Poornima Vijayashanker

Learning to Say No: The Secret Power of Successful Startups

FemgineerTV

Welcome to the third season of FemgineerTV!

We’re stoked to have some great guests coming up who will help us explore themes that you probably haven’t come across before, like the power of saying no, planning pauses into your career, and more!

If you’re new to FemgineerTV, be sure to check out episodes from our previous two seasons. You can subscribe to our YouTube channel and watch them there, or subscribe to the podcast on iTunes if you’d prefer to listen on-the-go.

Let’s get started with today’s episode!

It’s the start of a new year, and you’re probably really excited to run some experiments for your startup or company. Since you’re keen on trying a lot of things, you’re probably going to be saying “yes” a lot! Saying “yes” is a great way to show others that we’re open to trying new things, taking in feedback, and making time for them.

However, when we say “yes” over and over, we start to lose our focus. If we do it too many times, it can be disastrous, especially when time is of the essence and we are trying to get something off the ground, like a startup!

So today we’re going to flip things around learn a simple and tactical way to say “no.” And to teach us how to say “no” the right way, I’ve invited Steli Efti, the CEO and Co-Founder of Close.io.

While Steli and I dig into best practices for people who are in startups, this episode also contains valuable nuggets for individuals out there who have struggled to effectively say “no” to a boss, teammate, or customer.

Don’t miss watching this episode and learning the following from Steli:

  • Why saying “no” is really hard, and receiving a “no” is even harder;
  • What you need to say “no” to;
  • How to say “no” politely and effectively, especially to influential people like customers, teammates, and bosses;
  • How to help others from overpromising and getting comfortable saying “no”; and
  • What we should be saying “yes” to.

In the episode, we mention the importance of having an anti-product roadmap, or what I like to a call a Not-to-Do list. Here’s how to create one, along with Steli’s podcast.

Now I want to know what are you going to say “no” to at the start of the year? Let me know in the comments below!

Listen to the episode on iTunes!

You can listen to this episode of FemgineerTV on iTunes. Please take a moment to leave us a review. Your positive review will help us get featured in News & Noteworthy and bring more exposure to the work we’re doing, as well as the talented guests we feature!


Transcript

Poornima Vijayashanker: Welcome to the 23rd episode of Femgineer TV, brought to you by Pivotal Tracker. I’m your host Poornima Vijayashanker, the founder of Femgineer. In this show, I invite innovators in tech and together we debunk myths and misconceptions related to building products and companies. If you’re in a startup or any size organization, it’s really tempting to want to experiment a lot, and because you’re keen on experimenting, you might be saying “yes” to a number of things. Well in today’s episode, we’re gonna flip things around and actually teach you the value of learning to say “no.” And to help us out I’ve invited Steli Efti, who is the CEO and Co-Founder of Close.io. Thanks for joining us Steli.

Steli Efti: Hey, thanks for having me.

Poornima Vijayashanker: Yeah, so, you and I met back in April, even though we live in Palo Alto, we met all the way out in Slovenia, which is pretty cool. And I know you’ve been a founder at Close and I want to get into all of that. But before we do, let’s backtrack a little bit and talk about what got you into entrepreneurship and what led you down the road to starting a tech company.

Steli Efti: Yeah. Well, lack of options is one of the core reasons why I became an entrepreneur. I grew up in an immigrant family back in Germany. I’m originally from Greece, but I grew up in Germany. Everybody in my family worked at a factory. Nobody ever received a high education and I was determined to keep that tradition alive. I hated school. I have two older brothers and one day, one of my brothers and I had an argument about success. And his point was that to make a lot of money, you either become academically successful and become a doctor or a lawyer, or you become a criminal kingpin. All right? He was a harmless 20-year-old guy watching too many gangster movies and listening to too many rap songs.

He turned out fine, but his point was, “To make a lot of money, these are the two ways that I think are available to us.” And I hated both of these options, so I was arguing back and forth until he eventually said, “All right, smart-ass, what is your plan for success? What are you going to do?” And I opened my mouth and no words came out. And I think it was that moment where I realized—I was 16 years old at that time—and that was the time I realized, or the moment I realized how clueless I was. Up until that point, for whatever reason, I had this belief that I was gonna do great things in life, without knowing what that meant.

