Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

Should Entrepreneurs Lie?

blogs.hbr.org

Post reply on HN
Print view View original

41–50 of 54 posts

Re: Should Entrepreneurs Lie?

#41

Post by bootload »

pw0ncakes wrote: post #5
edw519 wrote: post #2

No. Especially if you're a software entrepreneur. Even more so if you're an internet entrepreneur. We don't make products that our customers can touch and feel. We make ones and zeros. All our customers have is trust and implicit promises from us. Lie and we have nothing.

What about this scenario? VC wants to know how much interest there is in your company. You claim to have 3 leads from other VCs although you have none. IMO there is nothing wrong with this lie, because it doesn't lead anyone to make a bad decision. If you're a good investment, you get funding faster and on better terms. If you're a bad investment and the VC is any good, you'll get rejected even if you have 1000 leads…

"... IMO there is nothing wrong with this lie ..."

A truthful man is the hard to compromise. A man who is not greedy is the hardest to scam.

Re: Should Entrepreneurs Lie?

#42

Post by techiferous »

People lie because they want more power in a social situation. In the "$10 million of VC investment" scenario, lying about the multinational customer gives the entrepreneur more power than he otherwise would have had in the deal with the investor. An investor-entrepreneur relationship works best as a collaboration. So why would you want to start that relationship with an obvious power play against your would-be investment partner?

Re: Should Entrepreneurs Lie?

#44

Post by rhettinger »

Hopefully, this article will be counter-balanced at some point by discussions with successful entrepreneurs who had open, candid, and honest relationships with their VCs and customers. In my experience, telling the truth builds relationships and lets people focus on problem solving.

If being honest with your VC means losing funding, it may still lead to funding of another, more viable idea.

Re: Should Entrepreneurs Lie?

#45

Post by stretchwithme »

wisty wrote: post #39
grellas wrote: post #25

Hyping, shading and puffing are normal in entrepreneurial circles and, properly limited, are probably expected to some degree. People discount the statements accordingly. Misrepresenting material facts or omitting to disclose something major (like the loss of your major customer the day before a funding) constitutes securities fraud and can get you in a heap of trouble, notwithstanding how it may have worked out in a…

Another test is: Would the victim be annoyed if they found you had lied? I doubt a VC would get annoyed at inflated sales forecasts (they know it's part of the game), but they would be annoyed if you lied about the feasibility of your project.

I think the best VCs appreciate an entrepreneur who is able to squeeze all possible value from the available facts without resorting to deception.

The sharpest people can back up everything they say. Avoid making ridiculous claims and you appear smarter.

Lying is often an indicator of laziness and a lack of the right kind of creativity.

Re: Should Entrepreneurs Lie?

#46

Post by stretchwithme »

grellas wrote: post #25

Hyping, shading and puffing are normal in entrepreneurial circles and, properly limited, are probably expected to some degree. People discount the statements accordingly. Misrepresenting material facts or omitting to disclose something major (like the loss of your major customer the day before a funding) constitutes securities fraud and can get you in a heap of trouble, notwithstanding how it may have worked out in a…

who wants to go through always having to look up when the maitre de calls out "scumbag. party of two. scumbag."

Re: Should Entrepreneurs Lie?

#47

Post by techiferous »

techiferous wrote: post #40
huherto wrote: post #12

Everybody lies. But you have to be careful since your reputation is very important.

"Everybody lies." Gandhi.

I'm not sure why this is being downvoted. I'm pointing out that it's simply not true that everybody lies, at least not in the "intentional misrepresentation of facts" sense. Anyone who has studied the life of Gandhi knows that he would've never materially misrepresented a fact to anyone.

Re: Should Entrepreneurs Lie?

#48

Post by lsc »

If you leave aside the moral/ethical issues (which are very real, and which we each need to deal with for ourselves.) the usual rules of marketing apply; do you expect word of mouth? do you expect repeat business? If so, a reputation for dishonesty is going to kill the rest of your marketing.

(Of course, if you expect to encounter each customer once and only once, and if you don't expect your customers to talk to potential customers, the rules are clearly different, and you are mostly back to the ethical question I glossed over.)

Re: Should Entrepreneurs Lie?

#49

Post by lsc »

pw0ncakes wrote: post #14
edw519 wrote: post #8

Earlier quoted context omitted.

Smart people realize that everyone has issues of one kind or another. Just tell the truth. Most of your past transgressions will get you a free pass. Lieing about them won't. IMO there is nothing wrong with this lie You've just self-identified yourself as a person to avoid doing business with.

Most of your past transgressions will get you a free pass. It depends. Transgressions that reflect immature judgment and make for funny stories you can tell, especially if they're more than a few years old. Failures that reflect on you as a person of low status you cannot. If you have a rocky past, you want to paint your past self as someone who hadn't settled down yet and decided what he wanted from life, not as a h…

I obviously don't know if you are correct or not; I didn't go far enough down the investment path to find out.

However, if you are bootstrapping, this is definitely not correct. Your customers don't care that you don't have a 'high status' background or how 'alpha' you are.

Re: Should Entrepreneurs Lie?

#50

Post by lsc »

pw0ncakes wrote: post #19
maxharris wrote: post #17

Earlier quoted context omitted.

"most people can't be trusted with the truth, and it's necessary to lie to them" This is disgusting. You need to learn to respect yourself; this in turn will help you respect others.

I took out "most". That was far too strong a statement. I respect myself. However, I'm aware of human nature as it actually is. Most people don't even like the truth. They despise the reality around them and need to be fed a fiction in order to function. The facts-- that good people often fail for varying reasons, that life is inherently unfair and often dark-- are so disquieting to them that they shut them out. This…

the problem with

"If I feel that this is not the case, or become isolated, I'll jump ship on a dime. Also, if I'm ever passed over for a plum assignment that is within my capability, I'll launch my resumes that afternoon."

is not that you will leave if your needs aren't being met; that is expected in any relationship. The reason why that raises a red flag is that it implies that you won't take action to educate yourself, and to create new interesting projects for the company if they aren't fed to you, to go and make contact with other team members if you feel isolated.

Seriously, I don't want to hire someone who wants to be a passive vessel. I ain't your daddy. I want people who will go out and get cool shit done. Sure, I'm okay hiring someone who has potential but not experience, and helping them get that experience, but I want them to be an /active participant/ in the exercise, not some passive vessel.

Post reply on HN