Most popular posts
- What makes great boards great
- The fate of control
- March Madness and the availability heuristic
- When business promotes honesty
- Due diligence: mine, yours, and ours
- Alligator Alley and the Flagler (?!) Dolphins
- Untangling skill and luck in sports
- The Southeastern Growth Corridors
- Dead cats and iterative collaboration
- Empirical evidence: power corrupts?
- A startup culture poses unique ethical challenges
- Warren Buffett and after-tax returns
- Is the secret to national prosperity large corporations or start-ups?
- This is the disclosure gap worrying the SEC?
- "We challenged the dogma, and it was incorrect"
- Our column in the Tampa Bay Business Journal
- Our letter in the Wall Street Journal
Other sites we recommend
This article from the Wall Street Journal’s Business Insight report offers advice to entrepreneurs on how to establish trust and credibility.
The authors (Quy Huy and Christoph Zott) suggest that oftentimes an entrepreneur becomes so focused on getting his product or business ready that he neglects the little things that can exert out-sized influence on the “selective recall” of customers, vendors, and potential investors. (E.g., a polished website, personalized thank-you notes, small gifts, nice office space.)
It’s a fair point, and true as far as it goes. However, we also see no shortage of products and businesses that could be greatly improved with tighter focus. One particular conclusion resonated strongly with us and is applicable for the duration of any successful Long Term Relationship, whether referencing the product, business, or the little things:
To be effective, each of these actions must be underpinned by authenticity.
In other words, only promise what you can deliver.
We’d offer one final caveat on the advice offered by Huy and Zott: an entrepreneur might impress some unsophisticated investors with a “tony” office location, but institutional venture firms get worried when they see expensive office space and upscale surroundings. The best entrepreneurs watch every penny, and your venture partner, if you go that route, won’t care where your office is or what it looks like as long as it is tidy and has what you need to run the business. We know of more than a few examples where venture capital firms passed on opportunities where the “surroundings” were top shelf but the company was still losing money. You can be sure that when the venture capitalists perform their due diligence, they won’t be focused on your office space.