The value of bad news – only good news is toxic

In the dying days of WW2, the situation in the Führerbunker escalated. Hitler was insane and just like Napoleon in the dying days of his reign, he was pushing imaginary armies across the map. Armies that did not exist.

The bad news came gushing in. But the one who told Hitler whatever bad had happened on the battlefield had a meeting with the executioner as well. Delivering bad news to the Führer meant certain death.

No wonder no one wanted the job. So the Führer was enveloped in an illusionary world of false information and he continued to push around his imaginary armies until the bitter end. Which came swiftly in the shape of the Red Army.

It’s a happy tale in the end as this meant the very rapid disintegration of one of the most horrific and sadistic regimes in human history. But the mechanics behind are telling and we should take note. But do we?

Nope. In today’s corporate world – bad news are as deadly as in the Führerbunker. You might not get shot but you might well have a brush with HR handing your last cheque to you. This is why every piece of information gets its spin and will be brushed and prettied up for higher management until the original information in it is not noticeable anymore.

During the reign of the Bagdad Caliphs, one of the greatest of them – Harun al Rachid – made it a habit of roaming the streets in plain clothes to hear from the general population what their real sentiments were. He knew that raw, unaltered information was critical for the survival of his reign. He knew that he could not trust his staff, lieutenants, secret service and those he would usually be calling the trusted ones.

Not because they were untrustworthy, to begin with (some certainly were as a court always is a venomous pit but where is the difference to the court of a CEO in a large organization) but because everyone polished any useful information out to shine and endear himself to the Caliph. But that in itself sometimes meant that the rationale for a particular course of action was flawed, to begin with.

I digress far into corporate life. At this point, you most likely are an upcoming startup. This means that you are so close to the action that information hits you in its very raw and unaltered state.

You are looking for an investor and it might be you who brushes anything out of recognition to make your business or your business rationale look pretty and endearing.

Don’t! Resist the temptation. And I know what I am talking about. I felt the urge many times.

But it’s a recipe for disaster. Smart investors will smell the ploy and you squander the little bit of trust and curiosity you might have created. Curiosity indeed is one of the most effective tools you can work with.

If your business proposition is solid but has a couple of warts and pimples – show them and also show them how you will handle them. Every investor – even if he has no clue about your trade – knows that there is no such thing as a flawless business. For him, it’s not so important to know how immaculate your idea or Business Plan is but rather if you keep your composure in the face of adversity. How you deal with problems is critical – so show them.

Bring them on as a resource so you can sharpen your teeth. I even throw personal challenges in, to show first that I am human but most of all that I am aware and that I won’t be awestruck when they do hit me. Besides, I have discovered that everything I had prepared for (at least mentally) did not come to pass as badly as I could imagine.

It’s bad to have a plan and not be able to deal with insanity as insanity will hit while you make your startup a functioning business. Don’t hide it, don’t fake it, and don’t try to avoid it. Get yourself into harm’s way and deal with it. It’s a man-(woman) building exercise. Besides, it will steel your body and your mind and make you resilient to BS as it flies in your face. I have dealt with so much crap in my life that some of the problems making others wince just put a little knowing smile on my face.

But that is common sense and even if there are not many who will get it, there are still fair numbers. What’s much more important is how this all makes you credible. We are humans. I certainly am and I assume you are too. As human beings we make mistakes, we under or over-estimate, we are exuberant at times, and take cover when we should stand tall.

I know what I think when I see the “too good to be true” kind of thing. Bullshiiiiiit. There is no such thing as a flawless business, device, or proposition. I immediately search for the hitch. Investors and other people are no different.

LNG as a fuel has a mighty Chicken and egg problem and that needs very careful stitching together of those projects.

Too much good news can kill an otherwise perfectly healthy project as it raises a lot of alarm bells. Those problems are not to be taken lightly and need careful planning and constant calibrating of the project. But denying that it’s there is not going to make things better as educated partners, customers, officials, and investors will not miss out on it.

Your problems and pitfalls are the most powerful resource you have. They allow you to show the best in you, as a real entrepreneur is not the one who accidentally falls on the golden pot but rather the one who creates his golden pot out of nothingness with nothing more than 30 bucks and the will to kick the world in the gut.

What’s important is showing that you are aware of the pitfalls, that you see them and if you cannot avoid them altogether at least have a solid plan on how to handle them. That goes beyond a risk assessment.