Entrepreneurs Don’t "Noodle" They Do

Posted on Feb 4, 2010 | 93 comments


man thinking

This is part of my series on Entrepreneurial DNA that was originally published on VentureHacks.  I know this series has been running for a while (and is getting long in the tooth) – I promise it’s nearly over.  I started with a “top 11″ list – only because I couldn’t fit them into a top 10.  But in the end I ended up with 12.  So only two more after this.

I’m not anti VC.  Obviously.  I am one.  But there are a lot of things that become norms in the VC industry that always drove me crazy from entrepreneur’s side of the table.  They still do.  One of them is when VCs say, “I’d like to ‘noodle’ on that for a while.”

Translation for any first time entrepreneurs can mean one of:

a. I’m not interested but it’s easier to say than “no”

b. I’m not really sure whether I’m interested, but if you suddenly get a lot of “traction” I’d love for you to see me soon

c. I’m super busy with other stuff.  I’d love to spend time thinking about whether your business would be successful, but I’m not gonna.

In short, Noodle = No.  I’d love it if VCs gave more honest and direct feedback.  But I’m totally off topic.

In the VC industry you can’t take daily actions.  It’s our job to say “no” 99.9% of the time.  Literally.  That’s the one thing that sorta sucks about being a VC because nobody enjoys saying “no” all the time but we have to.  Right before I got into the industry I was at a cocktail party in Palo Alto and spoke with James Currier, the founder of Tickle and a former VC for Battery Ventures.  He said that as a VC he really struggled to have a job where he had to say “no” all the time.  So he left and focused on starting companies.  I get that.  As an entrepreneur you’re used to being optimistic and finding a way to make things work despite the odds.

But as a VC you simply can’t do the majority of deals you look at.  So our job is to think a lot about things but not to take action on most of them.  When looking at new deals we analyze, consider, contemplate, talk to colleagues, go to conferences, reference check, triangulate, debate and … noodle.  Mostly we say “no” a lot.

That’s not you or you’re dead.  In an entrepreneur I need to see the anti VC character.  You need to be “The Decider.”  OK, maybe not.  But you need to be uber decisive.

10. Decisiveness – As I’ve said previously, being an entrepreneur is about moving the ball forward a few inches every day.  What astounded me when I switched from being a big company executive to being an entrepreneur was the sheer amount of decisions I had to make on a daily basis.  The minutiae.  Some of it incredibly important.

The decisions sound so basic when you’re not the one having to make them.  Should you go with Amazon Web Services (AWS) or have your own servers hosted at RackSpace?  Should you build in Ruby, Java or .NET?  Should you sign a 2-year lease or rent month-to-month?  Should you hire an extra developer now or a business development resource?  Should we take angel money or just go for a seed round from a VC?  Is venture debt a good idea?  Should we launch at TechCrunch50?  Should we charge for a product or offer fremium?  Should we ask for a credit card up front or after their free trial?

It never ends.  And there is no such thing as a startup decision with complete information.  The best entrepreneurs have a bias for making quick decisions and accept that at best 70% of them will be right.  They acknowledge that some decisions will be bad and they’ll have to recover from them.  Building a startup might be a game of inches but you don’t get timeouts to pause and analyze all of your decisions.  As I’ve posted about before: my startup motto is JFDI (think Nike).

And it is so easy to spot entrepreneurs who struggle to make these decisions.  They’re slow to hire new staff.  They’re slow to fire even when a person isn’t performing.  They lollygag on deciding whether to raise money, how much and from whom.  They are reluctant to quit their day job and jump in head first.

I was recently considering investing in an entrepreneur in Silicon Valley.  He was deciding between taking another senior role at a prominent Silicon Valley tech company or starting his own business.  I told him I didn’t think he needed any more resume stuffers and now was the time to go do something big on his own. It was time to earn! Within a week he had me a deck with a strategy for a new company.  He offered to fly down on 24 hours notice and meet with my partners (which he did).

He then booked tickets to China to talk with suppliers and he promised to revise his strategy by the time he got back.  He is getting stuff done in entrepreneur years which is a step change faster than dog years.  The next time I spoke with him he had a customer order for $125,000 – and he doesn’t even have a product built!

But I have the feeling by the time we speak again he’ll have made so much progress that he’ll question whether he should take my money.  I’m certain he will have talked with other funding sources.  This is how it should be.  (If he reads this he’ll know that I’m still open to being an angel investor ;-))

If you’ve been “thinking about doing something” for a long time and batting this idea around with your favorite VC for six months to a year, don’t be surprised if they’re not prepared to back you in the end.  VC’s understand the difference between the way their job function works and the way yours does.   Entrepreneurs don’t “noodle” they “do.”

