Devoted to Managers and those that seek to improve their management skills

One of my purposes in writing is to deal with the hype that is endlessly being thrown the way of the business community out there. Anytime I find anything helpful I will throw it your way. 

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The major thing to remember when being pitched opportunities or the endless “next big thing” is to always keep in mind that almost everything is built upon wishful thinking. Does that mean that nothing is ever as it seems? No, just that having a positive attitude while you build a business step by step over a period of time, is one thing, someone saying to you that they are the next Microsoft and their product or service will launch your business into the stratosphere, should be taken with a grain of salt to say the least. 

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Guy Kawasaki gives an excellent list of things that are pitched to him all the time. Keep this in your thoughts as you have so many things thrown at you daily. There are some gems out there that could help you. These insights will give you the ability to sift through the dross to get to the gold. 

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Here are four of the ‘lies’ he says are always told him:

“Our projections are conservative.” An entrepreneur's projections are never conservative. If they were, they would be $0. I have never seen an entrepreneur achieve even her most conservative projections. Generally, an entrepreneur has no idea what sales will be, so she guesses: “Too little will make my deal uninteresting; too big, and I'll look hallucinogenic.” The result is that everyone's projections are $50 million in year four. As a rule of thumb, when I see a projection, I add one year to delivery time and multiply by .1. 

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“(Big name research firm) says our market will be $50 billion in 2010.” Every entrepreneur has a few slides about how the market potential for his segment is tens of billions. It doesn't matter if the product is bar mitzah planning software or 802.11 chip sets. Venture capitalists don't believe this type of forecast because it's the fifth one of this magnitude that they've heard that day. Entrepreneurs would do themselves a favor by simply removing any reference to market size estimates from consulting firms. 

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“(Big name company) is going to sign our purchase order next week.” This is the “I heard I have to show traction at a conference” lie of entrepreneurs. The funny thing is that next week, the purchase order still isn't signed. Nor the week after. The decision maker gets laid off, the CEO gets fired, there's a natural disaster, whatever. The only way to play this card if AFTER the purchase order is signed because no investor whose money you'd want will fall for this one. 

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“Key employees are set to join us as soon as we get funded.” More often than not when a venture capitalist calls these key employees who are VPs are Microsoft, Oracle, and Sun, he gets the following response, “Who said that? I recall meeting him at a Churchill Club meeting, but I certainly didn't say I would leave my $250,000/year job at Adobe to join his startup.” If it's true that key employees are ready to rock and roll, have them call the venture capitalist after the meeting and testify to this effect.  

While these are related to those seeking venture capital, the key thing is to realize that there is an endless array of hype out there that comes from all types of agendas. Money isn’t the only thing people are selling! Make sure your decisions are based upon reality and not somebody else's illusions!