What is the lens with which your feedback or advice is coming from?
A sage piece of wisdom from my mentor Keith Ippel that I continue to find myself applying on a regular basis:
Be mindful of the lens with which your feedback or advice is coming from.
If you ask an investor “How much should I typically expect to dilute for my seed round?”, their response would probably be “20–25%”.
In reality, 15–25% is the typical range. Of course, your goal as an entrepreneur is to dilute as little as possible.
Remember, investors commonly aim to obtain a bigger stake in exchange for their investment. They may give specific advice to nudge you in the direction of their agenda, and even if they aren’t consciously doing so, their perception of the norm may only reflect their perspective and role in the transaction.
Investors often emphasize timing: e.g. The cycle of innovation for any industry is approximately 10-years. If there hasn’t been much innovation or changes in real estate for the past 10 years, it’s probably ripe for disruption.
While that advice is entirely true, and especially relevant if you’re a fellow investor evaluating investment opportunities. It can also be irrelevant. WHY?
Irrelevant for entrepreneurs because timing is something that is beyond their control. Smart entrepreneurs focus instead on variables that they can influence. They create solutions that meet the market in current times or work to create conditions and accelerate factors that encourage adoption of their ideas.
Timing shouldn’t matter to you as an entrepreneur. If you’re discouraged because it’s the “wrong time”, you’re trying to start a business for the wrong reasons. I’ve personally made the mistake of starting a business to try and capitalize on a well timed opportunity — it doesn’t work. The best entrepreneurs I’ve met are the ones who are in business because they have a greater calling, they’re not just in it for the money.
Don’t get me wrong, money IS important. It’s equally important to have a keen eye for opportunities. Because building a business is a marathon, not a sprint, you’ll need to put food on the table, support the people around you, and you absolutely deserve to be compensated for the value that you bring into this world.
However, opportunity, profit, and timing are insufficient. Success comes to those who have persisted long enough in the face of adversity, have reinvented themselves despite setbacks and changes in the market, all while staying true to their mission and ethos of how they’d like to change the world for the better. If you don’t ground yourself in your mission, you and your team are bound to fall prey to shiny object syndrome. Focus is key, don’t be distracted by trends that don’t add value to your business or your customers and their experience.
CREATE the right timing, don’t try to meet it.
*The investor specific examples above may not be the view of every investor.
Understand the lens with which your feedback/advice is coming. This doesn’t only apply to input from investors. Consultants, coaches, mentors…everyone has a bias as skewed perception.