Published in the San Diego Union-Tribune, October 29, 2018
Stand there and do nothing.
That seems like advice that is antithetical to being an entrepreneur. After all, a myriad of quotations suggest that to do nothing is somewhere between sloth and sin. The classic image of the entrepreneur is a woman/man deeply engaged in a 60-hour work week, managing, meeting and maneuvering.
So I am going to offer an alternative consideration and a confession. I am impatient (duh), and so I am inclined toward action — sometimes even if it is in the wrong direction. It is just the idea of doing something that makes the entrepreneur feel like he is achieving, moving the ball.
Recently, I had to wait for an investor to say yes or no — not easy. But I knew that I had to leave the office and essentially go into a cave to avoid picking up the phone or pounding the keyboard. This was the classic stand and do nothing moment, because whatever I was going to do, to relieve the frustration, was going to be adverse to my potential success. There was zero upside to action. Finally, at the end of the day, I couldn’t stand it any longer, and I sent a tentative email to the investor, only to get back — literally at the same time crossing the Internet — the answer, which in this case was yes.
I gave some serious thought to this behavior. As in most things, it is nuanced. I have clients who act impulsively, and I chastise them and put on the handcuffs. I have others who commit the sin of “I waited too long.” So I did my own study — I went to the mall in UTC, and I stood in the central courtyard and also in front of several stores, doing nothing. I just watched people. Wow. You do not have to go to Italy to sit at a cafe and do nothing; you can do it right here. The observation curve is steep. I am not going to tell you that I learned the secret to the universe, but I was certainly “outside myself” and much has been written about the value of that behavior.
Now, let me turn to a true expert, Maynard Webb, who wrote a book, “Dear Founder,” which is a series of letters addressed to “founders.” It is terrific, even if some of the advice is on the obvious side. He makes a point about money that really resonated with me. He says, “you are either in a moment where everybody loves you too much (high valuation) or nobody is willing to give you the time of day, die and pound sand.” Further, he points out that the average funding gives a company about 18 months of runway, and so the clock starts to tick immediately. The day after you close, you have to think about raising money again, in concert with the need to focus carefully and avoid the “noise.”
He also spends some time on the importance of picking a board of directors. This is massively important and many entrepreneurs are stupid in this area. Remember, a director’s key job is to hire and fire the CEO, and removing a director against his wishes is harder than taking out an impacted wisdom tooth.
As always, I have a story. I am involved in a company in which the CEO and his really good old friend are the only board members. As time passes and money gets tight, the CEO goes to his friend and asks him to write another small check. The director says yes, but never funds. Finally, the frustrated CEO wants to remove him and bring on someone else (who is writing a large check). The director is affronted and outraged. Welcome to litigation city. This story happens frequently. It is not an outlier. I am personally on a board and I am unhappy with the way things are going and so I am resigning. They do not need to fire me, but if I were to dig in, it would be messy for sure. Directors often forget how to spell the word “fiduciary.”
Finally, Webb tells his own story about boards. He says to beware the director who talks too much and knows too much, because the guy who is “sitting there and doing nothing” might turn out to be the most valuable.
Rule No. 582
Don’t just do something, stand there.