Say no!

Last month I told you to "say yes", so naturally, I will now tell you to say "no". Or more specifically, when to say "no". Or even more specifically... OK - I know it's confusing.

Opportunistic businesses take potentials and turn them into realities by saying "yes" to almost anything. But few such businesses are really successful because they lose focus. And there are obviously other signs for saying "no".

Some basic "know" situations

Know thyself. That is the real basic. In order to make good decisions you need to know things that you will not do, don't want to do, and that are likely to turn out badly. Here are some examples from my past where I said "yes" and should have said "no":

• I processed an order for a substantial volume of product to be delivered postage paid. That means they would pay on delivery. But I had to manufacture first, ship, and then depend on them to honor their purchase contract. Long story short, they did not, I sued, I won, and won nothing because I could not enforce judgment cost effectively.

• I agreed to a contract with open ended approval on their part, leading to a series of refusals to accept the deliverable which they did not like because of what it said, not because I didn't do the job well. I eventually changed my approach to contracts, having learned this lesson. I will talk about contracts another time though...

• I said "yes" and flew to Europe to give a talk for a hefty fee, but never got paid for the air or the fee. The contract was not large enough to sue over, and I was truly miffed at the time, remaining so today. I will never do business with them again, but they don't really care.

I could probably go on, but it would not help, and I would continue to get worked up over my honesty, their dishonesty, and my lack of sensibility at the time.

Standard approaches

I ultimately came to the conclusion that in order to be successful I would need to take on standard approaches. My contracts were standard, my activities were standard, my payment terms were standard, and my terms and conditions were standard. I turned down gigs now and then when they refused to agree, but I retained my requirements and have not suffered a substantial loss since.

I have a few notions around this that I thought I would share with you:

• First, second, and third impressions: People sometimes have bad days. The first impression is important, but I like to see the second and third as well. As a rule of thumb, I assume that I will get treated as I have been treated. If a company or individual is heavy on paperwork and process, this is what I expect from them in the future, and I compensate for it by price. If people miss appointments repeatedly or are always late, I expect it in the future. I sometimes explain that it is disrespectful and see if that fixes it, but at the end of the day, I manage my own expectations by observing their behavior. If I am unwilling to tolerate it, I will not do business with them.

• Standard, well thought out, well documented: I like to create standard processes. The same thing again and again. It's not that I like boredom or want to do the same thing every day. It's that the process elements, the paperwork, the differences, the repeated explanations, and the related details are killers as volume increases. I create the necessary documentation to support the people I will deal with and increase the standardization of process and documents as I repeat processes. The time I take to do this as I sell more and more of the same thing makes it far more efficient and far better for my customers. It also shows them that this is not my first rodeo and lets them know I do this for others on a regular basis. It makes my responses faster and more efficient, and always keeps the impetus on them to act because I already have. Closing a deal should be simple and direct, not long and complicated. If negotiation gets too protracted for the value it brings, I shut it down by putting a deadline on it and ultimately walking away if it cannot be met.

• Maturity with volume, not ahead of it: At the same time, I don't like to spend a lot of time before I am getting paid for it. If I know I will have to customize something for a client, I generally don't do the customization until they are in fact my client and buying the thing I am customizing. I used to work ahead assuming I might get the gig and preparing for it with lots of effort. But unless I am preparing for a volume business in the same or a closely related gig, it's a waste of time and effort to do things before the contract is in place. I build maturity as the market grows, not in advance of it. This is, of course, very different for a startup or small entity than a large one. If I am making a car for the retail market, I will need to start producing it in volume and it had better be pretty darned mature before it goes for sale. But even then, I will likely do a lot of testing on the prototypes before I finalize and print 100,000 copies of the manual for the glove boxes and train the dealers and repair crews. It's hard to not proceed when you are anxious and ready to go, but you need to learn to say "no" until it's time to say "yes".

Focus and resources

One of the hardest things for a startup or small entity to do is to say "no" to business. Money is knocking and you need to pay the rent. Opportunistic businesses will say "yes" to these opportunities and feel like they are making progress as they build a client base and book of business. But large success is not really made up of a bunch of independent small successes. It comes from a systematic approach to success, generally in a repeatable process that can be taught to and carried out by others.

This was the definition provided to me about 20 years ago by a venture capitalist. He was being truly helpful in telling me and my business partner that our business which would sell millions of customers the same thing would not work that way. And he was right. Ultimately, the cost of customer acquisition killed us. Not just the financial cost, but the cost in time. We needed a better plan and did not come up with one for that business that worked.

There are an unlimited number of ways to succeed. But most of the things you and I might think of have a problem or two that we can only get at by thinking them through. To be successful in a big way means finding things that will scale well.

• If you need to sell something to millions of customers, door to door is unlikely to succeed quickly. You may need sales channels. Signing up channel partners and getting them to work is a specialty that takes time to get going but can produce massive volumes when going well. You may have to say "no" to other plans to spend your resources on this, and it may take a while.

• If you are selling a high valued item, sales cycles take longer. I met an independent salesman for an airplane manufacturer once who said that his sales cycle was about 15 years. And he was on commission! He was going for his second sale after 25 years in the business. Only 5 more years to go and he would have his second sale done - or not. His first sale was for more than $5B and he made several percent on it. Account for the sales cycle in deciding what direction you want to go. Sales are rarely as immediate as you think they will be.

• If you want angel investment, you will likely need to get to $50M in value in 5 years to make the grade. Multiply it all out and make sure your plan will get there. If not, you need a new plan! There are plenty of plans out there, and plenty of adaptations of businesses that turn them from $5M into $50M entities, but you have to think through them or get someone else who will help you do it. It is critical to say "no" to the plans that will not get you there and adapt till you find plans that will succeed to the necessary level.

In summary

This is about "no", or more specifically about focus. In order to succeed at scale, it is critical to be able to evaluate your approaches one after another and in detail and identify a plan that has a good chance of working. Saying "no" to bad plans is critical to success, and saying "no" to distractions is critical to focusing on a plan that will work.