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Entrepreneur Bill of Rights – Article 7: The Right to a Two-Way Dialogue March 21, 2010

Posted by Lawrence Lenihan in Uncategorized.
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dialogue |ˈdīəˌläg; -ˌlôg| (also dialog)

noun

  • a discussion between two or more people or groups, esp. one directed toward exploration of a particular subject or resolution of a problem : the U.S. would enter into a direct dialogue with Vietnam | interfaith dialogue.

verb [ intrans. ]

  • take part in a conversation or discussion to resolve a problem : he stated that he wasn’t going to dialogue with the guerrillas.

In Article 3, I talked about VC seagull board members who come in to meeting, spout out a bunch of uninformed nonsense and then head home, mission accomplished, much like a seagull does when he is finished decorating the end of a fishing pier.  This arrangement is not very helpful or fruitful for anyone.

As our grandmothers constantly reminded us, God gave us two ears and one mouth for a reason – listen twice as much as you talk.  This pearl of wisdom is great advice for everyone at any time in life, but it is particular insightful for VC board members – and CEO’s too!  Dialogue, as you can read in the definition, is between two or more people.  Talking without listening and engaging is not dialogue.  It is a lecture.

Being a great entrepreneur is not anathema to being a great listener.  In fact, I have found it to be a key trait of being a great entrepreneur.  The same holds for a venture capitalist.  However, not listening is anathema to having a great dialogue and I would argue very strongly that great companies cannot be built without great dialogue.  Too often, what a VC feels is dialogue is really lecture.  Like students in a classroom where a teacher drones on without interaction, a CEO and management team will react the same to a lecture rather than a dialogue with a VC.

I teach a course in entrepreneurship at NYU that has the same name as this blog (Ready, FIRE! Aim).  I decided to teach this course because, through my years of observations as a venture capitalist, I can certainly verify that being an entrepreneur cannot be taught in class or read about in books: it can only be learned.  There is never one right answer for any question for an innovative company creating a new market – the right answer is learned through experimentation and through dialogue.  Listening and learning and questioning and engaging are how great companies are built.

A VC can provide an enormous amount of value to the CEO/entrepreneur through one simple action – we can listen.  But, only by listening first, can we give good advice and counsel and “add value” with insight.  Too often we don’t.  VC is not code for “transmit only” – it needs to mean “transmit after receiving first!”. By listening we establish the foundation for dialogue and with dialogue, the foundation for a great company.

But like everything else, dialogue is a two way street.  There is not a successful CEO on the planet who is not a good listener.  I can point to truckloads who are not successful because they never listen and, because they never listen, they never learn.  Listening and engaging in dialogue does not mean you have to take the advice or agree with the insight given.  But, you should consider it.  Through consideration, you will be able to evaluate your conclusions through different points of view.  You might not change your mind, but I guarantee your conclusion is going to be better because it is more thoughtful.  Not all great CEO/entrepreneurs have taken money so they don’t have to listen to their VC, but I defy you to show me a truly great CEO who does not listen to someone.

But if you have taken our money, you need to listen to us.  VC’s have the right to be heard too.  You should not have chosen to take money from us if you don’t want to hear what we say.  If what we VC’s have to offer does not contribute to you building a great company, either you chose the wrong VC or you are not going to be as effective as you could be if you would just shut up and listen for once!

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