It takes a special kind of person to be an entrepreneur. An entrepreneur exudes confidence and is by nature highly motivated. The results can be inspiring, producing some of the greatest inventions and innovations that improve our lives every day. But sometimes, the unique qualities that drive greatness can lead to some interesting behaviors — one of the most common (and endearing) being the extreme optimism with which they approach the world. (Believe me, I know — I was once in their shoes.)
This comes through in spades in many of the pitches we hear. In fact, there are six phrases we hear repeatedly from entrepreneurs — our sweet spot is Enterprise IT — that automatically set off alarms. This is intended in a sincerely light-hearted manner, but perhaps also as a heads up. They are:
“These projections are conservative.” Ninety-nine percent of the time those same financial projections turn out to have been overly aggressive. In reality, we don’t obsess about the exact numbers that are presented to us; we care much more about the thinking that went into producing the projections.
“The market is enormous for this.” It’s easy enough to create a spreadsheet showing huge market estimates. But often there is no market — yet. Or there is no proof that there will be one. A huge task for any start-up is cultivating the market so that the potential is fulfilled.
“Look at these great customers who have expressed interest in buying our product.” These can be very impressive lists, but unfortunately they are often dominated by early discussions rather than companies lining up to write a check. It’s usually a long, painful road to close those early lighthouse customers.
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