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Creative Financing for Your Startup

Startup Lessons From Elite Entrepreneurs

But, the game’s out there, and it’s play or get played. That simple.

                                                                 – Omar Little, HBO’s The Wire

Have you ever found yourself wondering how your startup got dropped so quickly by the competition and was made to “eat their dust”? If so, then read on.

However, before you do that here are two important points about this piece:

  • - Please be forewarned that if you are one of those people who becomes morally outraged over everything, don’t read this. It will send you into fits.
  • - We are only going with legal tactics here although the ethics of some of these tactics maybe contentious for some.
Elon Musk on the cover of Inc magazine.

Elite Entrepreneurs play by their own rules.

Those familiar with the history of this site will recall that the original Smart Startup Guide was the product of interviews with elite fast growth company founders found on the annual Inc 500 lists. They began when I was working as a management consultant and looking for ways to help technology startups launch when capital was scarce. I was then introduced to an entirely different level of how the game of entrepreneurship is played. It was an eye-opener back in the late 1980s. They certainly don’t teach you this in college. Since then Inc 500 founders regularly share their stories and tricks with me. It’s become almost a competition to see who has made the ballsiest move to get their startup launched.

Nota bene: Use the following only if you have a good product or service and can deliver on what you promise! All of these tactics together can’t compensate for a bad product. All that they can do is help your startup get noticed in the crowd.

Okay, with that out of the way let’s get into the fun stuff. Here are a few tactics that the super competitors use to pull ahead of the competition. Think of this as an introduction to entrepreneurial impression management.

- Startups will rent a mailbox at a prestigious address in their city to make it appear as if they are already successful. The rule then is to never meet a client at your own office.
- Another variation of the address trick is to set up international offices in places like London or Shanghai by using a friend or associate’s address and paying him in kind. Small companies in different cities can also collaborate this way.
- You can obtain New York City, San Francisco, or Boston telephone numbers using Google Voice if you are in a flyover state.
- 800 numbers are another fast cheap way to look big if you are B2C.
- Add email contact info for the different departments in your company on the website: sales, operations, HR, public relations, etc. Do so even if you are a one man or woman business.
- Have a photo taken of your team for the website. Invite everyone to be in it: employees, friends, freelancers, family members, the pizza delivery guy. The more the merrier.
- If you rent actual space in a bigger company’s location there’s no need to volunteer the information that only 100  out of 25,000 s.f. are yours. Pulling this one off successfully has a lot to do with main entrance signage and the availability of additional unmarked entrances.
- Back in the late 1990s I worked with Seattle dotcoms and was amazed and horrified by how many startups plastered their websites with the logos of Fortune 500 companies. If asked about the relationship the answer was “They’re in the pipeline. Can’t get into the details just yet.” Once the startup secured bona fide clients the fake logos would be replaced by legitimate ones. (Some of the biggest successes of the dotcom era got started this way.)
- These days a startup can create a successful attractive public image using professional website design, the above tactics, and some social media buzz.

I have more sophisticated examples of these impression management tactics for startups but will leave those for Smart Startup Guide readers.

Finally, if you are skeptical about these tactics actually working, I have two reading recommendations for you. One is a Harvard Business Review article titled “A Test for the Fainthearted” by Professor Walter Kuemmerle and the inside look at the consulting profession by Martin Kihn’s House of Lies. (The television show based on the book is simply dreadful. It has very little to do with the business of consulting and way too much with the private lives of the characters.) Robert Greene also talks about the importance of being a radical realist if you are to succeed.

So there you have it. If you have been left in the dust by competitors even though your offering is just as good, if not superior to theirs, the above may explain why.  Capitalism has gotten even more intense over the past decade due to relentless 24/7 competition brought about by the Internet and globalization.

The rules are there are no rules. – Aristotle Onassis

 

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4 Responses to Entrepreneurial Tricks of the Trade: Fake it Till You Make it – Part IV

  • That’s an eye-opener. My old boss did things like that but I just assumed that he was the only one. It worked for him.

  • Interesting to read about what kinds of stuff people do for their business.

    I also know quite a few people who do this sort of stuff… very successfully too. Personally, I would not feel good about it, so I stay away from these tactics. I am very honest when it comes to my business, even when it bites me in the butt. :)

    But I do believe in faking till you make it in terms of personal development. For example, acting confident when you are not can quickly turn into real confidence based on the feedback you get.

  • Reddit’s founders seeded the community with fake posts by fake users initially. Here’s Alexis Ohanian (his handle is “kn0thing”) commenting on the ruse in an answer on Hacker News: http://news.ycombinator.com/item?id=1337359

    See the other posts in this category. http://antiventurecapital.com/avcblog/tag/fake-it-till-you-make-it/

  • Reminds me of the old quote by Patton.

    “No bastard ever won a war by dying for his country…he won it, by making the other poor dumb bastard die for his” -George S. Patton

    To make the other guy die you have to bend the rules.

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