Top Ten Lies of Entrepreneurs: Guy gets it right 08 Jan 2006
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I obviously don’t get pitched for investment by other entrepreneurs, so I don’t know what lies are being told, but I’ll tack on some of my own “at face value” comments to the top ten (actually 11):
“Our projections are conservative.” Like Guy says, an entrepreneur has no idea what her sales will be. Projections, like fortune telling, are a waste of time.
“Gartner says our market will be $50 billion in 2010.” 1. Who cares what Gartner says — Gartner isn’t giving you any of that $50 billion. 2. If you have a slide like this in your deck, 1: get rid of it, and 2: get rid of your deck. Talk from passion, not from slides.
“Boeing is going to sign our purchase order next week.” I love this one. My advice: Never bet your business on one customer. Ever. Never give preferential treatment either. Every customer outta be the same to you or you’re going to start favoring the minority instead of the majority.
“Key employees are set to join us as soon as we get funded.” If you’re small (and you probably are if you’re pitching VCs), everyone should be a key employee. To say your key employees aren’t on board yet is to denigrate everyone you already have and that’s no way to build a passionate team. Further more, it’s an empty promise. You can’t control other offers other people may also have while waiting for your precious funding to come though.
“No one is doing what we’re doing.” It’s exceedingly rare that you’re 1. the only person whose thought of that, and 2. the only person doing something about it. It’s possible you are, but highly unlikely. Don’t bank on it. Like Guy says, “As a rule of thumb, if you have a good idea, five companies are going the same thing. If you have a great idea, fifteen companies are doing the same thing.”
“No one can do what we’re doing.” Amen. Face it: technology is a commodity these days. If you can do it, someone else can do it. And it’s likely they can do it better. What really makes the difference is design, copywriting, execution, clarity, passion, and the overall customer experience. The stuff you can’t specifically define or bulletpoint are the things that matter.
“Hurry because several other venture capital firms are interested.” If you cry wolf you better be ready to rescue yourself.
“Oracle is too big/dumb/slow to be a threat.” Fear and fire are good things when it comes to being an entrepreneur. If you don’t think you can be beat by the big guys you better think again. Yes, they’re slower, but they may be slow enough to watch what you’re doing, learn from your mistakes, and then clobber you down the road. I still think small has major advantages in the world of the web app, but you better be humble if you want to play this game.
“We have a proven management team.ā€¯ Guy says this one best: “If the entrepreneur were that proven, that he (a) probably wouldn’t have to ask for money; (b) wouldn’t be claiming that he’s proven. (Do you think Wayne Gretzky went around saying, “I am a good hockey player”?)” Point here is that most of the people who have to tell others about their greatness usually aren’t so great (except for Muhammad Ali, of course). The way to demonstrate greatness is to prove it today, not to point to the past.
“Patents make our product defensible.” I don’t know anything about this so I’ll be quiet.
“All we have to do is get 1% of the market.” If your goal is to get just 1% of the market then you don’t have the fire necessary to get 2%. There’s nothing closer to nothing than 1.