Handling Criticism - The Real Challenge for Entrepreneurs

February 17th, 2006 • Business, Entrepreneurship + Startups

For some reason the folks over at Podcast Ready have found my blog and taken offense to what I wrote about their web site. At least the CEO, Russell Holliman, had the courage to identify himself and say that their site was intended to be a placeholder and work would be done on it since folks were now visiting it. I’m not sure if I buy this explanation since some considerable work was done on the flash animation for it to just be a “holder” page. But I’ll let them have a pass on that.

There is a follow up by “bigdupe” asking about my web site and if this is a hobby of knocking other people’s sites. Clearly, this is someone related to or working for Podcast Ready since the blog post is about ten days old. First to answer the question, yes I do have a site. In fact, you’re looking at it right now. If you, “bigdupe”, are talking about a business site, sure I used to have one of those too. Check out Digital Envoy. It is the company I co-founded and where I worked until last year. Yes, there is flash animation but notice there is no sound. Of course, since I’m no longer there they could always add sound to the site now (to my disgust) but I think their sense of good user interface design will prevent that (I hope).

More importantly though, this got me thinking about entrepreneurship and handling criticism. It is pretty evident to me that the folks at Podcast Ready (perhaps not in management though, I can’t be sure) aren’t adept at handling criticism. If that is the case, you are definitely in the wrong business. The road to a successful startup is lined with criticism and second guessing. The fact that folks at Podcast Ready can’t deal with one blogger picking on their “intro” site makes me question the viability the company. I might be wrong and maybe this is just a bad day for them. But if this is really how you have decided to spend your time, you have got some bigger long term issues facing your company than me. But instead of continuing to pick on Podcast Ready, let’s take a look back in time at the criticism I’ve faced in starting, launching, and deploying the technology at Digital Envoy.

Casual Internet Users

I’d classify my criticism and comments of companies on this blog as the criticism from a casual Internet user. Yeah, I have a bit more pull than a casual Internet user and sure, I’m technically more savvy but when it comes down to it, I’m not (yet) a syndicated columnist in a respected newspaper nor am I (yet) some hot-shot Internet analyst for some financial firm. At Digital Envoy we had a lot of casual users who would email us and berate us about our technology. “You guys suck.” “You guys are big brother.” “There is no way you guys can do this.” And of those emails that we got, I saved every single one of them (somewhere). Some of them were downright funny then and even more so now. Others were just plain weird. One quote from one of these detractors early in the life of the company ended with “My firewall will continue to block you!”. This quote took on a life of its own within the company and was most often used as an effective rally cry in many foosball games. The use of this phrase was especially poignant when a goalie block turned into a cross field goal on the would be offense.

Venture Capitalists

We had an amazing knack of horribly timing things related to company finances. We raised our first $1.5 million in angel money post Internet peak, in late 1999 and early 2000. Still, we got the money that let us launched so we dodged that bullet. Next, we started raising our venture round in late 2000. After a ten month endurance trial, we closed our Series A of $10.5 million in mid-2001. We were lucky and we dodged another bullet again (i.e., the impending complete implosion of the market and the frozen business landscape after 9/11). In that ten month endurance trial we pitched to well over 200 VCs. Yes, you read that right - two hundred VCs. Sure, they weren’t all in person. But the fact is that we talked to over two hundred VCs about our company and why they should invest. Here are some of the things that I heard from these VCs:

• “I was the editor for the law journal and I don’t believe in patents.”
• “We don’t invest unless there are issued patents.”
• “I find it disturbing that you can’t explain how it works exactly.” (from an expert working for a VC who clearly didn’t understand software or Internet technology)
• “I don’t understand why anyone would buy this.”
• “Is this a product or a feature?”
• “Is this a product or a company?”
• “You have to get rid of that dog that is pee-peeing and poo-poohing on your website.” (an early version of our site had a dog named SPOT that was our goofy way of explaining the technology - this is one point that was right even though this person had an obsession about this issue)

In this effort I met some really great VCs who, to this day, I still keep in touch with. Unfortunately, the field is full of buffoons. And we, as entrepreneurs, must suffer these buffoons because they have what we want - money. But in order to get that money, you’ll have to suffer through a horrendous amount of criticism about what you’ve done so far and where you’re going. Sometimes the criticism is well placed and will make you think about new avenues and why you did or didn’t do certain things. Other times, the criticism comes from people with no real world experience of running a company. In which case, you just have to grin and bear it.

Conferences

Conferences are an extension of the casual Internet user except these folks are more educated and some attendees attack speakers for sport. If you can’t think well on your feet and if you don’t know your technology inside and out, don’t volunteer to speak at a conference. You’ll get roasted and look like a fool. Even when I had to speak on a panel with a competitor, I never got roasted. But the real skill comes from taking comments or questions from a conference attendee who is trying to roast you and turning them into a fan by answering their grievance completely and fully. It doesn’t happen often but when it does, it’s gold.

Customers and Prospects

We were in a unique position (perhaps not that unique) in that our potential customers had been educated for years that what we claimed to be able to do was impossible. So inevitably, the technology folks would attend our pitch meetings and try to shoot holes in what we did. Technology folks are notorious for never admitting they are wrong. For, to admit such a thing would drop the level of respect others show to you for your technical prowess. Never mind that your act like a complete jerk to others while you are protecting your street cred. Again, if you can’t act quickly on your feet in handling criticism, don’t make a sales call. Ever. You’ll just get roasted.

Competitors

We had our competitors do some pretty nasty stuff to us. I recall one trying to start a rumor on a well known business rumor site that we were unable to raise money and were shutting our doors. Oh, it also said that the information came from an employee who was looking to leave the company. Given that our staff was something like ten people at the time and no one left for about two years after we got funding is a pretty good indication that this “rumor” was totally made up. The rumor wasn’t accepted as credible by the folks running the site which was clearly a good call. Two weeks (or perhaps less) after this rumor was submitted, we announced our $10.5 million round of funding. Our response to the rumor - none. In fact, I think this is the first time it has ever been discussed in print.

Summary

So in summary, dealing with criticism is an important facet of entrepreneurship. It is going to come at you from all sides. From your friends, partners, customers, the press, and competitors. If you are going to survive, you need to focus on what is most important and not get defensive when someone is being critical about what you are doing. Maybe they are all wrong. But what if they are somewhat or even fully right? What are you going to do about it? Are you going to just lash out at them because they have a “hobby of knocking other people’s sites”? Or are you going to take this as an opportunity to examine what you are doing through a different lens and make what you are doing just that much better? Those that take this challenge will be the ones that separate themselves as being successful entrepreneurs and not entrepreneur wannabe’s.

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