How to Tell the Truth
a16z.com
a16z.com
The fundamental problem, I think, is that there's frequently an imperfect understanding of the scope of the truth.
Missing the sales number feels like the company is failing. But is this a blip, because 2 big deals flaked? Or is this a systematic inability of the sales team to build urgency?
3 of your best engineers quit. All of them have personal reasons for leaving, but was it really because they had started drifting when a director didn't deal with that toxic team 6 months ago?
Most of the time, nobody knows. And even if they think they do, they're just guessing and confident.
In a practical way, the only thing that really matters is that you have a plan everybody believes in. Telling the truth is crucial, because otherwise your plan feels out of touch. Unfortunately (and this is especially true at startups), nobody knows exactly how the company will go in the next 2-5 years. But you still have to acknowledge the narrow facts and find a narrative that's consistent with them.
It always feels optimistic and silly. It always feels like spin. The alternative is to hunker down and pull a salary until the truth is that the company is filing for bankruptcy, at which point the naysayers will have been right all along.
I don't understand what you're saying here. It sounds like you're conflating negativity and honesty.
Honesty may or may not be negative. If you're Tesla, you can stand proud and say "We are trying to change the world," that is both honest and positive. If you are Zynga, you cannot.
There is an alternative to to "spin" that's not pessimistic, it's the middleground called realism.
If you tell the honest truth "We may fail, I'm not sure, but it's not the end of the world if this company fails, most do" that doesn't sound like silly spin to me.
Tell all the truth but tell it slant,
Success in circuit lies,
Too bright for our infirm delight
The truth's superb surprise;
As lightning to the children eased
With explanation kind,
The truth must dazzle gradually
Or every man be blind.
Emily Dickinson
Yeah, except for, you know, the second paragraph of the Declaration of Indenpendence: "We hold these truths to be self-evident, that all men are created equal..." Comparing the Gettysburg Address to corporate spin (which is essentially what the article is promoting) is cringeworthy, disrespectful, and woefully out of line.
Pretending America's founders were consistent and genuine in declaring "all men are created equal" is cringeworthy, disrespectful, and woefully out of line.
> Pretending America's founders were consistent and genuine in declaring "all men are created equal" is cringeworthy, disrespectful, and woefully out of line.
You're attacking a strawman here. I think you missed the salient point.
I come from California, where newcomers usually have difficulty telling true opinions from meaningless pleasantries. (The locals of course can tell.) And I spend a lot of time in Germany, where the imperative towards honesty often leaves politeness strangled in the dust; but also in Hungary, where honesty has a lot to do with who's speaking to whom.
But so far I don't have much business experience outside the US, and I wonder whether the interpersonal and/or political norms apply to business.
Any insight into how that differs in whichever East you're referring to?
And what defines success?
In plainer terms, what happens when your Western VC boss expects you, as an East Asian CEO, to run mass layoffs in a certain way, when your heritage informs you to run them in a completely different way? Or fill-in-the-blank with any other major top-level decision. Thinking honesty/integrity vs. honor/shame/face-saving, etc.
Honor/Shame/Face-saving is one factor that hampers many East Asians from go into entrepreneurship.
"Work hard in school. Go to a good school. Become successful Doctor."
Those who overcome that stigma and go into business probably don't have as much attachment to the honor/shame game.
I don't really see a paradox/conflict here. All the scenarios are basically, the company isn't doing well, but saying so shows weakness. But in that case the bigger possible truth is that maybe the company is doomed and should be shut down. So it seems less a matter of telling the truth to others, and more of admitting it to yourself. If the company isn't doomed, if despite doing badly it has a path out, then that path is part of the truth you should tell employees, and if your assessment is correct they'll stay.
Most startups I worked at insisted they were saving the world in one way or another. The C level probably patted themselves on the back pretty hard for coming up with such an inspiring interpretation. But within a year, it always rung false (based on their actions being entirely inconsistent). This made me trust them less than if they had simply said "We're in this to make money. We're a company, that's what we do," which, in my opinion, is totally okay to admit.
For example:
- Do not call yourself a family if you have ever let somebody go within 3 months of hiring them. Would your literal family kick you out because they weren't seeing an ROI in 3 months or because you were difficult?
- Do not say your mission is to empower one group or another if your actions are not truly in that group's best interest. E.g. giving them credit cards when they're already in debt.
- Do not imply that your "door is always open" unless you have the willingness and time to hear some of the ways your company is actually fucked up and act on them.
- Do not suggest employees will get rich when you damn well how unlikely it is.
