#37 - Liars
Reality distortion, flowing, and convention
Are the best founders liars?
It’s a fine line.
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Reality Distortion
It never quite works out as planned. Sales targets slip and promises quietly disappear. Is the founder a liar or a hopeless optimist in a complex world?
I’m borrowing this idea from Matt Stafford who makes the case, here, that founders must distort reality. They live in “sales mode”.
It’s an interesting one. Human’s are terrible forecasters so inevitably there’s an element of bullshit in the pitching process. It becomes more about convincing the investors than mapping out a plan for the future.
When I began fundraising, earlier this year, I didn’t care much for my financial model. Who the f**k knows what will happen? I thought. I was in no doubt there was a big enough opportunity and that we’d take advantage of it. I really wasn’t fussed what my margin would be in 2025. Not what investors wanted to hear.
I got ripped apart. For the investor, every assurance is needed that this isn’t going to be yet another failed startup. For the entrepreneur they’ve already gone for it so they better make it f**king work.
There’s a great line from one of Ben & Jerry (of ice cream fame) talking about investors and financial models:
“If the numbers don’t work just change them until they do.”
Here here. And yet is it ethical? Changing the numbers to what investors want to see, even if deep down you don’t believe them. You need that money.
The problem is that the model then becomes the map. The deck becomes your roadmap. The die is cast.
Flowing
I have mixed feeling about it. On one hand a well defined plan provides much needed focus, on the other it acts as a blinker.
This week I read Flow by Mihaly Csikzentmihalyi. There’s a wonderful passage in which he speaks of the difference between a conventional artist and an original artist:
“Whereas a conventional artist starts painting a canvas knowing what she wants to paint and holds to the original intention until the work is finished, an original artist with equal technical training commences with a deeply felt but undefined goal in mind, keeps modifying the picture in response to the unexpected colours and shapes emerging from the canvas, and ends up with a finished work that probably will not resemble anything she started out with.”
Perhaps you see the problem.
The founder plans the next 3-5 years with her investors based on a model designed to raise money. Like the conventional artist, the blinkers go on and the plan is followed as best it can be.
Conventional
A five year plan occupies ones attention. As a result the unexpected colours and shapes are overlooked. The business becomes more about hitting promises than building something magical.
I suspect I’m operating in the conventional artist camp. At many points this year I’ve privately dismissed the targets in our pitch deck as unreachable. But the numbers have pulled me back.
I’m clear on what needs to happen. Fine. But I do find myself wondering what I’m missing. I certainly could be more present to the shapes and whilst the targets are useful I suspect there’s room for both.
The same is true of life, I suppose. We have plans and dreams but it’s an unpredictable world. We spend so much time wrestling for control. But sometimes it’s better to go with the flow, and stop lying to ourselves. Life can take you to remarkable places if you let it.
My Week in Books📚
Flow by Mihaly Csikzentmihalyi
Such a joy to read. I’m familiar with the concept of flow and so thought this book had nothing for me. I was wrong. A wonderful view on happiness and living a life meaningful.
Thank you Matteo Tittarelli for the recommendation. 🙏
I’ll be updating the books I’ve read this year here. Any recommendations? Let me know!
A Final Thought 💡
“Let things flow naturally forward in whatever way they like.”
– Laozi