You Want to Believe

“Against better judgement, we start to think that the options in front of us – an employee you may hire, a vendor you may select, an investor you may take money from—fits your needs even though in your heart of hearts you know you are making a bad decision. The pressure we’re under makes it very difficult to distinguish between the right and wrong solutions to our needs.” 

We are under pressure. We have limited time and resources. We want customers. We want money. We want people. We want investors. Nope. We need customers. We need money. We need people. We need investors. Gaining market acceptance is key to our success. Forging relationships with key employees, vendors and investors is critical. When we interact with the market, interview an employee, evaluate a vendor or present to an investor, we want—sorry, need—things to move in a positive direction. We want to believe that the customer, employee, vendor or investor sitting in front of us wants to do business with us or is right for our business

You will be evaluating a consultant who seems to have a lot of experience and isn’t that expensive. He can also start right away. Our first thought is, “Wow, someone who we can afford and who is available?” Do you ask yourself, “If he is good, why is he cheap and why is he not working?” Of course not. We want to believe.

The Wrong Perspective

Entrepreneurs with a flawed perspective let the pressure, passion, pleasure and pain overcome their judgment, and the judgment of others, to ignore the facts in front of them. For example,

• Employees. You interview a prospective employee who has never worked in your industry. You convince yourself that if the individual knows his functional area, you can teach them the industry, even if the industry is nuclear physics.
• Investors. Or you meet with potential investors who have a track record of negotiating contracts that require an exit event in one to two years. You turn a blind eye to this risk, and convince your team that this will force you to be more focused and efficient than your original five-year plan.
• Underestimating Time.This perspective also causes us to underestimate the amount of time it takes to forge relationships with key constituents such as customers and investors.
  • Customers. You want to win this customer. You need to win that customer. Don’t get me wrong, you can influence and shorten a sales cycle. However, winning customers takes time. At every stage, you must earn the right to advance with customers. Objectively understanding where you are in a sales cycle is critical to tailoring your strategic and tactical approach to winning customers. That starts with understanding where you stand, not where you want to stand with a customer.
  • Investors. The same is true when it comes to investors. You are running out of money and time. You need investment. Not surprisingly, you walk out of an investor meeting assuming the following: The investor you’ve just met for the first time, is perfect. The investor is definitely interested and will finalize an investment in thirty days. Be realistic with yourself. Investments take a long time. Assume six months. If it happens quicker, great. Don’t forget, investors are deliberate and see a lot of deals.

There is nothing wrong with being excited, but don’t let your need or desire (or panic) about the necessity of capital cloud the details of the meeting, terms, or relationship that is actually occurring.

The Right Perspective

The second group of entrepreneurs have developed the right perspective and ones that can be very productive. They:

• Understand the influence of the pressure, passion, pleasure and pain and how it can affect their judgment
• Are honest with themselves about the deficiencies of the employee, customer, vendor or investor
• Acknowledge that they may have to accept these deficiencies
• Establish a variety of communication strategies and tools to address or improve on these deficiencies.

This perspective enables the entrepreneur to acknowledge that the solution in front of them may not be ideal. They ask themselves, “We can’t afford the level of employee that we need. This person has some great qualities but some large gaps. Is it worth our time to help them develop?” They understand that there are gaps that must be managed. Instead of leading to frustration, this can lead to a concerted and productive team effort to get the resource to perform.

• Employees. When you understand the gaps of a new employee, you can make a concerted effort to train them or build process to expose them to the skills that they need.
• Vendors. If you are concerned about a vendor’s quality or ability to perform, create a regular process such as a weekly check-in meeting to hold them accountable. Set the tone from the beginning that you expect a weekly written report on progress.
• Customers. You may have to take on customers that are not ideal—they don’t pay you enough or are not in your target market. However, they provide revenue that you desperately need. Ask these customers if you can use them as a reference. Ask them if they will participate in your product development effort. Ask your customers if they have anyone they would be willing to refer you to.
• Investors. When you desperately need capital, it’s easy to choose investors who will give you what you most need—money. Without a clear perspective, however, you may be choosing partners who are deeply misaligned with other goals and long-term needs. Establish regular, transparent communication with this investor. Have candid discussions about their goals, your own goals, and design a plan that serves both of your needs.

For entrepreneurs, the early stages of building a business are particularly challenging, simply because you lack resources, established customers, relationships, capital and employees. But in the end, your perspective is everything: you can choose to ignore harmful deficits and continue to “want to believe.” To believe that the employee is right. To believe that the vendor will perform. To believe that the investor will fund. To believe that the customer will sign on. Or you can acknowledge this ineffectual perspective and turn the temptation to look the other way, or see what you want to see, into a chance to involve your entire team in better decision-making. You want to believe. The sooner you realize this about your-self, the sooner you can address this natural tendency and turn a frustration into a win.