Hiten Shah tonight sent out an interesting tweet, “The more you know, the more you no.” Interestingly enough, Matt Henrick riffed back, “the less you know, the more you will try.” My brain went in a different direction: how experience teaches you what not to do. I thought it would be fun to talk about some great no’s in a startup.
No, we’re not going to do that
A startup has limited resources, so focus is paramount. Your decisions for what *not* to do are as important as what *to do*. “No” means less feature creep, less consumer confusion, more team productivity, more focused commitment to a central mission, and better allocation of cash resources. That’s why I loved Matt Blumberg’s quarterly stop/start/continue reviews. It’s why Caterina Fake blogged about working on the right thing. It’s fun and easy to dream up a million features, but that will kill you.
No, we’re not going to buy your product
This one sucks, but it’s better than a non-committal answer which wastes your time. During customer development, a “no” can save you from building the wrong product or targeting the wrong demographic. In enterprise sales, a concrete no from a prospect allows you to focus your resources on better opportunities. However in both this example and the one below, “no” might end the sales effort but do not let it end the relationship. The head of sales at my last company was fabulous at keeping in touch with those who said no. Periodically, she would give them updates and try to add value. Those no’s would sometimes convert to yes, or refer great new prospects who were a better fit.
No, we’re not going to invest
The next best thing to a clear yes from a VC is a clear no. Many VCs hate to say no. I’d guess it’s partly because they never like to burn a bridge, partly because they don’t want to bother explaining why not, and partly because if things radically change (the cynic would say, another VC wants to do the deal), they might end up wanting in after all. Unfortunately, you can waste huge amounts of time trying to document X or model out Y. No entrepreneur trying to raise capital wants to hear no, but as with customer prospects, the string-along “maybe” is a resource killer. Unfortunately it can be hard to judge when you are dealing with serious requests or delays and need to keep chasing the deal, and when you should just cut your losses. Entrepreneurs are not known for giving up easily.
No, we’re not going to hire him/her
If you are lucky enough to have the problem of rapidly scaling your business, the pressure to hire becomes very intense. People are stretched thin, possibly risking burnout, and you just need more bodies! Famous last words. It’s not as easy as it sounds to hire and quickly fire if it’s not a clear cut case. Once you hire someone, you’re expected to give them a chance. Once they aren’t working out, you’re supposed to give them feedback and give them a shot at improvement (and document it all). All the while, they are consuming your precious cash and killing the morale of your high performers, or burning bridges with customers, or spoiling good leads. Unfortunately, I’ve seen every one of those things happen. My conclusion is that if instincts signal the least bit of hesitation about a hire, no matter the pressure to grow the business, I have to say no. A majority vote is not good enough.
No, I disagree
Startups have this weird dynamic where you need people marching to the same tune, but you also need an environment where people can question things. You want to avoid group think. You want to hear where your people are seeing problems. As you get bigger, this gets tougher. It gets harder for the CEO to hear dissatisfaction or brewing cynicism. I’ve seen different techniques, but at the end of the day, somehow you as CEO have to create trust that people can question without risk, that their comments will be taken seriously, and that there is a reasonable chance that real action will take place or, failing that, a logical explanation why not.
Addendum
For another interesting list of no’s, check out Chris Dixon’s Things startups do and don’t need (I don’t agree with *everything* on the list, but it’s good).
What other “no’s” are great in a startup?