Is Your Company Wearing Ripped Jeans
Is Your Company Wearing Ripped Jeans?
Hiring an employee is, at best, a crap shoot. Interviews are like first dates – everyone is on their best behavior. And people are woefully inadequate at evaluating whether a candidate will be a good employee for the long haul.
To overcome this, employers use “objective” criteria, such as:
Though none are themselves indicators of success, the criteria can help easily identify candidates who don’t meet the minimum requirements. Rather than find the best candidate, they identify the worst of the pool so they can be removed from consideration.*
- Prior work experience;
- Common relationships;
- Communications ability; and
Even though you may not get the job, if you show up in a suit, have great experience and a top level education, you’re not automatically eliminated from consideration. You’re definitely going to be rejected, however, if you show up in ripped jeans and an old T-shirt.
This same process is also used by investors considering your company.
Because they have many choices and often lack the capability to pick winners, investors and customers identify and weed out clear losers based on obvious flaws.
So what are these “ripped jeans” obvious flaws?
Your company must ditch the ripped jeans and put on the suit to be taken seriously. You still might not get the investment. But, without the suit, you may never get to the point of discussing an investment.
- Failing to have an expertise diverse team including business and technical employees, and experienced professionals and industry advisors;
- Founders who don’t know their numbers, their market differentiation or their value proposition (‘We don’t have any competition. Really!’);
- A focus on technology rather than the market and the business case;
- Founders who don’t take advice and mistake arrogance for confidence;
- A multi-billion dollar target market, where the business plan is to ‘get’ 1% market share (i.e., ‘All we have to do is get 1% of this $50B market!’);
- Financial statements that don’t make any business sense (which are always characterized as ‘conservative’);
- Little or no customer interaction (sales, pilots, users);
- Founders with an extreme idea of their company’s value;
- A 97-1-1-1% split of equity among the founders;
- Founders who take unreasonable risks;
- Off-the-Internet, fill-in-the-blank legal documents that make no sense (my personal favorite for obvious reasons); and
- Team members with the same last name as the founder and no prior experience in their job categories.