Lies People Tell Me ...  

Past readers of this space will recall that I am routinely confronted with documents that purport to be Business Plans. Such documents typically arrive in e-mail attachments, except in those all-too-common cases where they exceed the limit I prudently place on the size of incoming messages. Sometimes they arrive with a thump, as the poor, stoop-shouldered mailman unloads his bag on my desk. Most of them are nicely typed and spell-checked, although I’ve discovered that even the best word processor won’t save someone who says “ … if you don’t invest in us you don’t know what your missing!” 

There’s also no cure for the terminally generic, like the one I read recently that opened with “[Fill in the blank] is an Internet service company providing an integrated set of solutions including web site design, hosting, e-commerce, & Internet marketing services.” Golly. Where have I heard THAT before?  

Anyway, because it’s my job, and because I’ve developed a somewhat sporting fascination with the varied ways entrepreneurs try to “… put lipstick on a pig,” I actually read each and every one that comes my way. Really. OK, sometimes I skip a section or two when it becomes clear that the author MIGHT be stretching credulity a bit. Not that I don’t trust entrepreneurs to provide blindingly honest assessments of their business, it’s just that I’ve learned over time to expect a little “Truth Decay” when dealing with people who have as much at stake as most entrepreneurs.  

Entrepreneurs are, after all, chronic, unrepentant, and irretrievable optimists. It’s their nature, and let’s hope they always stay that way, because no pessimist ever created anything of value in the world of technology or business. But such constant optimism causes most of them to indulge in a few pale prevarications as they attempt to enlist others in their vision of how the world should be. Here are few of my favorites, summarized from too many years of reading things like “... If you don't invest in us, we both lose money.”  

1. “Our plan includes highly conservative projections” This is another way of saying “We keep tweaking the spreadsheets and we don’t think anyone’s going to believe we can make these numbers so we divided by ten.”   
2. “We project exponential growth” Which means they spent as much time playing with the LOGEST function in EXCEL as they did picking their future revenue numbers out of thin air.   
3. “We expect major companies to partner with us within the first six months of operation” In other words, they’re hoping the marketing guy from Motorola they met at a trade show a year ago will at least answer their phone call.   
4. “We’re prepared to attack the ‘Big Boys’ one-on-one” This is usually followed by something like “... our technology is ‘disruptive’ and the major companies in our space are too slow to respond,” which usually means it's time to go buy stock in the major companies in their space ...   
5. “We only need 1% of the market to reach break even” Thank you, but I think I’d rather work with someone who wants 90% market share and has enough on the ball to know how to get it!   
6. “Our market is too large to measure” Or, “ ... we didn’t want to pay $3K for a Frost and Sullivan report, and the articles we read in Forbes and The Economist had different numbers so we punted.”   
7. “We have a number of ‘Rainmakers’ ready to come on-board as soon as we get funded” Would you mind if I called them? Maybe THEY can tell me what I'm missing in all this gobbledygook!   
8. “Our patent will protect us from the competition” More likely it’ll protect you from making any money while your brother-in-law, who agreed to help you with your patent application based on the one semester of “Engineering Law” he took as an undergrad, gets run over by a truckload of corporate lawyers from the Mega Corp that already dominates your target market.   
9. “Our ‘First Mover Advantage’ will protect us from the competition” Or it’ll keep that same Mega Corp from wasting its time until you’ve proven the market exists, and then 20 minutes after you've gotten their attention you'll be reversed engineered out of existence.   
10. “There is no competition” And no customers either ...   

A little harsh? Perhaps, but trust me when I tell I you that these, or statements just like them, show up all the time. But amazingly, when I offer a heartfelt critique, the authors more often than not seem to appreciate the help, fix the problems, and move onward to chase their inevitable success. Or, as the noted humorist, Winston Churchill, once put it: “Men occasionally stumble over the truth, but most of them pick themselves up and hurry off as if nothing happened.” And more power to ‘em. Here’s hoping that entrepreneurs continue to be a little divorced from reality, and ready to mold it in ways none of us ever thought possible.