not know how I ended up here, the old Link, Link, Link game, but I have decided to leave a message, although there is absolutely nothing being said here that is worth my time, I just wanted to say that I speak for many “consumers” when I tell you that WE ARE SICK of ADS, the game is “RIGGED”, the system is corrupt, forever, and please re-read how Rome fell…it seems that scrambling for the mighty dollar has made it acceptable for the LUNATICS to run THIS ASYLUM, called the CAPITALIST way—the way of FREEDOM, the way of TRUTH, DEMOCRACY..ha. What is “democracy”? Ask youselves: I believe it has morphed into the current gobbledygook it is: ENRON, MICHAEL MILKEN (or Miliken depending on which version is being used) and it is being able to justify your own reasons for becoming befeft of the feelings of empathy or compassion. Just look at all those words up there, and imagine, a human being—a descendant of the great Celtic Tribes and the Lakota Sioux—a person who thinks all that we do and say has some sort of “ripple effect”, and littering on our shared land is a sign of selfishness and ignorance…a human being who does not believe in “separation due to class”, as we all die someday—can you imagine what a person would think, when reading these comments on how to approach funding for an idea, when the giant VC funders are of the criminal ilk? They are the Carlyle Group, and I would rather starve on the street than take one penny from them, as the ripple effect will travel to shadows that will be eventually burned upon the sidewalks, and the buildings, in their form of mutual destruction. The money you may get from such a company, will make them more money, and the real people are ready to buy what ever it is the smaller companies are selling, and going PUBLIC is a big lie, THE BIGGEST LIE OF ALL! You will be just like the other good things, started by the true creatives, and be taken over hostiley by the powers that be, and they in turn, will destroy what it is you created..there is a change in the air, I am one who knows, and I am giving you a big hint here. If one of you has a speck of soul left after your long journies of attempting to comply to the current methodologies used to steal from you, as in Doug’s case, then you will all coalesce into one entity yourselves, and offer your own ideas to the people, the people are tired of this STOCK MARKET game, where one can split stocks, sell them to each other at a penny a piece, file some papers, offer them up at $12-15 a share initially, sell their own shares that they purchased just a couple days prior at a penny a piece, make their big profits at the initial asking price, and buy more, and drive it up, up, up, and all while making sure they own the major portion of shares, so voting by the ‘share holders’, ie, the ‘little guys’, will not affect any decisions they care to make one iota, and then use this false ‘capital’ to get loans from banks, and spin off umpteen subsidiaries, and then ‘sorry’, we can’t repay the loan’, and shell-game after shell-game is played, and meanwhile, the ripple effect is turning into tidal waves, and hence ENRON and also others, but that is as good as example as any..so why would anyone creative care to be involved in any of this? It is because you are all part of the “group think” mentality, measured out to you in big ladlefulls of swill, and no one will win but the ones who started this game after Lincoln was killed…the 40th congress lives on..this is not just a diatribe of words, gentlemen, it is the chance for you to re-think your own goals, and to investigate further…if you want to be a part of life, one must live now, and stop planning for the “when I get this idea off of the ground” all will be better…this IS the better…it is a matter of which culture you choose to believe in..the criminal one that this country supports, or the human one that is deep within all of you? I hope one of you realizes that I am respectfully serious, but am compelled by something to say these things, and yet I do not know why…but, I must get back to tending my own garden, literally, and making sure the butterfly bush I planted will draw the butterflies, and not the yellow jackets, and I think you know what I mean, all being intelligent men…thank you for this opportunity to speak of truths, and humanness…sincerely, Phoenix

Takerra 02 Jul 06

I understand what everyone is saying and speaking here,but what about the people/mothers out here that has came up with money making ideas and are lacking the funding to further along the product and have to go to vcs.I feel that NO-I believe my visions and future successes ,no matter who I have to talk to to get the funding needed for my company comes from God.I know that corruption lies in stock markets,congress,every where,but thats the reason we are to pray in everything we do and for God to put the contacts we need in our paths.No matter what we do there is always going to be turndowns and nos,but that could be that,that situation was not for you,which leads you to the next door and the door that opens was the door that was intended for you to walk through,so we can’t lie to get what we want as some enterpenuers do, my adivce is to be real speak in truth and do your research on everything as far as patents(which are good to protect your particular invention)but there will always be competition (which is good to keep you on you p&qs)and speak from the passion that brought you to the point of sitting in front of Vcs anyway.I feel that if VCs or anyone sees how passionate your are about something.then that secures the thought of investing,because they know that you are going to do eveything in your power and beyond to be successful.
Thanks for letting me share my thoughts.

Justin J 29 Aug 06

If you are going to allude to a sports star or other famous person make sure you know what you are talking about. It’s “Wayne Grezky” buddy (re #12).

I guess you could generalize this to ‘Pay attention to your spelling and grammar’.

Classified 01 Oct 06

Thank you……
Guy�s blog is the same old VC BS blog. Nothing new.

Classified 01 Oct 06

Thank you……
Guy�s blog is the same old VC BS blog. Nothing new.

mail 05 Oct 06

Happy! In Love !!!

people 05 Oct 06

Wow, people really said and say this crap? How come any startup has received any financing in the past?

This article is stating the obvious (to me, at least)�

Anyone who ever was saying or being told this crap without breaking into laughter needs to be shot.

news 05 Oct 06

Well, hello all you MEN out there, do not know how I ended up here, the old Link, Link, Link game, but I have decided to leave a message, although there is absolutely nothing being said here that is worth my time, I just wanted to say that I speak for many �consumers� when I tell you that WE ARE SICK of ADS, the game is �RIGGED�, the system is corrupt, forever, and please re-read how Rome fell�it seems that scrambling for the mighty dollar has made it acceptable for the LUNATICS to run THIS ASYLUM, called the CAPITALIST way�the way of FREEDOM, the way of TRUTH, DEMOCRACY..ha. What is �democracy�? Ask youselves: I believe it has morphed into the current gobbledygook it is: ENRON, MICHAEL MILKEN (or Miliken depending on which version is being used) and it is being able to justify your own reasons for becoming befeft of the feelings of empathy or compassion. Just look at all those words up there, and imagine, a human being�a descendant of the great Celtic Tribes and the Lakota Sioux�a person who thinks all that we do and say has some sort of �ripple effect�, and littering on our shared land is a sign of selfishness and ignorance�a human being who does not believe in �separation due to class�, as we all die someday�can you imagine what a person would think, when reading these comments on how to approach funding for an idea, when the giant VC funders are of the criminal ilk? They are the Carlyle Group, and I would rather starve on the street than take one penny from them, as the ripple effect will travel to shadows that will be eventually burned upon the sidewalks, and the buildings, in their form of mutual destruction. The money you may get from such a company, will make them more money, and the real people are ready to buy what ever it is the smaller companies are selling, and going PUBLIC is a big lie, THE BIGGEST LIE OF ALL! You will be just like the other good things, started by the true creatives, and be taken over hostiley by the powers that be, and they in turn, will destroy what it is you created..