Second best answer to yes is no

I’ve seen this theme come up recently a lot in talks with entrepreneurs trying to raise money, or trying to sell their product. A ton of time is spent working with the investor or possible client, and the discussion ends up going nowhere. Cycles are lost, people are rejected without knowing why, and everyone gets frustrated.

I’m a big believer in honesty about what I’m thinking and feeling, and that includes saying no. In any discussion, the second best answer to yes is NO. Silence is the worst thing you could ever do to someone. I’m not sure why people feel the need to go silent when they really want to say no. Is it that we as a culture like to avoid conflict? We don’t like to let people down or disappoint? What is it about that two letter word that is so scary?

I say that as investors, parents, friends, colleagues, bosses, whatever your role, we all practice saying no – but give reasons why. It’s no fun to be rejected, but at least when armed with the reasons why, we can improve our pitch, product, stance, opinion, whatever the question. In this scenario we all win. The askee isn’t continually bugged with a proposition, the asker can improve the ask and simultaneously move on quickly to other prospects. It saves time, frustration, and feelings.

Don’t be afraid of saying no. But do so with support and information, and we all win.

Never cross a stream with an average depth of 4 ft…

I was sitting at the table with investors interested in putting some capital into one of the companies with which I’m working.  The questions were around assumptions – are the assumptions you’re making in the business sound?  What happens if they’re wrong?

And the answer by the entrepreneur (okay, Lu Cordova), was fabulous.  “Never cross a stream with an average depth of 4 ft, it’s the variance that will kill you.”

What she meant by this is understand your variances, understand the best and worse case scenarios of all critical factors to your company.  I know you believe you’ll do $75 M in revenue in year 2, but what happens if you don’t?  What happens if you don’t close this round of funding?  What happens if the CEO you hired turns out to be a schmuck?  Run your model with the most plausible scenario, then the best case, then the worst case – and see what happens.  If you can stay afloat in a worse case scenario, you do well both in business and with fundraising.

Know your variances – it will keep you from drowning.  Great lesson by Lu.

If you can’t make a decision, you need better options

Yet another insightful Luism by my favorite strategist and dear friend, Lu Cordova.

She was releating a story about how she needed to hire a VP for her last company. She had narrowed it down to two options, but really couldn’t decide between them. She brought in a consultant, she had them interview with the board, she interviewed them again, she spent a day with each, she completed her extended due dilligence and she still couldn’t decide.

And that’s when it hit her – she couldn’t decide because both of them were wrong. So she scrapped her search and started over.

I find this is critical insight. Every single time I have found myself at a place where I can’t make a key decision – if I force a decision, it has WITHOUT FAIL ended up wrong. If I scrap the options and start from scratch – WITHOUT FAIL I have ended up behind schedule, but with more than I could have ever hoped for.

So remember that. Don’t relegate yourself to the options that are thrown at you. If you can’t decide, it’s because all your options are wrong and you’re looking in the wrong place.

Thank you Lu!

Park your car at a consignment shop…

So my husband and I are off for a 3 month sabbatical to South America, and are having a difficult time deciding where to leave our cars for 3 months. We’ve got house sitters, so our driveway is out of the question. We want our cars periodically started to keep them alive, and maybe even somehow protected from the elements.  But we don’t know anyone with an extra 2 spaces in their garage, and the street in front of our house isn’t very long, prohibiting others (like our tenants!) from parking there.

Lu – “You should put your car for sale at one of those consignment shops, but put a high price tag on it.”

Me – Brilliant. So if it sells, then I’d be getting more than I would otherwise get for the car. FABULOUS. And if it doesn’t, well then someone has been washing it, keeping an eye on it and caring for it while I’m gone. For free.

Damn, why didn’t I think of that?