- Do not use bullshit euphemisms all the time, such as a massively failing manager being "promoted" to a position with no authority. What your actions are doing is saying "We work in a class system where you can't be fired once you're at a certain level"
- Do not imply you're a meritocracy. Your company isn't, it's a handful of narcissistic wealthy people at the top surrounded by sycophantic top-level-managers with actual laborers 3 or more levels down. The idea that individuals can be rated on traits and promoted to "levels" is a laughable oversimplification to anybody who thinks about it.
- Do not imply most of your employees will ever be promoted if you know most won't.
But isn't that pretty close to the truth?
1. Call it like it is "John failed, but we live in a class system so instead we're moving him to a less important team because we believe in this class system"
OR
2. Stop perpetuating that class system and fire people who do bad work, even if they went to Yale.
OR
3. Admit to yourself that you're not remotely honest, and don't expect any of your intelligent employees to buy your story either. [i.e. The normal choice]
"Whenever executives talk about how their company is really like a big ol’ family, beware. They’re usually not referring to how the company is going to protect you no matter what or love you unconditionally. You know, like healthy families would. The motive is rather more likely to be a unidirectional form of sacrifice: Yours." https://m.signalvnoise.com/the-company-isnt-a-family-d24f26c...
If you don't believe that line, and it truly bothers you, why do you work there?
> Do not suggest employees will get rich when you damn well how unlikely it is.
It's not like the top execs at startups are compensated any differently. They might have more options than you, but the majority of their upside is still options.
I don't mind companies that try to make money, I like to make money myself. What I dislike is dishonesty, it's Orwellian and feels patronizing.
Agree with you in principle, but I disagree about this interpretation. These "levels" are not about traits or ratings or performance; that's as much a lie as anything else you mentioned. They are entirely about trust: How much does the company trust you to be able to act in its best interest and derive ROI from your org? And from that perspective, the narcissistic and sycophantic traits are natural fallout.
No, not really. Here are some example counterpoints:
- There is a commitment to hierarchy. This is incompatible with meritocracy. The fact is, there won't always be one "smartest" person at each company. Yet companies always find a way to make a pretty reporting tree.
- It's not about trust, mid-level-managers care more about their promotions not reflecting poorly on them politically than the best interest of the company in the long-term.
- Most companies will codify a standard "promotion process" with peer reviews and 2 "cycles" a year. If this is about ROI then Joe the freshman can be CTO if he's that good (and heck, he may be, if he's the next Larry Page), no matter what he rates on the 4 dimensions of reviews.
- Most companies adamantly follow standard norms. For example they do not demote people (i.e. with pay cut). A meritocracy (or a truly ROI based system) would demote people.
- Most companies base their pay on previous compensation, rather than expected worth.
This is the part where we are in complete agreement.
> ... The fact is, there won't always be one "smartest" person at each company. Yet companies always find a way to make a pretty reporting tree.
I don't think anyone is under the illusion that a company hierarchy is stacked based on "smartness". If they are, they need to read the Gervais Principle [0]. I personally remap these roles as losers -> producers, clueless -> regulators, and psychopaths -> harvesters. I'll use these remappings throughout this response. So do I expect harvesters to be the "smartest"? No, but I do expect them to be good at driving value.
> It's not about trust, mid-level-managers care more about their promotions not reflecting poorly on them politically than the best interest of the company in the long-term.
I'm not even sure what you mean by this. How would a promotion reflect poorly on someone? And I don't think anyone is saying that actors needs to be 100% dedicated to the company. But you certainly aren't going to climb any ladders if you can't demonstrate the ability to create value as a producer and drive value as a harvester. But those harvesters are also in a position capable of destroying value, which is where the trust comes in. You also aren't going to be climbing ladders unless those above you trust that you aren't going to Godzilla the existent value that's been built.
> Most companies will codify a standard "promotion process" with peer reviews and 2 "cycles" a year. If this is about ROI then Joe the freshman can be CTO if he's that good (and heck, he may be, if he's the next Larry Page), no matter what he rates on the 4 dimensions of reviews.
To refer back to Gervais Principle, those games are for the produces and regulators. Harvesters are running "tours of duty" that last 3-4 years and are not looking at peer review processes at all. This tour is only meant to line them up for the next tour, which will be bigger if they do well and smaller if they don't. And potentially non-existent if they really muck it up.
> Most companies adamantly follow standard norms. For example they do not demote people (i.e. with pay cut). A meritocracy (or a truly ROI based system) would demote people.
