Tech Trailblazers

Tech Trailblazers

Thursday, 30 June 2011 14:44

The power of ‘no’

When embarking on a start-up, no one – customers, friends or investors – will give you a straight out ‘no’.


One of the most frustrating aspects of creating a start-up is that friends don't want to offend you, investors have an incentive to wait longer and your apparent customers may not have buying power or decision-making authority.


Customers may at least tell you ‘no’, but more of them will simply let a communications trail gently taper off. When starting a business, your job is to find the most speedy path to solving customers’ problems.


Because founders start with a grand vision, you might think suitably lofty large corporations would make the ideal first customer. In nearly all cases, they won't.


You might think Coca-Cola is an ideal customer to your media company. You make contact and an advocate from within Coca-Cola really loves your solution. But there’s a problem. They need their boss to sign off, then the existing ad agency needs to weigh in as well to vigorously defend its turf.


The problem is, it takes an eternity to make decisions at big companies and decision-making processes are likely to be complex. At any one of these steps, the lines of communication may go quiet.


That's the most common form of a 'no'. That's not to say you should pack up at the first moments of adversity, but prioritising your efforts to the first person to be able to write a cheque should be paramount.


When you approach friends for feedback, anything you do they will naturally like. Simply to be a good friend they will automatically offer support.


When getting feedback from them it's very important you talk as little as possible about what you are doing and instead focus your efforts on the problem you are solving.


Instead of "Check out my new social network" and getting a "Looks awesome" in reply, how about you ask "Do you have problems sharing photos with your friends on Facebook? What do you do to solve them?"


Investors are an even more nuanced bunch. They will offer words of encouragement and then end with "Let's meet back up when you have traction" – frustratingly ignoring that if you did have traction, you wouldn't likely be talking to them.


Or, most tantalisingly of all: “I want to invest but let me know how the round comes together.” They do not want to miss out on something but don’t show the courage to invest from their own independent thought.


The hardest no's to take are these more nuanced ones, as they look so promising in the beginning.


The key is to not get your hopes up until someone signs on the dotted line. Otherwise your emotions will likely fluctuate more than a teenager at a high school dance.

Niki Scevak is the founder of Homethinking, a real estate startup based in the US, and Startmate, a mentor-driven seed fund that invests in small startups at the earliest of stages. He is based in Sydney.

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