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Tuesday, September 10, 2013

Honing our bullshit meter

I am writing this post because i realize there is quite a lot of bs running around in our industry and in the business world in general. Many businessmen somehow seem to believe that they need to "talk big" and make their business sound bigger. Many reasons for this. Personal face thing, help them sell more, help them recruit people better etc. While i feel that some bs is needed especially for the latter 2 reasons, standing from the listener point of view, we need to hone our bullshit meter well. I think i have a decent BS detection system developed over the last decade. I share some thoughts here :

1) I cannot understand what they do. I believe i am a rather smart guy business/academic wise. So if i cannot understand what the business does and how it makes its money, chances are it is all BS and the speaker is being deliberately obscure to mask a lack of business model. No founder is that bad at explaining what their business does.

2) Evasive or muddled about details. When asked about headcount, sales numbers, location of office, dont give any detail but instead continue to talk big about what they do. Or they give some general statistic. For example, 1.99 shop lady used to have a headline i noticed that says she built a $30M in sales business. That sounds great! Except if you read the small print, it is $30M over lifetime of business! Online, i read an article about Mindvalley that does the same time. We all know $10M in sales in 1 year is impressive. $10M in sales since inception over 6 years is much less so.

3) Unbelievable or constantly updated Linkedin recommendations & updates etc. Anyone who is running or has run a growing business knows that we spend all our time figuring out how to grow more. So if someone is spending loads of time making themselves sound good  on linkedin, i kind of feel they probably dont have much going on inside.

In fact, an extension of this is people who attend so many startup conferences. You should be spending time on your business to make money. Don't waste time meeting too many fellow startup entrepreneurs. It is like blind leading the blind. Talk to people who have succeeded in any business to get the right mindset and for industry knowledge to success stories from your industry.

4) Expenditure don't gel with claimed profile. Many examples of this.

Eg 1: Guy who claims to have exited 1,2,3 businesses and yet need to raise a 300k seed round. We need to get it straight.... if we transferred ownership of our internet business to another firm for 50k or 100k or even 200k, it is because our business failed. When we start Internet companies, the exit has to be at least 7 digits to even vaguely be called an exit. So rather than say I sold it off, I would respect the person who says the business failed and I managed to at least recover 100k for my investors through an asset sale. Then learn from the failure. Who are we fooling if not ourselves?

Eg 2: guy who claims business is doing very well but has little headcount, or need to raise capital, or somehow just seems to concerned with small things for the picture to be right. A general point from personal observation and I could be generalizing. But most people i know who really have made their money really do not sweat the small stuff.

5) name droppers. There are some people I meet who seem to know everyone! And they are hoping by association it makes them sound good. Yes, networking helps and if u do it well, can open some doors. But incessant name dropping just reeks of insecurity.

Readers do feel free to add your personal encounters. I am sure there are many. Bottom line, I hope fellow entrepreneurs can be more honest. You don't need to bullshit to succeed in business. You just need a great product, marketing and loads of paying clients on a profitable basis. Let your revenues and profits do the talking. If we look carefully at the real successes today, there are mostly below the radar. Food for thought.

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