What Do You Do When An Investor Gives You Bad Advice?
“I knew it! I knew it! I knew it!” I screamed to myself as I walked to my car. I had just gotten the snot beaten out of me by the partners at one of my investors, “Donald Ventures.”
I had been asked to present and update to the partnership by “Raul,” the partner leading the deal for DV. The meeting was a precursor to DV continuing to invest in my company, and now, as I walked back to my car, I felt Raul had just given me horrible advice.
Several days before the partner presentation, Raul suggested that I emphasize a new, low cost pricing strategy we had for a new product family, instead of emphasizing our strategic advantage in performance and power consumption. Raul’s thought process didn’t feel right to me, but I decided to follow his advice despite my misgivings.
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You own every bad decision regardless of who gave you the advice.
And now, here I was in the parking lot of DV screaming at myself for being an idiot for following Raul’s advice. I should have told him I disagreed. I should fought him and done what I thought was right. Instead, like an idiot, I said nothing, and now I was paying the price.
The reality was it wasn’t Raul’s fault I was in this predicament, it was my fault and mine alone.
You’re not a kid anymore. You can’t say, “It was his fault. He gave me the bad advice!”
Good luck with that one.
It’s on you. You’re the CEO, so own it.
You’re only going to get one chance to be a startup CEO.
For years, Hall of Fame Football coach John Madden had a fifteen minute radio segment on KCBS in San Francisco. I used to time my drive to work to listen to him.
Sometimes Madden would talk about football. Sometimes Madden would talk about baseball. Sometimes Madden was just funny and entertaining.
However, every once in a while, there would be a nugget of universal advice Madden would provide. Even though Madden dropped this nugget over twenty years ago, it still stays with me to this day.
Madden was talking about how he became the youngest head coach in professional football at the age of 32. I’m paraphrasing, but he said something like, “I decided that I had one chance to be a head coach, so I was going to do things my way.”
Well, Madden’s way allowed him to be the head coach of the Oakland Raiders for ten seasons with a record of 103 wins and 32 losses and 7 ties. During that time the Raiders won one Super Bowl. Madden was elected to the pro football hall of fame in 2006.
The point I’m making is obvious; you need to be true to yourself as a startup CEO.
When I look back at my time as CEO, my regrets are all about taking advice from people I respected even though I knew the advice wasn’t the best advice. Oh, how I wish I hadn’t listened to Raul before that fateful meeting.
After that meeting, Donald Ventures pulled their support for our next round of funding. This led to a yearlong fight to save our company as Donald and Raul blocked every term sheet we received.
I don’t know whether it would have changed the result, but I wouldn’t have any regrets.
I wasn’t true to myself.
Be true to yourself. Don’t follow advice that you don’t agree with, no matter who gives you the advice.