Wade Appelman — Blog and Website

I’ve worked with lots of people and companies over my career and I’m constantly amazed by how the culture of various teams can be determined simply based on how they make decisions and treat people/vendors.  These decisions can take a number of forms including how they buy products, fund companies, and even how they hire people. Recognizing the different styles quickly is easy and can certainly save a lot of valuable time!

In thinking about this recently I’ve realized people (and by association their company) can fall into several high level categories:

DIRECT & INSIGHTFUL “FROM THE GUT”:

• Provide clear direction on what they are looking for, steps/deadlines, and provide feedback as you go thru the process in timely manner
• Often get to salient differentiators quickly and leverage practical experience to guide their thoughts
• They give quick yes/no answers and tell you why they are going in a particular direction … even if not with you or your product.
• Their rationale for the decision passes the “sniff test” and you feel they paid attention to your ideas in appropriate manner.

Recently I’ve been raising money for a startup I’m heavily involved with.  We have seen a number of VC’s and mostly all have fallen into this bucket.  One in particular, however, stands out as a great example.  I’ll keep the name private for the moment — but you might figure out who it is.  I pitched him a few years ago when he was with another firm in the area for a different company I was with and about 20 minutes into the 1 hour meeting he said “guys I’m gonna pass … and here is why”.  At first it was a little difficult to take the feedback (and quick no) but upon reflection it was spot on and it allowed us to move on to more relevant targets (we eventually closed a round with more appropriate VCs).    This partner has now moved on to his own shop and I reached out a few weeks ago to see his interest in this new project. He quickly responded to email dialogs and set the meeting up in an appropriate window given calendars.  After our first meeting went 30 minutes over allocated time we had clear next steps, got clear feedback as we went along, calls returned promptly … and then a prompt NO!

OK … so the story didn’t have a happy ending — but regardless I still really liked the process, have a good feeling for the VC, gained insight on what he didn’t like/had issues with and we can continue on in funding process.

These types of people/companies are winners!  You may not always agree with the output but bet your money here and you will win!

CONSERVATIVE & DETAILED “FROM THE DETAILED DATA” :

• Want lots of analytical data and deep details (sometimes more than any others have asked for)
• Involve many people in the process
• Make decisions based on matrix comparison and after thorough technical research
• Takes a longer time to plan but execution is usually on target to goal dates
• Once they make a decision it is bought in from top to bottom and execution commences immediately

This style is often driven from the top of the organization and can really work well … if used appropriately (i.e. does not get too bogged down in irrelevant analytical detail and BS).  At a company I was with for much of the ’90s we DID NOT follow this decision making process and it was reflected in the well known culture of the company.  Sure we got things done fast — but often at a longer term cost. In contrast at my first startup we did spend a lot of time planning, looking at strategic implications and for the most part made decisions in a quick and clearly communicated fashion.  The success of that company and the market reputation we developed I can clearly equate to the decision process we utilized.

On the sales side of dealing with these companies you have a longer process than “from the gut” people — but as long as communication stays open these can often be the most rewarding wins and long term relationships.

While these companies/people are methodical and slower moving they are not likely to be down for long in tough markets and assuming they don’t trip over the curb stone the longer term horizon is likely well seen.  The trick here is to balance strategy and tactics!

SLOW MOVING & DYSFUNCTIONAL “WILL THEY EVER DECIDE ON ANYTHING”:

• Say they move fast … but they don’t and decisions drag for evvvvvver
• Say they are consensus driven … but they are not
• Say the will give honest feedback … but it is not provided
• Say they are going to be a great company … but it can’t be!

OK — this is pretty obvious and there are unfortunately too many of these types of companies, investors, and people out there right now.  The challenge is figuring out how to identify them so you don’t waste precious sales resources or personal time chasing them for funds, sales, or a job.

In running sales at my last company we called on a few of these types of companies.  They ended up wasting a lot of our time, ate up travel budgets, gave us false hopes and it took a lot of effort to get the internal team to walk away (which we correctly did before it became a larger problem). Oh and the one company I’m thinking about in particular is now in Chapter 11.

I admit its hard to walk away from a perspective customer who say’s all the right stuff about project funding, meets with you, returns calls every so often … but can never say no!

Its hard too to not go after a VC who you is with a firm that all indications are they are not doing investments or running out of money … but still meet with you!

Walking away from a potential job because the interview/recruiting process and company culture feels “Dysfunctional” is also hard but think about it … if they can’t make a decision during a RECRUITING process what will life be like as an employee!

I’m sure there are many other subsets of these types of companies and great examples but I’ve experienced all three of these distinct types in the last week or so and just couldn’t let it go without a comment.