Confidence, Transparency and Authenticity

Giff Constable startups

Bob Sutton wrote an interesting post the other day called “The Wise Boss: More Evidence For Expressing Confidence, But Harboring Private Doubts“. He touches upon a topic that a lot of business leaders grapple with: what is the right balance between confidence and transparency. The interplay between the two is particularly heightened in a young startup, where you are inevitably surrounded by uncertainty and doubt (anyone who says otherwise is either blind or full of shit). It is essential for a startup CEO to be the anchor of the business, which often means keeping concerns locked up inside, or at most, reserved for a close co-founder. Like all things, it is all about balance:

  • A startup CEO needs to be a strong optimist that others can rally around, but if you take this too far during difficult times, credibility will disappear fast and recover *very* slowly.
  • A startup CEO needs to be decisive and quick-thinking, but without jerking the company around with fads or poorly thought-out decisions.
  • A startup CEO needs to give people the leadership they *very much want*, while making sure that people feel like their voice is at least heard and respected, even if not always acted upon.
  • A startup CEO needs to foster employee independence and empowerment, without allowing a complete free-for-all.

If you find the right balance, and are willing to make tough, even unpopular, decisions, you will earn respect.

Confidence and comportment are also very important for fundraising. This is an area where I have considerably less personal experience.

A lot of VCs say they like realism and humility in a pitch, yet so many industry observers believe that reality-distorting confidence wins the day more often than not. I have seen countless situations where a smooth-talking entrepreneur swept a VC off their feet, and then proceeded to waste tremendous amounts of money due to drinking too much of their own kool-aid or disastrous operational skills. For better or worse, I’ve worked for two venture-backed companies like that. It is arguably the biggest chink in the VC “pattern recognition” armor, and possibly a bigger weakness for investors who have never been operators themselves. Still, as an entrepreneur, while you need to exude confidence and conviction, I suspect that the best approach is not to try to radically change yourself for the investors, who after all spend their days trying to see through people, but to just stay strong, be yourself, and hunt down the investors who fit *you*.