"No's Are Free" - It Might Be Time to Stock Up!
Entrepreneur Office Hours - Issue #230
My office surrounds a large room that occasionally hosts speakers. As a result, I sometimes find myself sneaking out at the end of the day in order to not disturb whatever event is happening. In these scenarios, I’m focused on making as little noise as possible and ignoring what the speaker is saying. However, as I was sneaking out of my office a few weeks ago, a venture capitalist was giving a talk to a group of business school students, and she said something so pithy and thoughtful that I haven’t been able to get out of my head.
She told the crowd: “At my firm, we have a mantra we constantly repeat to the founders we invest in: No’s are free.”
What a great philosophy! It’s so great, in fact, that I’ve decided to steal it and make it a mantra for this community, too.
People are afraid of the word “no.” It’s something that gets deeply implanted in our psyches during childhood when we all have parents and teachers constantly telling us “no.” (As a parent of two young children, I can confirm I tell my children “no” at least a dozen times a day.)
But, as entrepreneurs, we need to understand that a “no” isn’t a bad thing. A “no” is a gift.
It’s actually two gifts, rapped in one.
The first gift is that a “no” is a great form of feedback. When people tell you “no” — potential investors, potential customers, potential employees, etc. — they’re providing valuable datapoints about what you’re building and who it doesn’t appeal to. Never waste that data. Use it to better understand how to improve.
The second gift of a “no” is that it saves time. When people clearly and decisively tell you “no,” you don’t have to worry about them anymore. For example, investors who say “no” are investors you no longer have to meet with and update. Customers who give a clear “no” let you stop wasting time and money trying to sell to them.
Simply put, a “no” provides important directionality for whatever your startup is trying to accomplish. Best of all, as that VC I was eavesdropping on had been telling her audience, “no’s are free.” They don’t cost the people you’re asking anything, and they don’t cost you anything.
So what are you waiting for? Go out and get as many people telling you “no” as possible. In fact, the more times you hear people tell you “no,” the better you’ll be at finding people who want to say “yes.”
-Aaron
This week’s new articles…
The Surprising Virtue of Brutal Honesty in Startup Culture
There’s a reason why honest feedback is so rare in the startup world. Do you know what to do when you find someone willing to tell you what they actually think?
I Got Better at Hiring for My Startup After My First Employee Stole $5,000
Sharing an embarrassing story about the expensive lesson I got that taught me how to hire high-quality startup talent.
Office Hours Q&A
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QUESTION:
Hi Dr. Dinin!
I was in your class nearly a decade ago. First, I just want to tell you how much I love your newsletter and Instagram content. It’s so cool being able to still see all the things you’re working on with current students. The things I learned in your class have been the most valuable skills in my career. Yes, you can tell your students I said to pay closer attention! I know I wish I did!
I wanted to email today because I have a question that goes back to something I remember you discussing when I was your student. You always used to say that you didn’t expect us to build companies right away but, if we kept our eyes open, at some point during our careers we’d probably find something that, in our industry, could become a good startup opportunity.
I think I might have found one of those things, but I’m nervous. I’ve been at my company since graduating, which was almost a decade ago, so I’ve put a lot of professional equity into my career. How do we know when it’s worth risking all of that for a startup idea?
Looking forward to hearing your thoughts,
Sophia
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First, thanks for making me feel old. I can’t believe I have former students who are now established professionals with a decade of experience. Yikes!
More importantly, let’s explore your issue: when/how to leave a good job for an entrepreneurial opportunity.
I’ll be the first to tell you that deciding to leave a stable job to launch a new venture is daunting. There’s no “right” choice, and there’s no “easy” choice. The best I can do is give some high-level thoughts to consider:
Market Validation: Have you thoroughly assessed if there’s a real demand for your idea. Who are your potential customers and competitors? How are you going to reach them? Understanding these things before you “take the leap” is going to significantly de-risk the venture (or tell you not to do it).
Financial and Personal Readiness: Do you have the financial cushion to support yourself early on? And don’t forget about the emotional and physical readiness, too. Startup life is a grind. Yes, it’s going to be expensive, but it’s also going to wear you down physically. Is your body up for that?
Opportunity Cost: The main challenge with a decision like the one you’re trying to make is that both options have significant positive and negative potential impacts. Properly weighing these unknown kinds of outcomes is never easy. The real question you have to ask yourself is: “What might I regret more—leaving my job or never pursuing my idea?” Sometimes, the risk of not knowing is greater than the comfort of stability.
Start Small: You’ve presented the issue as an either/or kind of thing. But does it have to be? Could you begin your venture as a side project? This approach could allow you to test your idea without fully leaving your current role.
I hope these considerations are helpful. Remember, whatever you decide, there’s no obvious right or wrong. Instead, the best you can hope to do is make a well-informed choice that aligns with both your professional ambitions and personal life.
Best of luck, and keep me updated on your journey!
Got startup questions of your own? Reply to this email with whatever you want to know, and I’ll do my best to answer!
OK, gotta push back. No's are Free is more evidence to me, Aaron, that lofty VC and PE are disconnected from the businesses they invest in and think, because they bring money, they can manage. At the operations and marketing levels, where staff are expected to pick up the loads of peers of the many VC and PE that reflexively lay off to squeeze the cost line, "no" would be a kiss of death. No, I won't work 60 hour weeks (especially on hairbrained ideas); no, I can't maintain product quality given the reduction in knowledgeable/expert staff ; no, we can't possibly meet the additional deliverables you have in your lofty investor plan; no, I can't handle current customer needs if this new LOB is introduced; no, it is not a good idea to off-shore this area of the domestic business. No's are demonstrably not free. If you want to keep your job, what VE and PC want is "yes", for just as long as it takes to sell the business.