What story are your words telling?
Every day at Investable, we get to meet with amazing entrepreneurs who are audacious enough to try to imagine and build the future. We help founders prepare to raise capital and grow, and I have noticed a couple of common sentiments among many founders:
They are looking for a single “right” way to fundraise and build their companies.
They feel they “need” to raise money to be successful.
I am not proud of it, but I used to be guilty of buying into this mindset. We used to talk behind founders’ backs about the “right” way to do things. We would point out how trivial the dilemma they were facing seemed to us. Many of the statements we would make were some version of, “all they need to do is just ___”. I look back and realize I was telling a harmful story: that there is anything “trivial” about building a company (there isn’t), that the founder cares about exactly what I care about (they don’t), and that I know better than they do about what they “should” do (I don’t).
One of our mentors imbued our organization with a new sensibility about the power of language. It holds a subtle ability to either emancipate or disempower people. As we’ve learned from Carol Dweck, the language you use can carry life-changing implications:
“I heard about a high school in Chicago where students had to pass a certain number of courses to graduate, and if they didn’t pass a course, they got the grade ‘Not Yet.’ And I thought that was fantastic, because if you get a failing grade, you think, I’m nothing, I’m nowhere. But if you get the grade ‘Not Yet’ you understand that you’re on a learning curve. It gives you a path into the future.” — Carol Dweck, “Mindset”
Now, I’ve (mostly 😇) stopped telling harmful stories. Instead of putting energy into the path I think a founder “should” take, I invest my energy in meeting founders where they are, and helping them articulate where they would like to go. This means helping founders develop a certain type of mindset, one that views life as a path they are actively creating. This means helping them see the agency they have in what they are doing, and how they do it.
So, what is the “right” way to build a company? Who gets to say what the “right” way is? I think this is the wrong question, and comes from a mistaken sense that startups are like school or large businesses, to wit, a “game” to be “hacked”. In schools and large companies, you can excel by gaining validation from The Authorities™ (teachers or bosses). In startups, the only validation that matters is “does the market (as you care to define ‘market’) agree that I am creating value?”, and the only “game” that matters is the one you truly care to play and win. Some of the most powerful transformations we’ve seen in founders is when they stop playing someone else’s game, stop looking for “validation” from others — including me — and realize that 1) they can define what type of company they care to build, and 2) the “right” way to build their company means what is “right” for them, not for someone else (note that sometimes the “right” way is not to build a company at all).
For example, we at Investable believe that winning means being the most authentic and impactful version of yourself, as a person, a team, and a company. We focus on helping people make their businesses work better, but it’s not about maximizing profit, it’s about using the business as a means of becoming who you want to become. (This also isn’t “right”, it is the viewpoint we’ve chosen.)
Does a startup “need” to raise money? We have observed that in the resource-scarce context of early-stage ventures, resourcefulness beats resources. The most successful founders have realized that they don’t need to raise money, but that the many sources of capital available are resources they can choose to use or not. Raising money can add value, but it’s not required. Facebook ($600M raised) “worked”, and so did Mailchimp ($0 raised):
“In fact, it’s possible to create a huge tech company without taking venture capital, and without spending far beyond your means. It’s possible, in other words, to start a tech company that runs more like a normal business than a debt-fueled rocket ship careening out of control. Believe it or not, start-ups don’t even have to be headquartered in San Francisco or Silicon Valley.” — Farhad Manjoo, in “MailChimp and the Un-Silicon Valley Way to Make It as a Start-Up”.
Whether or not to raise money, how to build a company, and other issues will challenge founders along their journey. There are many well-meaning mentors, advisers, and peer entrepreneurs that try to help founders with these questions. It is paramount to remember that when helping people build businesses, we are often helping them with one of the most ambiguous and intensely personal endeavors of their life.
To help us “helpers” empower entrepreneurs and imbue them with the agency to build a path that is meaningful and fulfilling to them, we are working to divest our vocabularies of well-meaning, but prescriptive words. These include “should”, “need to / have to”, “better/worse”, and “right/wrong”.
You’ve heard these words before, but I believe we can upgrade some common statements I’ve heard (from well-meaning founders to other founders, mentors and advisers to founders, investors to founders, et cetera) so they are empowering, rather than artificially reductive or prescriptive.
