Parsing Advice as an Entrepreneur

Understanding what’s true and what’s not in startup land is one of the most difficult challenges that I’ve dealt with as an entrepreneur. I’m not saying there is a lot of purposely false information being disseminated. More, I’m saying that a lot of advice, stories, etc that you hear are just wrong.

In fact, your better advisors will tell you that “90% of what I say is wrong, and it’s your job to understand the 10% that is relevant and should be acted upon.” Of course, your BEST advisors will tell you things that are 80% true as they understand you and your business. That makes your job a lot easier.

It takes a village

It’s very true that without the help of those in your business community, your company simply won’t get off the ground. Some help comes in the form of early customers willing to take a risk. Other help is in the form of capital from angels. And, much of this help is in the form of advice and connections from leaders in the community – or someone who just happens to know something specialized and useful.

One of the things that makes Silicon Valley an amazingly fertile place to start a company is that it has these groups of people in spades. And, they’re willing to help.

However, while advice can be helpful, there is so much bad advice out there! And, it truly is your job as an entrepreneur to figure out what is right (as best you can).

Here is some of my advice (hehe) on how to parse this information, and warning signs to look out for.

Incentives matter

As Charlie Munger likes to point out, personal incentives matter, a lot. If someone has an equity stake in your business, they may be pushing you to go big or go home, even if it’s too early to pour gas on the fire. If someone owns a blog/conference/whatever they may want you to advertise there. Be careful if they’re getting money out of that, even if it seems like a good idea and you trust the person.

Don’t believe the hype

Once in a while you get connected to someone who’s a real startup luminary. They sold their last company for a lot of money, or work at some big VC fund. Many times these people have insane degrees, and you’ve read about them in the latest Forbes list of XX under XX.

Be careful. Just because someone has the right credential, doesn’t mean that they understand your space, your tactics, the problems you’re dealing with right now, or the way you want to build a company. Besides, most people who have large personal brands got that way by working on them, not necessarily by doing anything impressive.

People learn the wrong lessons

Many times entrepreneurs or VCs share the tactic that they believe helped their last company get off the ground and relate it to your business. They know this is a proven method that works, and so you should do it too (I’m totally guilty of telling everyone I know to go to bschool, btw).

The problem is that what worked for a B2C business 3 years ago doesn’t work for a B2B business today, or even a B2C business. It COULD, but be very weary of people who tell you to do what they did simply because that’s what they know. Pick apart why this time may be different, and try to have an intellectual conversation with them.

Ego

Many people who give advice just like to give advice for their own sense of self worth. I have a running joke with my co-founder about this one guy who always says he’ll do me a favor and make time on his calendar for us. He never does, and we really don’t want the time anyways. He simply wants to give advice for the sake of being heard, which is another problem with personal brand builder types.

This is the type of person who won’t listen to you, and who’ll just talk about themselves for an hour and then expect a thank you for wasting your time.

You’re always wrong and you’re always right

In these conversations, you’ll get told you’re wrong and right by different impressive people for the same conclusion or tactic. That’s part of the problem here. This advice stuff is all just another datapoint in your way forward.

My advice: trust your gut, and don’t be afraid to go against the grain. If someone says you’re wrong, understand why. Same with someone who thinks you’re right. Are they really hearing you? Do they understand the details of what you’re saying? What assumptions are they making and what information are they missing?

For example, I might tell someone I’m going to use inside sales to sell my product. Some people don’t know what inside sales means, some people will remember a blog post they read where you have to have a certain ACV to do inside sales, and some will build out a strategy in their head around what their inside sales strategy for your company would look like. All three of these people will tell you “you’re right” or “you’re wrong” based on what’s in their head. Figure out what they’re thinking, why, if you can add more to the big picture, and get more useful data.

You can learn from the wrong people too

It’s worth noting that you can learn A LOT from wrong people. First off, if you tell 5 people what you’re doing and no one gets it – then you’re doing a terrible job explaining it.

On the other hand, you may find out that your go to market is a bit cutting edge and no one intuitively understands it simply because you’re doing something other people haven’t thought of. That’s a valuable learning too.

Vetting the people you trust

What I like to do to understand whether I should listen to someone is to logically deconstruct what they’ve said. Are there gaps? Are they willing to get into the details of what they’re saying to understand if they’re right/wrong? Are they saying things that are simply logically inconsistent?

For example, one “luminary” told us how our company is just way too early for him as an investor. Then he went on to brag about this one investment he made that just signed up their first enterprise deal, for $15k. Ok, so we have way more revenue than this company you’re proud of, and we’re too early? That doesn’t make any sense. Of course, I have a high risk of taking something like this personally and so have to be aware of that in my judgment of him as well.

Bottom line: Make sure people you get advice from aren’t ego driven, have aligned incentives, know stuff you don’t, and that you feel on are the same page as you are.

Ok, my video has stopped encoding which means it’s time for me to get back to work. If you have thoughts on this, please leave them in the comments. I’d love to learn from others in this area as there are clearly no black and white ways to operate, but it’s so very important to have a semblance of a framework for this.