When the experienced professionals don’t believe in your business idea, are they always right?
If you decide to take the plunge from complaining about your boss to becoming your own boss and starting a company, you will be in for a wild, wonderful and occasionally terrifying ride. One thing you’ll probably acquire as I did, was a new respect with anyone with the guts to start up their own business.
One of the things you’ll notice is that many people will tell you that your business won’t get off the ground. That it won’t be a success for one reason or another. The failure predictors.
When you are looking for funding, hearing that a VC (venture capital) company has declined to invest in your company, it can be depressing. Probably more of a setback than hearing from uncle Phil who’s business experience is limited to 20 years at the post office, telling you that your business idea won’t work and that you should go back to the cube farm.
However it’s nice to know that even some of the “experts” predictions of failure (or limited success) can be proven wrong in a spectacular fashion.
Many ADDers are known to have what some people call “resistance to authority” issues. Other say they’re only resistent to people with authority that happen to be stupider than they are, and are:
a) unaware of that fact and
b) posessing delusions of adequacies that are not supported by available evidence.
One positive outcome of these tendencies is that there are many ADD enterepreneurs. Many of the positive traits of people with ADD can be very useful in starting a business, ASSUMING they identify the areas of the business they either don’t like or are not good at i.e., paperwork, scheduling etc and hire someone/find a partner to take care of those areas.
Christian Mayaud, Chief Dung Analyst of the blog Sacred Cow Dung has a great story on how the experts are not always right. He talks about one VC firm that’s been around since 1911, BVP that has the guts to list the MOTUS that got away. MOTU in the VC world stands for
“Master Of The Universe” company. It is the legendary 100+ x investment. It is often the bellwether company in an emerging industry.
Here’s their Anti Portfoilo
We chose to decline the investments below, each of which we had the opportunity to invest in, and each of which later blossomed into a tremendously successful company. Our reasons for passing on these investments varied.
Apple Computer
eBay
Federal Express
Incredibly, BVP passed on Federal Express seven times.
Cowan’s college friend rented her garage to Sergey and Larry for their first year. In 1999 and 2000 she tried to introduce Cowan to “these two really smart Stanford students writing a search engine”. Students? A new search engine? In the most important moment ever for Bessemer’s anti-portfolio, Cowan asked her, “How can I get out of this house without going anywhere near your garage?”
Intel
Intuit
Lotus & Compaq
So next time an expert tells you why your business idea won’t go anywhere, listen to the reasons, see if you can learn something from them, but do take them with a grain of salt.
If, however, you’re the only one besides your immediate relatives that think it’s a good business idea, than that’s another story. Fantasy businesses are different from real ones. We ADDers can be great brainstormers, creators of a million ideas, just make sure you know the difference between a dream and a solid plan.
One thing to remember is that when a venture capital company declines to invest in your company they are not saying that you business will fail or will have limited success. Although rejection may feel like failure, it is not the same thing. Rejection is one person or organization’s opinion of what you have to offer. Many VC’s will pass on an opportunity simply because they do not have someone with the technical expertise to fully understand a specific business opportunity.
There are many passions that attract adults with ADD that have a high rejection rate. Off the top of my head I can think of writing, music, and art where many people will tell you that they do not like your work, but if the niche of people that your are trying to reach love it you will be a success.
that’s true John, if they don’t understand your business opportunity well enough, they shouldn’t work with you. I’m post this as an example that experienced people can be wrong in their judgements of your business, and you shouldn’t necessarily be too discouraged by having a few “experts” telling you they believe your business won’t work. I’m sure in some of these cases they just didn’t think they were the right people for the companies.
I’m not condemning BVP for putting this out, the fact that BVP had the confidence to put this list out I would view them in a better light than other VC firms that would not do such a thing.
Pete
I really liked your article,and I liked the fact that BVP put out their list of the ones that got away. I agree that people shouldn’t get discouraged by “expert” rejection. I think the biggest issue I had was your opinion that the VC experts were predicting failure. A VC’s job is to predict who has the chance of being the greatest success.