For the last few months, week after week, I found myself on the phone with a client who kept trying to convince me why he needed to build a new product, when his startup hadn’t made much money yet on the core business. And you should already know why, as an early stage company, having more than one business is a bad idea (see here and here.)
So week after week, I got more and more concerned about this client’s ability to build their business, as warning bells kept ringing in my head, triggered by his desire to build a second product.
Until, finally, he admitted he was wrong.
Let’s back up a bit. This client initially raised money on a simple idea, one that several customers had each told him they would pay hundreds of thousands of dollars for. But in the past six months, his company had failed to close any meaningful deals. Initially, it seemed like an issue of features and functionality, and he had plenty of runway to make those changes to his product. But after two quarters, he was talking about raising more money to continue building out new features, which started to sound more like a new business entirely. And shouldn’t he have been funding that with the revenue from the first business?
I pride myself on good gut instincts. And the fact that this client couldn’t even sell this idea to me meant he’d never get it approved by his investors. When I told him so, that’s when he admitted that what he had initially assumed was a product a lot of companies needed all the time, was actually something they only needed a few times a year with an entirely unpredictable schedule. This new thing, however, they did need all the time, and they wanted it now.
In other words, he had been wrong about his initial business.
Once he was able to admit that, I said, “great, go tell the investors! They’ll be happy you learned something, and will probably be pretty willing to help.” But in order to admit that he had learned something and needed to make some changes, he first had to admit that he had been wrong about his initial hypothesis.
So much of the world of startups is about celebrating being wrong. Whole books, loads of whole books, have been written about the virtues of failure. Yet every founder I know has the hardest time admitting when they are wrong, because often what they are wrong about fundamentally underpins their business. They have a vested interest in being right. But your market doesn’t. Your market cares not a whit about you being right or wrong because it will happily ignore you on the way to solving the 19 problems it’s facing this hour.
And the faster you can say you were wrong, the faster you can go and do something about it.
It doesn’t matter if it’s investors, employees, or customers. When you give people a bunch of facts, then later give them another, contradictory set of facts without first clarifying where you wrong about the first, they don’t believe you. The CEO’s job is to communicate the vision, and this is core to that function. Think of it as “updating the vision.”
Look, I know it’s hard to admit you’re wrong. Especially before you’re sure you are right about something else. But it has to be done.
Because, at the end of the day, the universe doesn’t care about the stories you are telling yourself. You can tell yourself all day you can fly, but the moment you jump off a building, gravity will set you straight. So the sooner you can admit you were wrong, the sooner you can recognize the impacts of being wrong, take a good look at them, and move forward in a better direction. Without telling yourself what incorrect assumptions you had, you can’t communicate them to anyone else, and you’ll end up sounding like an idiot.
No one expects you to be right all, or even most, of the time. What they do expect is that you’ll learn something from it, and make the necessary course corrections to fix it as soon as possible. But first, you have to admit you were wrong.
— Eric Marcoullier
Oner of the best parts of being a coach is being able to call people on their bullshit and then watch as understanding floods their synapses. It’s not about being a jerk, it’s about not letting founders delude themselves with justifications that sound good while slowly suffocating the startup. If you’re looking for someone who will always give it to you straight, drop me an email or check out my coaching site.