Editor’s Note: Our instructive humorist, Larry Chiang, is at it again. If you enjoyed 9 VC’s You’re Gonna Want To Avoid, you’ll like this week’s submission, on some all-important business skills no founder could glean from a GSB syllabus. We’re co-sponsoring Larry’s contest to discover the best founder’s skill acquired outside an Ivory Tower. Submit yours at the end.
1) Triple-Threat-Got-Game. Big Ducky (that’s me) thinks the key to success is having as many options as possible. Three is better than two; just as in hoops. Pass. Shoot. Drive. In founders’ terms this means 80% of your time should be spent bringing money in the door — I mean revenue! If founders aren’t money pressured, then VCs will provide better terms (DRIVE). If a founder doesn’t have to sell his biz during a downturn, he can sell it whenever he wants to (PASS). If a founder can sell when he wants, then he can generate a return (SCORE). Willie Sutton robbed banks “cuz that’s where the money is.” He meant, banks have more money than the corner store. Be the ‘bank.’ Them ‘robbers’ will come. (And you know who I’m talking about!)
2) Go ahead, get kicked out of a room. This goes 10x beyond my earlier post, How to Work The Room. For example, I crashed a VIP reception at a headline concert. The band brought up a blind guy who proposed right up on stage for 1000’s to see. She said ‘yes,’ so I rushed the stage from the flank (cuz VIP was beside the stage). I high-fived her and hugged him. Security saw me, remembered me for sneakin’ in, and tossed me. A bank-hosting VP saw it all, and later jocked me. We are now friends and I’ve a good chance to cash the bank’s check, and all because I always ‘work the room’ — especially the rooms I’m not invited in to!
3) Learn to love the word ‘No.’ I read a great post on this at Found|Read, Wooing People to ‘Yes’! (Ha Ha! I wrote it ;). Not to toot, but it was genius post about how learning to tolerate the word ‘No’ separates you from the other tier-one MBA grads. Ultimately you need to convert ‘No’ to ‘Yes.’ If you wanna be a millionaire, study my tips.
4) Juice your credit rating while driving towards ‘cash flow positive.’ Secret societies are cool but the concept of “deep underground credit knowledge” at my company, duck9.com, pretty much makes me the guy on manipulating FICO. This applies to you, believe me. See my earlier post, Hack Your Startup Credit Rating. The threatened lawsuit with Fair Isaac is here. In short, good credit is good for you.
5) Learn to love the wait list. I applied to film school in ’98. Instead of a golden invite (legitimate acceptance), I applied to be on the wait list. (The 1st in history!) After flowers and chocolate, I was granted status of “dead last” on USC’s also-ran roll. Unperturbed (and celebrational) I showed up and enrolled in a community ‘screenwriting’ class, and asked every single day at 8M: ‘how many drop-outs today?’ Within a week, the dean knew me on sight and wah-lah!, I cleared the wait list. If I didn’t love the wait list, I wouldn’t know 90% of the celebs in my SideKick. This works: I know a girl who didn’t get admitted to Stanford. So she scammed her way into classes, joined ROTC and even got housing. She broke laws, but life is better if you navigate wait lists.
6) How to thrive during “9 Prisoner Dilemma.”
In b-school we learn all about Game Theory vis a vis the 2 Prisoner Dilemma — “the good cop/bad cop thing.” In the real world, business challenges are never so binary. What happens when there are 5 of us in a dingy with no oars and 4 more in the water?! Those Ivory Tower game theorists were still trying to win the War of 1812 in 1850. According to Tuchman (she’s the author of The Guns of August for those of you who don’t know), you fight to win the next war. Your next war will have 9 prisoners, so get ready. (Did you know that ‘snafu‘ and ‘fubar‘ are acronyms for “Situation Normal All eFFed Up” and “eFfed Up Beyond All Recognition”?). Business is messy, and the 2-prisoner scenario of the past is a luxury, not a dilemma.
7) How spiffs, rips and the Glengarry Glen Ross lead works. I’ll simplify it for you. Pay-for-play isn’t just for politicians, it’s for entrepreneurs as well. What I mean is, tipping is like a secret lubricant to the economy. Exercise: bring 8 nickels (i.e. $5 bills) and notice how your next hotel experience changes.
8) How to profile a person in 20 seconds or less. Malcolm Gladwell might think it’s bad, but in business it’s essential. Profile people with pop quizzes… for example, what do you call a guy who has a business and thinks buying for $3 and selling for $10 comes to a 30% profit margin? Answer: An effen genius.
8a) California-ification isn’t just a funny show starring David Duchovny. This is when all of your biz contacts are Calif-centric (And no, the 8 in NY doesn’t count.)
8b) Consultant-ification. Yeah, I just made that up. It’s when you think about and analyze how to do something over and over and over again, but never actually do it.
9) How to look good in your burlap bag. This is the 1st thing they teach you in super-model school (ask me how I know). It isn’t even near the GSB radar. Robert Black founder of FORD modeling agency said to me once: ‘Larry, if they force you to wear a burlap bag, then make that bag shine’. Superstars see opportunity in the burlap bag. A burlap bag can also come in the form of a poor co-founder, poor VC, poor employee. (Remember, they call it show business — not show friends.) Do you have a member of your team that’s not adding value? If you have to bring him along to the conference anyway, figure out how to shine in spite of his stupid-ification/consultant-ification. Figure out how to migrate him to VP of Strategy and work with your board to dispense with him later.
10) Exit Strategy for Your GSB-Girlfriend. They say a CIA agent will never enter a room he hasn’t already figured out how to exit at least half a dozen ways. Relationships in b-school are the same. Enter only if you have an eye for a clean exit already planned out.
* My Contest: Submit something important you’ve learned that founders couldn’t get in Stanford B-School. (You’ll get fame and fortune for helping me with my book!). The winner will be selected Friday and get a duck9 winter fleece (worth $80)! Enter your submissions in the comments field.
Larry Chiang is the founder of duck9, which educates student borrowers on how to establish and maintain a FICO score over 750. He is a frequent contributor to Found|READ. His earlier posts include: How to Work The Room; 8 Tips On How to Get Mentored ; and 9 VCs You’re Gonna Want To Avoid. You can read more equally funny, but non-founder-focused-non-GSB-lessons on Larry’s Amazon blog.