  • Aviah Laor

    :), that was kinda joke.

  • http://reecepacheco.com reecepacheco

    “Make errors of commission, rather than omission.” We heard that one from our coach all the time. Great advice.

  • http://twitter.com/davidsmuts David Smuts

    Liked your intro into this post here Mark. Got me thinking about how Entrepreneurs should deal with NO because they're going to hear that a lot! I think there a lot of different NO's Entreperenuers will hear from VCs and investors; some may be the kiss of death (such as no confidence in the captain/team) and some may be a blessing (they can help you improve).

    Would you agree that most of the NO's you give are because the companies are just too early (not enough traction?) or the market isn't big enough? Would be interested to learn from your experience, what are the most common reasons you have for saying NO.

    Would make for an interesting post – an analysis of the common NO's and how they are often communicated (sometimes clearly, sometimes not) and how Entrepreneurs can deal with/learn from/overcome/adapt etc.., following one of these types of NO.

  • http://arnoldwaldstein.com awaldstein

    Mark

    Thnx for this this post.

    It is perfectly crisp and articulates why I choose to be operational in my investments and advisory positions.

    You knew of course when you wrote “being an entrepreneur is about moving the ball forward a few inches every day” you were channeling the great inspiration Al Pacino speech from “Any Given Sunday”.

    http://www.youtube.com/watch?v=WO4tIrjBDkk

  • http://www.victusspiritus.com/ Mark Essel

    Now you've got to hustle to close that deal Mark, stop Noodling and JFDI. This type of mover isn't going to wait.

    Great post, but way to tear down founder ego. A flight to LA and then China would bankrupt my wedding.
    My real question, does this founder exist, or did you make him up?

    And do you think your ideal readership is VC or founder?
    *update* I got this one answered: both

  • http://arnoldwaldstein.com awaldstein

    Great speech in my opinion!

    I quoted in below in an earlier comment

  • http://www.ninjahit.com/ Alain

    Nice, love the post. Great humor.

  • Aviah Laor

    But seriously, there is an irony here of a very popular blog that discusses attributes of the 0.01%. So the common wisdom that 90% of people think that they are above average probably applies here. Naturally, the chances of a zero to 100M$ in a few years are small, and they are rare even among the 0.01% that do get the VC yes.
    Having said that, it's not all startup-VC-IPO. Although we are still fixed on that theme(it's a young industry), we are quickly moving to a point where it's perfectly legit and reasonable to grow a web based business the same way people started business for centuries. An average business. And your blog is a great resource for every business, so thanks for that.

  • http://www.victusspiritus.com/ Mark Essel

    So Net is the gent? pardon my asking above then if so

  • http://www.victusspiritus.com/ Mark Essel

    That's a damn good question. Love it when a comment makes reading a post even more worthwhile.

  • http://blog.botfu.com Kevin Marshall

    This entire series of posts has helped me realize two things:

    1. You are exactly the type of VC/person I would want in my corner, giving it to me straight, and helping to focus/direct my business

    2. No matter how great or far ahead of other 'startup' people I think I am, I still suck. Always more I could be doing better…

  • Aviah Laor

    The inches we need ARE EVERYWHERE around us…

  • http://twitter.com/PhilipHotchkiss Philip Hotchkiss

    I can imagine. Saying no 99.9% of the time has to be tough, but I'll bet it's even tougher when you really wanted to say yes early in the startup relationship but diligence uncovered stuff that knocked it out of the box.

    Piggy backing on this thread-how do you find the intensity level being a VC vs. the intensity/heroic efforts etc. that were required when you were a startup entrepreneur?

    This would be a great subject for a blog post-contrasting both sides of the table through this lens.

    As always, thanks Mark for not only the great posts, but for the conversation.

    Phil

  • http://bothsidesofthetable.com msuster

    When I started my first company I tried to run it like a democracy because I came for a “collegiate” consulting firm. Startups are NOT democracies. Nor is Facebook.

  • http://bothsidesofthetable.com msuster

    Thank you. I'm always worried that I write too long. I didn't elaborate on this one because I had already written JFDI and thought it was the same thing. I appreciate the feedback.

  • http://bothsidesofthetable.com msuster

    If you go in thinking you'll take decisions at the last available moment I think you already have the wrong ethos. I understand why intellectually it obviously makes sense – I just don't happen to agree with it in practice.

  • http://bothsidesofthetable.com msuster

    100%

  • stevepelletier

    Mark-
    Another good one. And by the way, congrats on being voted the 2nd most popular VC! http://www.techcrunch.com/2010/02/02/most-loved

    I believe that entrepreneurs need to have (at least) two mindsets. First, they must be able to process incomplete info and quickly make decisions on issues that concern every functional area of the business (e.g. HR, operations, product, marketing, etc.). As you point out, this can mean deciding on a new hire, a new lease, acceptance of a sales order, etc.

