Looking stupid

Often, when I work with founders to build their financial models, they share a common fear:

How will I know if my assumptions are right?

And if they're wrong, won't this make me look stupid in front of investors?

It’s a natural fear, bred into us from grade school.

Raise your hand in class?

You’d better have the right answer.

If not, you get called out.

Not as smart as you thought you were, right?

But here’s the thing:

This instinct to hide your bad assumptions is self-sabotage.

You’re not in class anymore;

You’re a founder.

And as a founder, you want your crappy ideas and wrong assumptions hanging out there in the open.

Why?

Because fixing your false beliefs is more important than looking smart.

Your company is at stake.

It grows on the goodness of the bets you make.

And your bets only get better

When you make them out loud.

So write down your best estimate, an okayish benchmark, your wild guess of that assumption.

Raise your hand.

Be wrong.

The right investors won't think you're stupid;

They'll just know it's wrong.

And they'll be able to use that opportunity

To help you get it right.

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