No. They just marginalize and / or lay off those people instead.
> Most companies base their pay on previous compensation, rather than expected worth.
Again, a game for the produces and regulators. Harvesters compensation is negotiated and decided on a different level, usually with large bonuses for performance (aka expected worth) and maybe even a golden parachute if they're particularly juicy.
[0] https://www.ribbonfarm.com/2009/10/07/the-gervais-principle-...
>>> I'm not even sure what you mean by this. How would a promotion reflect poorly on someone?
For a real life example, I have a friend, let's call him Justin, who's an incredibly efficient engineer, and this is known. But he won't get promoted because of a few obnoxious traits (outed as a Trump supporter, got drunk at the office a few times, liked to place bets on video games at the office).
I don't think his manager will promote him, because he worries if he promotes Justin, then Justin gets fallover drunk and has to be fired, then somehow it'll look like a mistake to have promoted him in the first place... Super-political (i.e. concerned with appearance over reality)
And thanks for the story. Manager definitely sounds like a clueless / regulator type for worrying about such things. While at the same time, "Justin" hasn't done a very good job of making himself trustworthy.
I keep remembering George Carlin's words that Americans have trouble with the truth. Obviously I am not judging but I've heard quite a lot of ther USA citizens say the same.
Coming clean is the best thing you can do as a CEO. Plus, as my wife says "if they leave you because you're in a tight spot, why would you need them anyway?"
I realize it's not always that clear and cut but IMO the general principle is sound.
Um, no. Does he really live in such a morally uncentered world that he thinks most people would have difficulty answering this question? (Is the VC world like that?)
Of course nobody is 100% honest all the time, that would be pathological. But if you consider yourself an honest person, and live in the same universe I live in, I bet you know a whole bunch of people you consider at least as honest as yourself.
If not, that would be very sad, but it would still not be normal.
He does explicitly say completely honest, and you admit that nobody is 100% honest all the time.
Feel like you're moving the goalposts somewhat here.
> Are you an honest person?
Now, here's the follow-up, emphasis mine:
> ... who else do you know that’s completely honest?
Those are not the same question, at all. biztos was correct to call it out.
Yes, there's an extra word in there. I think you're both missing the point.
It wouldn't be interesting or valuable for Horowitz to change his honesty benchmark half way through the opening paragraph. He even includes the word "else" in there, reinforcing the equity of the two measures.
So, assuming he's not changing his honesty benchmark... nor is Horowitz likely to believe that each individual reader is objectively the only honest person in their network (or one of few). There isn't even any reason to believe the reader is above average in their honesty.
That really just leaves one reasonable interpretation in my mind; the point that humans are subjectively more likely to view ourselves as honest compared to others. Whether you agree with this point or not is another matter, but there's plenty of evidence for similar cognitive biases.
But yeah, I don't think this article is Shakespeare.
I don't like it, but telling the truth, like riding a bike to work, is a luxury that only the extremely rich and extremely poor can afford today.
Seems pretty forced and out of touch to me, and have being seeing this trend more and more (I think Dave McClure loves Beastie Boys lyrics?!).
I guess it's a way for the ultra-rich to seem more "street" and equate their hustle of VC investing w/ the street hustle?
This is in contrast with VCs, who grew up (again, with exceptions) in privileged, upper middle to upper class environments, with a silver spoon in their mouth.
Hip hop resonates deeply with them because it is the life story they'd like to have (from rags to riches only with a pen and a mic), instead of the one they have (from Stanford to Sand Hill Road only with daddy's checkbook and address book).
That's the kind of music he loves.
https://a16z.com/2014/03/02/the-legend-of-the-blind-mc-2/ is a fun read (and listen).
Its even more ridiculous because the author has been a fan of hiphop for a long time...
What's ridiculous are all your conclusions that "this is just some dude with a blog who likes rap music"; my premise was actually about why someone who's in the (very conservative) business of dealing with $Billions (of other ppls money no less) likes to sprinkle rap music videos and lyrics all over their public communications. My bet is that he thinks he's cool, guess what, he isn't.
VC money and their managers spouting insight like street rappers, yo! Because, you know, it's the same! Remind me to quote some Big Daddy Kane next time I have an appointment on Sand Hill Road :D
Hell, we don't even pretend to treat people equally under the law. See affirmative action, offering disability benefits, treatment of addicts, etc.
But I guess saying that makes me "not a true American" according to this facile, pretentious blog post by SV royalty.
Post should be called, "How to Pretend to Tell the Truth in Business."
So I don't understand your point.