Last week, I was catching up with an entrepreneur, and he shared with me that he kept receiving the same advice over and over again. However, after digging deeper and analyzing it from a first-principles perspective, it just didn’t make sense. We talked more and tried to delve deeper into it, and it became clear that there was a difference of opinion between what the entrepreneur believed and the commonly accepted advice he was receiving.
This reminded me of the early days of Pardot when our business was two years old. Things were growing fast; we had over $1 million in recurring revenue, and everyone kept telling us to go raise venture capital. Not knowing any better, we talked to investors in Atlanta, Washington D.C., Boston, and all over California in an effort to raise money. We had dozens of meetings, were on numerous flights around the country, and in the end, we received two offers. When we analyzed the numbers and plugged them into some spreadsheets, we realized it didn’t make sense to raise money. We were growing fast, had great gross margins, and especially with the valuations at the time, it just didn’t add up. We were better off growing organically at the rates we were and controlling our own destiny.
Once an entrepreneur raises money, it’s almost impossible to unwind it. But for entrepreneurs who haven’t raised money or have only raised friends-and-family money, the ability to control one’s own destiny is incredibly valuable. Ultimately, we chose not to raise money for Pardot. We kept growing the business and had a great exit three years later.
My advice to entrepreneurs, when they receive repeated advice on more material topics, is to question it. Peel back the layers, understand who is saying it and why they’re saying it. Do they have an agenda? What’s their personal experience been? Work hard to see if that aligns with the goals and dreams of your own company. While most of the time, advice will likely resonate and be applicable, there’s a chance that serious recommendations, when critically examined, may not be good advice for your own business. Always question the repeated advice from experts.
Entrepreneur
via https://www.aiupnow.com
David Cummings, Khareem Sudlow