    But entrepreneurs also need to be able to noodle on things that are more strategic and require a more measured, thoughtful contemplation before jumping into action. These types of decisions can include long-term product vision, strategic partnership opportunities, and perhaps even funding. When these decisions are made without proper analysis they can lead to an organization that chases its tail and ends up with a lot of nothing.

    Steve

  • http://twitter.com/johnnyfontana John Fontana

    Thanks for the input. Going back to product release. Do you think it matters more if you are a well established company and don't want to jeopardize your brand at all just to get a product out?

    I think Chris Brogan said in “Trust Agents” that as long as you stick with your values and core competencies, even if the product isn't great it won't harm your brand because it will still be in line with everything else you have. Agree?

  • http://twitter.com/johnnyfontana John Fontana

    Roman,
    I definitely get what your saying and agree with you on some level about saying “just make a decision”, but don't you feel that is a bit risky especially with a startup? Obviously you know and trust your employees, but at the early stage even a small mistake can dramatically hurt your brand. Like you said you might only get 10% right so you have to make sure that the 90% mistakes don't kill your brand to the public eye.

  • http://arnoldwaldstein.com awaldstein

    Great speech in my opinion!

    I quoted in below in an earlier comment

  • http://www.ninjahit.com/ Alain

    Nice, love the post. Great humor.

  • Aviah Laor

    But seriously, there is an irony here of a very popular blog that discusses attributes of the 0.01%. So the common wisdom that 90% of people think that they are above average probably applies here. Naturally, the chances of a zero to 100M$ in a few years are small, and they are rare even among the 0.01% that do get the VC yes.
    Having said that, it's not all startup-VC-IPO. Although we are still fixed on that theme(it's a young industry), we are quickly moving to a point where it's perfectly legit and reasonable to grow a web based business the same way people started business for centuries. An average business. And your blog is a great resource for every business, so thanks for that.

  • Aviah Laor

    The inches we need ARE EVERYWHERE around us…

  • http://bothsidesofthetable.com msuster

    When I started my first company I tried to run it like a democracy because I came for a “collegiate” consulting firm. Startups are NOT democracies. Nor is Facebook.

  • http://bothsidesofthetable.com msuster

    Thank you. I'm always worried that I write too long. I didn't elaborate on this one because I had already written JFDI and thought it was the same thing. I appreciate the feedback.

  • http://bothsidesofthetable.com msuster

    If you go in thinking you'll take decisions at the last available moment I think you already have the wrong ethos. I understand why intellectually it obviously makes sense – I just don't happen to agree with it in practice.

  • http://bothsidesofthetable.com msuster

    100%

  • http://twitter.com/JohnnyFontana John Fontana

    Thanks for the input. Going back to product release. Do you think it matters more if you are a well established company and don't want to jeopardize your brand at all just to get a product out?

    I think Chris Brogan said in “Trust Agents” that as long as you stick with your values and core competencies, even if the product isn't great it won't harm your brand because it will still be in line with everything else you have. Agree?

  • http://twitter.com/JohnnyFontana John Fontana

    Roman,
    I definitely get what your saying and agree with you on some level about saying “just make a decision”, but don't you feel that is a bit risky especially with a startup? Obviously you know and trust your employees, but at the early stage even a small mistake can dramatically hurt your brand. Like you said you might only get 10% right so you have to make sure that the 90% mistakes don't kill your brand to the public eye.

  • http://richineverysense.blogspot.com/ scheng1

    I think that is the key difference between an employee and a businessperson. Employee has to say yes most of the time. And the boss always says no.

  • http://twitter.com/PhilipHotchkiss Philip Hotchkiss

    I'd throw in another important element. Entrepreneurs need to move fast, they need to iterate intensively, but they also need to take a breadth at times (time measured by hours or days) and make sure that they've paid enough attention to the 'aim' portion of 'ready, aim, fire'.

    Startup entrepreneurs are hyper-action oriented-a very necessary trait. But, too often, if the 'aim' portion of JFDI is skipped, underweighted, or self-deluded, bad things happen despite a relentless series of JFDI decisions.

    My experience as an entrepreneur, and having advised and listened to a lot of pitches from entrepreneurs, is that too often it's not a lack of ability to make a decision, it's the lack objective effort applied to the 'aim' portion of the process. And by 'aim', I'm not talking about rifle accuracy here, shot gun will do;)

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  • http://richineverysense.blogspot.com/ scheng1

    I think that is the key difference between an employee and a businessperson. Employee has to say yes most of the time. And the boss always says no.

