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How to compete with the cheats

Unrealistic optimism and boundless passion are critical parts of any good entrepreneur’s DNA. If building something new and important from nothing was easy, anyone could do it.

And if everyone knew how difficult starting a business was going to be, no one would ever try. Persevering in the face of what appear to be overwhelming odds is also part of the requirements to eventually get to the finish line.

But what it doesn’t take is lying to your peers, investors and customers, as well as to the media. That’s crossing a line that no one should ever cross. And whether you acknowledge it to yourself or not, there’s a surprisingly bright boundary in almost every case.

There’s a day or a point in time or an ethical test that presents a clear choice; you don’t slip or fall into fraud, it’s a straightforward decision. You either consciously plunge forward into the abyss of illegality or you sharply pull back and stay legit.

This is why it’s so important for the people who are trying to build real businesses in the right way to call out the cheats and creeps.

To make sure that everyone sees that – even if we all admit to ourselves just how easy cheating might be – there’s a substantive and real difference between readily available rationalizations to justify illegal acts and actually making that initial bad decision to head down the wrong road.

But just because you can understand the complexities, temptations and risks doesn’t mean you get to stand quietly by – especially when it’s your own business that’s being adversely impacted by competitors willing to do and say anything to get the sale. You’re the one who has to act, even if it’s clearly not easy.

I call this asymmetric competition (or bringing a knife to a gunfight) because one side is always trying to do the right thing and compete fairly while the other side has no limits, no ethics and no boundaries on how low they’re willing to go.

In fact, the Orange Monster and the scum on the other side think that dishonesty is an admirable survival skill and claim, much like Trump bragging about being smart enough to evade any taxes.

That cutting corners, shaving points and edges and using inferior goods and components are all part of a big game where only winning ultimately matters. As Hitler said: “It is not truth that matters, but victory. The victor will never be asked if he told the truth.”

Confronting and dealing with competitors who are lying to your customers is a very complicated task.

There’s a fine line in the customers’ minds between complaining and whining and the problem is growing because in the Trump era, where no lie is too big, bold or unthinkable, the numbers of unscrupulous players are multiplying.

It’s becoming more and more difficult for buyers to determine who’s telling the truth and who isn’t. Worse yet, in the startup world, facts and factoids are often confused and concrete “proof” is often hard to come by.

Consider that JPMorgan Chase alleges it got hoodwinked by Charlie Javice, the  30-year-old founder of Frank, a fin tech the bank bought for $175 million.  The celebrated “fake it” culture and the media’s glorification of growth at any cost, hasn’t helped to clarify the worsening situation although we do seem to finally be turning a corner.  

It’s been encouraging to belatedly see the demise of the “fake it ’til you make it” excuse for outright and grievous instances of theft and fraud although the general commentary in the mainstream media stills lags in calling out the harsh realities in many of these cases.

It appears that, in addition to simply creating copy, filling space and dancing around the truth, too many members of the tech press feel obliged to insert a paragraph or two reciting this old Silicon Valley saw, apparently in the name of neutrality, objectivity and even-handedness.    

In truth, spewing this bullshit adds nothing helpful to the conversation. This startup malarky persists even after convincing and broad-ranging criminal convictions.

It confuses and confounds the public and prospective investors, misleads other serious and honest entrepreneurs and frankly continues to provide some shelter and comfort to people who are demonstrably criminal.

We just had another round of criminal convictions in Chicago in the Outcome Health cases and sadly there are still far too many social media comments about how the thieves and villains are nice folks and did so many supportive things for others right up until the time their criminal scams and schemes were disclosed and prosecuted.

There really aren’t two sides to these stories. Try telling the firemen that the arsonists aren’t really such bad guys – they just have a thing for matches.

This bogus approach closely resembles the oblivious stupidity of the political press in constantly attempting to equitably compare the positions of conscientious and well-intentioned Democratic politicians with the dishonest, manipulative and extortionate proposals of performative MAGA morons whose sole interests are to delay, disrupt and interfere with the ongoing governance activities of the Congress and with those of state legislatures as well.

Instead of talking about what’s happening in Washington, where one party is creating a potential catastrophe and attempting to hold the country and the economy hostage to their crazy demands, the media talks about the situation as if it were a normal, two-sided conversation among rational actors instead of a circus conducted by performative assholes.

These acts are so outside of the norm that the traditionalist and temperate Democrats like Dick Durbin don’t even know how to address them.

It’s hard to pretend that it’s business as usual when people you have to call your colleagues are lying to your face and to the public daily, but that’s what’s going on and the country’s much the worse for it.

Startup entrepreneurs face the same problem: Trying to honestly compete with liars and criminals in their own marketplaces. You’ve got to say something, you need to call the customers’ and clients’ attention to the situation – both for their sake and your own – but it’s a difficult conversation to have.

It’s frankly surprising how often we have to rediscover an old and very basic lesson,  which is that customers and clients don’t really care even a little bit about your constraints and concerns, even when they clearly should. Even if theirbusinesses could also be at risk.

The pandemic presented case after case of this problem – honest suppliers (especially of food products) incurred enormous additional costs to avoid any risks of passing on virus-contaminated material.  But many were woefully unsupported when they tried to share these costs with customers.

They were happy to find lower-cost and less  conscientious vendors willing to sell them similar products and who falsely claimed that they had also taken suitable steps and precautions to avoid any problems.

In the end, your customers and clients believe that they hired you to do a job and not much else matters – get the job done, now and correctly.

They don’t want you to waste their time with apologies or excuses. If that’s all you’ve got to try to justify your concerns, you can bet that there’s going to be some unhappy times ahead.

Let’s be clear, though, that an apology isn’t an excuse. Honestly, there’s no such thing these days as a good excuse. But a thoughtful and solid explanation of the situation is an entirely different thing. The trick is to find the right way and the right time to tell your story.

Here are three key things to keep in mind.

(1)  The context of these kinds of conversations matters at least as much as the content. Find the right time and place and make sure that the customer is willing and able to listen. A congested and busy office isn’t the right place.

A rushed phone call or having the talk while standing in the hall between meetings won’t get the job done. Invest the time to make the conversation personal. Forget Zoom,  face-to-face matters.

(2)  In the war on truth that’s raging these days, the only certain way to lose is to be passive. Honesty is difficult and sometimes painful at first, but it’s the only way to develop a long-term relationship based on trust, which is the ultimate key to success.

A sincere effort is all anyone can ask. If you tell the truth, the truth becomes part of your past. If you lie, the lie becomes part of your future. The truth only hurts when it ought to.

(3)  Focus on a few important facts and stick to your story. It’s more important to repeat the critical and personal concerns than to try to cover everything. Our minds process meaning before details. Passion and energy are more compelling and effective than a particularized parade of horrible.

 Take your time and be patient. Don’t lose your place or your temper. If you’re angry, people will focus on your anger and not on the facts that matter.

The objective in these conversations isn’t to sell, convince, or share your burdens; it’s to demonstrate why it’s in the customers’ own best interests to look carefully at the alternatives and the risks they face before they make the wrong choice.

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