Unhelpful statement → Helpful statement
“You should raise money.” → “There are many reasons to capitalize a business, and many different ways of doing it. Why do you think it makes sense for you? Let’s talk about some of the implications of taking outside finance.” “I think a subscription model would be better.” → “Company X tried a subscription model with Y customer segment, and had Z results. What can we learn from that?”
“You need to be a high-growth company.” → “What do you want your life to look like? What does success mean to you? What does that mean for the kind of company you want to build?”
“As an entrepreneur, you have to sacrifice your personal relationships.” → “What are your priorities? How can you make your business AND relationships work?” “You should cut your hair, you’ll be taken more seriously.” (Not a joke, someone actually said this to me. Sorry, not sorry, my hair is working for me.) → “I like your hair.”
“You need some gray hair, a real business person, on your team.” or “You should get an MBA.” → “What resources do you feel are missing? Let me introduce you to [person] who has lived through this stage of a similar business before.” “You should move to the Bay Area.” or “You should move to China.” → “What do you think the advantages are to being x company in this particular location? How can you use location to your advantage?”
“This would be easier if it was software.” → “What can we learn about your hardware business from software businesses? Is there any part of the business model worth stealing?”
“This would be easier if it was hardware.” → “What can we learn about your software business from hardware businesses? Is there any part of the business model worth stealing?”
“You should start a blog.” → “A blog may or may not make sense for what you’re doing. Let’s brainstorm the different channels you could use to market your company, and determine which add the most value.”
“You should quit.” or “You should never give up.” → “What would it take for you to abandon this idea? What would have to be true to make this unworkable? Is there something you haven’t tried yet that would make working on this sustainable?”
“This won’t work.” → “I see some misalignment between your stated goals and the current business model/product/strategy.”
The truth is, the entrepreneur is the one who must build their business, brick by brick. They are the ones that live with the consequences of their decisions. Advisers and mentors are, in an experiential sense, merely spectators. So, founders don’t need to do anything. They are the designer of their experience. If someone tells a founder they should do something, they are implying they know better than the founder why they started the company, and what success means to them.
These may seem like simple reframes, but they can be the difference between helping entrepreneurs build a growth mindset vs. a fixed mindset about how to develop their company and themselves as people. They also reveal a truth about building a company, and how we as advisers can truly add value.
So, how can we help? How can we avoid causing harm? Here are some guidelines that we follow at Investable:
We help them develop their sense of agency and self-determination. There is no right and wrong or better and worse in startups. These are just value statements, with little basis in each entrepreneur’s personal experience. And you telling them anything is wrong is not doing them any favors, it is just you reifying some belief that you hold about the world.
We celebrate the craft of struggling with and navigating ambiguity. Resist telling founders what you think they “should” do, and rather encourage them to ask themselves hard questions and test ideas. Give them the chance to develop the ability to navigate ambiguity and make hard choices for themselves, and you will be giving them the gift of building a growth mindset. Again, Carol Dweck on kids (but the approach generalizes):
“…[W]e can praise wisely, not praising intelligence or talent. That has failed. Don’t do that anymore. But praising the process that kids engage in: their effort, their strategies, their focus, their perseverance, their improvement. This process praise creates kids who are hardy and resilient.” — Carol Dweck, “Mindset”
We help them understand their options. What implications might their decisions have? Are there companies, teams, or founders you know that have lived through a dilemma they are facing? (Spoiler alert: yes). Help them see that similar companies have run countless experiments that they can learn from. Sometimes companies we work with realize they can get to the outcome they are seeking with $150,000 instead of $500,000, which is the equivalent of instantly raising $350,000 (without actually raising any money).
We help them fall in love with risk. Help them clarify their assumptions, build their risk identification muscle, and learn how to be comfortable looking for and leaning in to the things that could kill their business.
We help them see how to scale personally. Often, the act of building a business (like creating a work of art, writing a novel, or running a marathon) necessitates becoming an entirely different person. Similarly, by scaling themselves to meet the demands of their business, founders often fundamentally transform who they are. This is a scary process, and one where support can make all the difference. Entrepreneurs face a daunting path, but there is good news. It takes a village to raise a startup, and we are all part of the community that will support them as they grow themselves, their teams, and their ventures.
The statements you make reinforce a narrative, which can tell either an empowering or disempowering story.
So, I invite you to use your words to create new possibilities. Let’s help founders free themselves from other peoples’ stories, and define and live into their own version of success.