So I am reading the lead Wall Street Journal article this morning about the failed performance of the Sprint/Nextel merger. The author goes into all the ways that Sprint has botched the integration, from diluting the Nextel brand to failing to integrate the two networks. He also talks about how the company has had massive turnover and has lost customers at a time when other carriers are growing. However, none of this information prepared me for the quote I was about to read from the Sprint CEO which follows.
“Mr. Foresee concedes that Sprint has stumbled in the short term,” though he says it’s well positioned long-term growth. “We’ve got one more box left to check and that’s to execute,” he said in a recent interview.
While many people might simply glaze over this quote, the last piece stopped me dead in my tracks. Is this guy really suggesting that when all else fails, then it’s time to turn to execution? The absurdity of this statement is almost difficult to comprehend and is very typical of big business. General George Patton once said “A good plan violently executed now is better than a perfect plan next week.” Similarly, General H. Norman Schwarzkopf stated, “The truth of the matter is that you always know the right thing to do. The hard part is doing it.”
Let’s bring this concept back to small businesses for a second. In my career, I have probably read over 2000 business plans from entrepreneurs seeking their first round of investment capital. I tend to cringe (as do all venture investors) a little bit when folks ask me for an NDA simply to hear their idea. As a general rule, I believe the entrepreneurs who are taking this approach have been given bad advice and often tend to be putting too much focus on the idea itself. They are often hunkered down holding onto the belief that their idea is proprietary, when in reality, what will make them successful is their ability to execute on that idea. This has more to do with the team, key business relationships, intellectual property, etc. An NDA is really more appropriate if you are trying to protect specific information such as a trade secret, real financials (i.e. historical), etc. or to protect your core information as part of a formal relationship with a service provider. However, if you ask for an NDA just for someone to hear your pitch, you may creative a negative first impression. Very few repeat or serial entrepreneurs will ever ask for an NDA as a prerequisite to hearing their idea, mostly because they know that their competitive advantage lies in their execution capabilities.
The advice I always give to entrepreneurs is to tell everyone what they are doing, because it can lead to important discoveries, new resources and/or learning about a well financed competitor who has a significant head start. I can promise that it’s better to know this information before making the decision to quit your day job. If you are starting a new business, resign yourself to the fact that someone has the same idea and instead focus your time on how you can win the execution game. As a prominent venture capitalist once said at a conference I attended “We don’t consider ideas proprietary, we consider execution proprietary.” While it may be too late for Sprint and its misguided CEO, make sure that you focus your business on the “how we do” as much as the “what we do”.