OK, it's time to come clean, everyone. We're all friends here, and presumably adults, so let's stop kidding each other. Whether you are a current startup founder or a serial entrepreneur, or you secretly have more than one Nickelback song on your smartphone right now, we all have something in common: At one time or another, we've told a white lie. A fib. A half-truth. A fabrication or an exaggeration or two.
It's all right to admit it--this is a safe place. You aren't the first entrepreneur who has subscribed to the old axiom "fake it until you make it" in order to get a meeting, close a deal, or will your business into existence, and you certainly won't be the last. It's been proven that sometimes entrepreneurs need to create their own luck in order to get the chance to make a vision become a reality.
So in the interest of bringing some transparency to this game of hyperbole we play with ourselves and others, I thought I would share a practical guide to some of most common exaggerations made by entrepreneurs, and what they really mean.
LIE #1: "We're absolutely killing it!"
TRUTH: Our last product launch shipped over a quarter late, we haven't hit our sales numbers in more than a year, and our burn rate is increasing every month. I'm so worried we won't make our plan that I've actually started Googling "Hidden health benefits of ramen noodle diet."
LIE #2: "We're totally gaining traction and market validation--user count is up like 100X!"
TRUTH: Our biggest prospect is threatening to sign with a competitor unless we give a huge discount and a couple hundred free users. We ran an email marketing campaign in which we accidentally offered respondents a free trial for life. Have you heard the term "pre-revenue"? We are more like "pre-pre-revenue."
LIE #3: "We just posted a record quarter! Bookings are up 721 percent!"
TRUTH: We actually closed business this quarter! Unfortunately, we aren't actually getting paid for any of it until we deliver the next product update, which won't be for another three to six months minimum. And bookings are up 721 percent … since we initially launched the company two and half years ago with a freemium go-to-market strategy and a couple college buddies signing on as our first clients.
LIE #4: "And on this slide you can see we start hitting a positive 'hockey stick effect' in sales starting in Year 3, and will quadruple the business by Year 5."
TRUTH: We have absolutely no clue how we are going to build the business this fast because we just released version .9 of the product yesterday. My cousin said if we don't show you a chart that looks like this, you will never do business with us or invest in us. But I am almost halfway through Donald Trump's book The Art of the Deal and I sold kitchen knives door-to-door when I was in college, so I am feeling pretty confident we can come close.
LIE #5: "Our strategy is to not worry about profitability right now."
TRUTH: We just closed a Series A round of funding so the pressure is totally off of us. Plus, I'm spending most of my time making important investments like Ping-Pong tables and FroYo machines for the office and putting together the details for our first company off-site at Atlantis in the Bahamas.
LIE #6: "We're consciously not seeking outside money--we're completely committed to bootstrapping."
TRUTH: We showed our business plan and investor deck to anyone who would look at it, and the only people who were willing to give us money were our grandparents and some guy we met at the bus station who said that Elvis is alive and he knows his whereabouts.
LIE #7: "We are not looking to get acquired."
TRUTH: We are looking to get acquired.
LIE #8: "We are currently considering our options including an IPO as our exit."
TRUTH: We are totally looking to get acquired.
LIE #9: "Did you see the awesome coverage we got from the national newspaper about our launch? I think we may be going viral."
TRUTH: Our overpriced PR firm couldn't find any influential industry bloggers interested in our "We are the Foursquare for Senior Citizens" angle, but a national newspaper did post the press release we wrote on its website. I think it got picked up automatically by them though because they didn't correct any of the eight spelling errors we had in it. Nonetheless, we've already plastered our corporate site with the publication's logo and have everyone posting a link to it on their LinkedIn accounts. We're just going to let the power of social media take it from there.
LIE #10: "We just closed our biggest deal ever!!!!"
TRUTH: We had a 10-minute meeting with a junior associate (or maybe it was an intern) at a potential big-name customer and, despite checking his smartphone every couple of minutes during the presentation and not having contract-signing authority, he absolutely loved our pitch. He said he would recommend us to his boss when she gets back from her monthlong sabbatical. If we get a verbal OK from her and her boss likes us, they said we might get the contract signed in 30 to 90 days!
LIE #11: "Our lead investor is so cool. She just lets us do our thing and she barely hassles us in our board meetings."
TRUTH: I think our lead investor forgot our names ever since her firm invested in Uber. I'm also pretty sure she was posting pictures on Instagram of her kids sitting in her private jet during the "State of the Business" presentation I pulled two all-nighters putting together for our last board call.
LIE #12: "We've done that sort of project before and should be able to get it done on your time frame. No problem."
TRUTH: My developer is in cardiac arrest right now from the scope of what we have been discussing, because he specifically told me before this meeting that his team is completely stretched thin. It may take us a few weeks to find an able replacement for him, and we may have everyone in the company (including our comptroller) spend the next six weekends in the office tackling the coding as a fun "team building" exercise, but we'll deliver it close to schedule. If we can't, we'll probably just blame it on "problems in the cloud" that were outside of our control.
LIE #13: "I love the daily 'struggle' of being an entrepreneur. I wouldn't have it any other way."
TRUTH: I haven't slept or eaten right in two years and my kids sometimes give me a puzzled look and refer to me as "That Man" when I am sitting at the kitchen table. Plus, if I quit now, my investors will see to it that I never get a paying job in this town again and my parents will definitely lose their retirement fund and have to move in with my great aunt. But whatever … YOLO!
So, there you have it--I hope we are all on the same page now. For those of you who may be appalled by reading this seemingly cavalier, lighthearted view of lying in business, please do not get me wrong. I am in no way condoning unethical or illegal behavior, deception, or being habitually misleading in the name of improving your business or owning personal prospects. An occasional exaggeration is one thing--pathological lying is neither funny nor acceptable and has no place in business.
Did I miss any good "lies" you have heard entrepreneurs tell or you have told yourself? Share them in the comments below!