In October I provided this list of statements that indicate that a CEO is clueless:
1. “Let me tell you why the Sequoia memo really doesn’t apply to us.”
2. “Our team is totally engaged and believe in the company.”
3. “Our market is so large that a 20 percent reduction won’t matter to us.”
4. “We aren’t changing our long-term strategy because this is a short-term problem.”
5. “It’s still too early to tell if we’ll be affected.”
6. “The sales pipeline that we’ve already booked is still strong.”
7. “The start of sales results is just around the corner.”
8. “We can accelerate revenue with a few tweaks to our product.”
9. “We can reduce expenses without affecting headcount.”
10. “Our investors are totally engaged and believe in the company.”
11. “We think we can raise another round right after the holidays.”
12. “We heard that our competitors are in trouble, but we’ve been more conservative with expenses.”
13. “We have twelve months of cash even with our most conservative sales forecast.”
14. “In these times, (Some Big Company) needs what we offer to increase sales.”
15. “In these times, (Some Big Company) needs what we offer to reduce costs.”
16. “We’ve built an extremely viral product so we can reduce our sales and marketing expenses.”
Today, I am providing a list of what you should say to your employees as a small business owner and entrepreneur. These statements indicate that you are clueful and on top of things.
1. “I’m assuming we’ll never raise another nickel.” The truth is that unless your company is generating kick-ass revenues, venture capitalists are going to squeeze: on the one hand, they don’t want their investments diluted with outside investors, but they don’t want to give you more capital from their funds. Welcome to tech entrepreneurship.
2. “The marketing budget is now $0, and we will figure out a way to get to market.” Maybe you have more than $0, but if you adopt a much better mindset. How can you use free resources, social media (Facebook, Twitter, Friendfeed, etc) to market your product on a shoestring budget?
3. “Engineering needs to make something so compelling that a $0 marketing budget isn’t a problem.” The pressure isn’t only on marketing—engineering needs to create something so great that the marketing doesn’t matter.
4. “Cash flow, not profitability, is the top priority.” I’m not suggesting that hold a fire sale and dump assets for cash, but paper profitability doesn’t pay the bills. Cash is king, queen, and jack these days.
5. “Do not use the word ‘partnership’ anymore; only ‘sales’ counts.” Unless the partnership forces you to recalculate your Excel spreadsheet, it’s bull shiitake. The only partnership that you should care about either increases sales or reduces unavoidable costs.
6. “Our dental plan is now ‘floss.’” “Our medical plan is now ‘eat fresh fruits.’” “Our health plan is now ‘walk up the stairs.’” “Our cafeteria is Quiznos.” The days of motivating employees with free food, free dry cleaning, and free massages are over. They were nice perks while they lasted, but now survival is the goal.
So how do you stack up against this list?