  • http://twitter.com/PhilipHotchkiss Philip Hotchkiss

    I'd throw in another important element. Entrepreneurs need to move fast, they need to iterate intensively, but they also need to take a breadth at times (time measured by hours or days) and make sure that they've paid enough attention to the 'aim' portion of 'ready, aim, fire'.

    Startup entrepreneurs are hyper-action oriented-a very necessary trait. But, too often, if the 'aim' portion of JFDI is skipped, underweighted, or self-deluded, bad things happen despite a relentless series of JFDI decisions.

    My experience as an entrepreneur, and having advised and listened to a lot of pitches from entrepreneurs, is that too often it's not a lack of ability to make a decision, it's the lack objective effort applied to the 'aim' portion of the process. And by 'aim', I'm not talking about rifle accuracy here, shot gun will do;)

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  • http://sleeprun.tumblr.com/ sleeprun

    There are a couple of perspectives on this. One is that there is, effectively, little real way to pre-determine demand for an offering so acting is the best test. However, action, is very expensive in terms of resources, energy and money. Being cannon-fodder is never a good idea.

    This leads to a far more problematic side of the entrepreneurial personality – dopamine receptor deficit. It is likely that entrepreneurs are born with less ability to calm and sooth themselves then normal folks so seek out continuously stimulating activities to artificially and externally boost the dopamine in their brains. Dopamine is our feel-food neurotransmitter. I won't get into the neurology of this. This behavior can be socially rewarded, fun, cool and charismatic. It can also lead to extremely wasteful activities, impulsiveness and expenditure of energy. The fact that effectively all new ventures fail is bleak testament of the consequences. The social and personal toll can be tragic as well.

    Being driven by dopamine is never a good idea, it is the basis of all addictions. So acting vs. thought is a cool sounding macho idea but likely just bravado masking much tougher realities.

    A recent vid by a very successful scientist gave his lifetime advice as “I wish I'd dumped most of my projects earlier.” In fact, entrepreneurs may be exactly the wrong people to start new ventures because of this brain disorder.

  • http://sleeprun.tumblr.com/ sleeprun

    There are a couple of perspectives on this. One is that there is, effectively, little real way to pre-determine demand for an offering so acting is the best test. However, action, is very expensive in terms of resources, energy and money. Being cannon-fodder is never a good idea.

    This leads to a far more problematic side of the entrepreneurial personality – dopamine receptor deficit. It is likely that entrepreneurs are born with less ability to calm and sooth themselves then normal folks so seek out continuously stimulating activities to artificially and externally boost the dopamine in their brains. Dopamine is our feel-food neurotransmitter. I won't get into the neurology of this. This behavior can be socially rewarded, fun, cool and charismatic. It can also lead to extremely wasteful activities, impulsiveness and expenditure of energy. The fact that effectively all new ventures fail is bleak testament of the consequences. The social and personal toll can be tragic as well.

    Being driven by dopamine is never a good idea, it is the basis of all addictions. So acting vs. thought is a cool sounding macho idea but likely just bravado masking much tougher realities.

    A recent vid by a very successful scientist gave his lifetime advice as “I wish I'd dumped most of my projects earlier.” In fact, entrepreneurs may be exactly the wrong people to start new ventures because of this brain disorder.

  • http://www.nuiteq.com/ Harry

    Insightful, thanks!

  • http://www.nuiteq.com/ Harry

    Insightful, thanks!

  • premierinterns

    Great article. It sounds like the VC's say no just to say no, however, I could be wrong. My business partner and I are first time entrepreneurs and articles about other entrepreneurs making it is what allows us to have the JFDI attitude. I've always been that type of guy but now I have a lot on the line being that I'm in a venture with a partner. With hard work, we hope to be in your position one day, however, I do get some excitement creating a venture and seeing it grow. Awesome article.

  • premierinterns

    Great article. It sounds like the VC's say no just to say no, however, I could be wrong. My business partner and I are first time entrepreneurs and articles about other entrepreneurs making it is what allows us to have the JFDI attitude. I've always been that type of guy but now I have a lot on the line being that I'm in a venture with a partner. With hard work, we hope to be in your position one day, however, I do get some excitement creating a venture and seeing it grow. Awesome article.

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  • jeffsolomon

    What is your take on being tactical vs. being strategic? If entrepreneurs are “doers” then are they also more tactical than strategic? Or are they just tactical then strategic? Or are they both?

  • jeffsolomon

    What is your take on being tactical vs. being strategic? If entrepreneurs are “doers” then are they also more tactical than strategic? Or are they just tactical then strategic? Or are they both?

  • jeffsolomon

    What is your take on being tactical vs. being strategic? If entrepreneurs are “doers” then are they also more tactical than strategic? Or are they just tactical then strategic? Or are they both?