5 Reasons Why Lying is Stupid in Startups (and Life)

Posted on January 12, 2010. Filed under: startups, venture capital | Tags: , , , |

1) You spend more energy/bandwidth maintaining a lie than you do dealing with the adverse effects of telling the truth: This is the main reason why I have categorically banned mistruths from my life (I’d say, by the way that 0% mistruth is almost impossible, but I have gotten damn close over the past 6 months or so).  In the near term, there are so many opportunities to “facilitate your path” through a small mistruth.  I challenge you to count the number of mistruths you tell in a day (I’ll bet it is north of 5)…It may seem like these mistruths are making your life easier (getting out of meetings you don’t want, getting meetings you do want, etc…), but I would argue that even the mistruths that are intended to make life easier end up requiring more energy than their truthful counterparts.  Let’s take the example of a friend who would like to work at your startup, who you don’t think is the right fit.  When they email you to ask for a coffee and you have 15 other things on your plate, the near term easiest solution would be to say “I’m slammed this week…can we try to catch up next?”  That clears you inbox in 10 seconds and you can move on to areas where you’d like to focus.  But what happens when that person email you again next week?  Now you need a new excuse, so you say “hey man, I’m traveling this week…I’ll ping you when I get back.”  That’s an additional xx units of bandwidth you spent creating a more complex excuse not to meet.  Then, when you do bump into this friend a month down the line, and he asks how your trip was, the entire balance of your interaction, and every interaction that follows, must exist with maintenance of your initial mistruth about being out of town.  That’s a lot of mental bandwidth to expend.

Now let’s think about what the case where you had taken 2 minutes, instead of 10 seconds, to address your friend’s initial request honestly but respectfully.  That’s 60 seconds of analysis as to why this person is not the right fit, 30 seconds on what you’d like to communicate to them, and 30 seconds to write, “hey man…the first 6 months of this company, we have very specific needs with regard to domain expertise.  If something comes up that seems right for you, I’ll let you know, but happy to grab coffee and talk about who else I know that might be looking for someone like you.”  Now, you won’t feel uncomfortable seeing this person, you don’t have to maintain any mistruth, and although you may not have given them what they really wanted, you are still being a solid friend and helping out where you can.  Life is FULL of these opportunities to take an extra pause to think about what you really want to say, as opposed to what’s easiest at first glance.

2) Interesting ideas and conclusions occur at the point where you analyze a temptation to lie: Simply by training yourself to pause before delivering a mistruth, you will begin to think more deeply about the points of friction in your life that evoke such an inclination.  Analysis of these points of friction can lead to proactive reduction in occurrence.  Pay attention to these points instead of glossing over them with an easy lie and you can begin to consciously influence their frequency.  For example, when an investor asks you “so what worries you? What keeps you up at night?” you could either give the stock answer which reveals a minor concern and represent it as your largest concern, (and then repeat this answer every time someone ask you this question)…or you can tell them the actual greatness weakness in your model…you might think that you are hurting your chances of raising capital, but in actuality revealing this weakness will force you to resolve/strengthen it (maybe even through a dialog with said investor).  Once strengthened to the point where this weakness does not prohibit investment, you will no longer feel inclined toward dishonesty when faced with the question.  Short term you may increase the risk of securing fundraising, but long term you are decreasing the risk of failure….

3) You set a context for interaction that results in other people telling you the truth (better data): If you make it clear that you will never lie to a party with whom you are interacting, that establishes a plane of trust that is usually reciprocated.  People feel much worse about misleading someone who they know is being completely honest with them (as opposed to a dynamic of gamesmanship in which misdirection and indirect communication on both sides is understood).  You would not believe how frequently professionals set this indirect tone when engaging with external parties…waste of time, energy, and generally a very myopic approach to maximizing value of relationships.  By establishing an environment of honesty and direct communication in any interaction, personal or professional, you will receive a flow of more accurate data on which to base decisions and opinions.  Better data equals better decisions.

4) Being direct about what you want usually gets you want you want: Ask for the order, whatever it might be.  Trying to extract value through indirect communication takes longer and often fails.  Example: When I began to raise my first seed round I met with a friend who is an entrepreneur and seed investor.  I hadn’t really asked anyone for money yet (and I felt a little uncomfortable doing so), so I pitched him under the guise of “seeking advice.”  When the meeting was over, he said “I hate it when people aren’t up front about what they want.  If you are asking me for an investment, ask me directly.”  He forced me to “ask for the order” and from that point forward I had no problem doing so with everyone else.  After that I started asking people for investment instead of advice and guess what I got?

5) Sometimes you get caught: this one is straightforward…when you get caught in a lie you lose credibility and damage your relationship with the recipient as well as your overall credibility.

There are many more reasons (ethical, karmic..etc…) why setting a personal goal of zero lies per day is a righteous endeavor.  The purpose of this post is simply to outline some of the more practical and tangible effects of eliminating mistruth from your existence.  So now I have established a plane of truth with every one of you.  Anything I tell you and anything you ask me (professional or personal), my response will be 100% truth.  Fire away.

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5 Responses to “5 Reasons Why Lying is Stupid in Startups (and Life)”

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Awesome, Jordan. I really look forward to your posts. Some of them make me a much stronger entrepreneur for reading them. And I couldn’t agree more with your emphasis on values like this and making them a part of your culture (please see Tony Hsieh’s incredible talk at Startup School: http://www.justin.tv/clip/782a20b8be2b4ebf)

I have thought about this idea a lot. Not so much about lying, but more about dealing with a large ego and how one should react to criticism. Do you just assume that bad things are never your fault? Do ignore negative feedback on your product and convince yourself that the customer is stupid? These kinds of reactions preserve your ego in the short term, but as we all know (especially in lean startup land), lead to great consequences and waste in the long run. And likewise, we have imbued this philosophy into the culture of our startup.

thanks for the link to Tony’s talk…looking forward to it…

good point Carter. It’s amazing how common this behaviour – lying to one’s self- is amongst entrepreneurs. It is the dark(,blind, and dangerous) side of the faith that enables one to get started and keep moving in the face of dismal odds. Don’t ignore the odds, improve them.

best post yet.

Zero lying policy! It’s my fav.

At the end of the day I need to look at my kids and feel like a good Dad. Sleeping at night is also nice.

You spend your entire life building a reputation that can be destroyed in seconds. Never compromise your integrity.

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    I’m a NYC based investor and entrepreneur. I've started a few companies and a venture capital firm. You can email me at Jordan.Cooper@gmail.com (p.s. i don’t use spell check…deal with it)


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