Fred Wilson is usually right. His track record speaks volumes. He’s right as a VC and as blogger, and his music taste ain’t to shabby either. But once in a while, everyone misses the mark, well, sort of.
I’ve been really busy with the company’s torrid growth thus far in 2007. So I missed quite a bit of the good questions that circulate around the Web. Fred last week posted something on “saying no.” In a nutshell, saying no is an art form, it’s something that we sometimes can’t say, but oftentimes should. My problem with that mindset is that his rationale makes sense for a VC, who gets bombarded a dozen times a week (or day?) with business pitches. In his defense, it should be said, his blog is from the vantage point of a VC, but his audience are probably entrepreneurs and executives, and I hate to say it, but to succeed in business you have to say YES.
In fact, Fred adds:
Startups can go in many directions. There’s always the desire to please the customers. But knowing what you are going to do and focusing on it is so critical. Saying yes might seem like no big deal. It’s only a few lines of code, right? Wrong. It’s never just a few lines of code. So say no as often as you can. It’s counter intuitive to the entrepreneur mindset, but it’s critical.
I could not disagree any more. Mark Cuban used to say that he’d sell a service or product and then go home, read on the topic and worry about delivering it afterwards. It’s somewhat maniacal and can land you in trouble, but isn’t that what entrepreneurship and salesmanship are all about?
I’ve worked with business “leaders” whose favorite words are “no.” After a while, you sort of wonder if their negativity has more to do with their own shortcomings or their conservative, pragmatic nature? Usually it’s the former. Just because they can’t see through the fog, they assume that others can’t either. Trust me, I am not referring to Fred there, but rather, actual executives at places I have worked.
Don’t get me wrong, every smart CEO needs to avoid hubris, and that entails knowing where to draw the line, but if you want to win in business, sports or in life in general, you need a “can do” attitude, and more so that anything else you need a can-do attitude with clients. After all, “sales solves everything” as Cuban would say. Say no to a client, and usually he or she won’t change his mind, he’ll go elsewhere.
When I began my career in sales, I had no experience whatsoever, but a peek at the company’s financials suggested that unless someone in the room grabbed the bull by the horns and sold the company would go broke. I was right, we were a few quarters away from running out of money, and within one quarter of starting to sell (saying yes to the challenge, effectively) we hit profitability and never looked back.
It was not just saying yes to the challenge of selling. It was also knowing what to sell. As a VP of sales for a content site, initially I had no idea if online advertising would be more lucrative than paid subscriptions.
Over time, because consumers spend 25% of their time online but marketers only spend 5% of their budgets online, putting the content out for free and selling ads turned out to be the way to go.
I was given the mandate of ad sales, maybe that was luck and maybe that and only that explains why I went on to sell 75% of the company’s sales. But guess what, had I been given the task of boosting licensing and paid subscriptions, I would have made that work, too. The proof is in the pudding today.
I kept the blinds open. I said yes to all options. As VP of Ad Sales, I cannot tell you the number of times where clients would ask for things that was not on the menu. I found a way to make the company and client win. That is what makes a winner.
In the end, I’d say you only need to say no 20% of the time, 4 times out of 5, you better say yes because otherwise, you are sending your clients to the competition. Clients are just as savvy as you are and they have their own viewpoint and biases as you do, so when a client asks you for something, don’t talk them out of of it. If you feel strongly against something, try to explain why but in the end, it’s their money.
As an investor, it might very well be the opposite: you should say yes 20% of the time (for example). But not in business, and certainly not in sales. All of the cliches in the world apply: “the road less traveled,” “nothing ventured, nothing gained,” etc.
Yahoo! said no to Google.
MSFT said no to the Web, then search.
The list goes on.
As an investor in the stock market, I can tell you that regret is much larger when you don’t take an action. For some odd, strange reason, everytime I have said yes to a stock and it backfired, the regret was surprisingly much lower than when I said no and the darn thing took off. Maybe it’s because usually a stock that is out-of-the-money will invariably get back in the money; who knows. Maybe it’s just me.
All I know is: I will gladly say yes and learn to live with it with minimal regret any day.
If you look back at all of the greatest discoveries and inventions, more often than not, they were discovered / invented through luck.
Bottom line: the only thing you should say no to is presuming that you know the score on the board before the game is played out.
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January 29th, 2007 at 7:55 pm
I read Fred’s post as well, but I have to say I agree with what he’s after. I don’t think Fred really means say no to customers or don’t have a can-do attitude. My take on it is that start-ups inevitably have limited resources. To say yes to every possible direction or idea that comes in depletes those resources and results in a company trying to do too much too soon. Saying no at the right times keeps you on track and allows you to execute; saying yes to everything scatters your efforts and all too often means you do nothing well.
January 29th, 2007 at 8:20 pm
James, thanks for the comment.
I don’t think Fred - or anyone preaching the art of saying no - is wrong. I just think that VC blogs are read by many non-VCs.
As such, sure a VC should say no 80% of the time (if not more). But the people reading such blogs are mainly execs and entrepreneurs and we need a yes mindset. VCs should bear that in mind (and in all fairness I think Fred and most VCs do when they blog).
If I said no 80% of the time, I’d be a low-expectation you-know-what. I’d also be out of business.
I have to think that I can deliver what clients want even if it means going back to the drawing board to think of how. Otherwise, I am sending them to the competitor, or worst still, I turn clients/partners into competitors, which is what Yahoo! did to Google.
Also, doing more with less is the ultimate sign of a great businessman, so saying that you should say no is plain counter-productive, especially when it means that saying yes runs counter to business plan and much-cherished projections that frankly don’t mean much in the trenches.
Just my two-cents.
January 30th, 2007 at 5:31 pm
What do you do when the boss’s fat daughter asks you out for drinks?