Poornima Vijayashanker: Yeah.

Steli Efti: That moment made me realize that. So, that kind of spiraled a lot of things into action and eventually made me buy the first book that I’ve ever bought.

Poornima Vijayashanker: Which was?

Steli Efti: It was a $9.99 book, Everything You Need to Know About Stocks.

Poornima Vijayashanker: OK.

Steli Efti: Because the only thing I need—

Poornima Vijayashanker: That’s one way to get rich.

Steli Efti: I had watched a lot of moves.

Poornima Vijayashanker: Yeah, Wall Street.

Steli Efti: I didn’t read books. Wall Street.

Poornima Vijayashanker: Gordon Gecko.

Steli Efti: Gordon Gecko. I didn’t know what stocks are. I’m like, “I don’t know what this thing is. But it seems like people make money with it.” I saw it in a movie.

Poornima Vijayashanker: Sure.

Steli Efti: So, I went and bought a book about it. And I didn’t have a lot of money, so I bought a very cheap book about it, which was a godsend because I read it and it was written for somebody who has $9.99 to spare. About the topic rate. It was a very simple, big images. And I understood it. And it made me go, “Holy shit, this is what stocks are?” I remember giving my mom a four-hour speech in the kitchen as she was cooking about like, “You don’t understand the importance of this! We need to invest in stock! This is crazy.” So, that made me go back and buy another book. And then buy another book. And then eventually, I bought a book about how to start a business and entrepreneurship. And then I realized, “Wait a second. There’s this thing called entrepreneurship. I can start a business. I don’t need a certificate or doctorate. I don’t need anybody’s permission to do this and I can be my boss? Nobody needs to promote me or like me? This is it. This is going to be my thing.” And that’s it. I was 16, 17 around the time where I realized that. And then after year or two of reading lots and lots of books, I was like, “I’m well qualified to start my first business.”

Poornima Vijayashanker: Nice.

Steli Efti: And that’s what I did. I dropped out of school and I started my first tiny little business. And as often you get successful the first time around or lucky, right?

Poornima Vijayashanker: Yeah.

Steli Efti: So, I was lucky with that and that kind of encouraged me to keep going. I did a few small businesses back in Europe. Nothing to do with technology, nothing to do with software, but did really well financially. And then ten years ago, I had this idea for a technology company and software business. And since I had no background, I knew nobody who did, I was like, “You know what, the legend of Silicon Valley is pretty sexy and appealing. Let me sell everything I have, buy a one-way ticket and I’ll go over to Silicon Valley and I will change the world.” I didn’t quite work out how I imagined it originally, but that was kind how I got here and why I started with entrepreneurship.

Poornima Vijayashanker: So, you didn’t have a background in tech.

Steli Efti: No.

Poornima Vijayashanker: And I think when you first started, let’s just say you had a startup, it was less than successful. Let’s just say it failed.

Steli Efti: It failed.

Poornima Vijayashanker: Yeah. And then you had the idea behind starting another startup and that was service-oriented business. It was ElasticSales?

Steli Efti: ElasticSales, yeah.

Poornima Vijayashanker: Yeah, ElasticSales. So, walk me through what ElasticSales was and how did that get you interested in Close.io?

Steli Efti: Yeah, so ElasticSales was really the answer to the question, “How can we help more companies succeed and grow faster?” And what are the bottlenecks or the things that make growth really really difficult? And to us it was obvious that building a sales organization, figuring out a sales model, once you have a product or a technology…let’s say you have early signs that there might be a market for it. To learn how to sell that product successfully and then to scale a sales organization around it is very, very difficult. But if you’re good at it, you might crush your competition, although you have a superior product. We all know businesses that had a better product and a better service and still lost because their competition was more aggressive and more successful in selling.

And we thought, “What if no great business on this planet would ever fail because of a lack of sales? And how could we enable sales to grow in acceleration?” So, we had this idea that started very theoretical. And then we thought, “Let’s not overthink this. Let’s not do market research, let’s not come up with a name, let’s not put a website together, let’s not put together a slide deck.” We had this idea on a Tuesday morning and we said, “You know what, let’s just get a bunch of company names and phone numbers in the system and then let’s start cold calling them. And let them educate us if there’s a market here. What are the objections, what is the price sensitivity? Can we convince anyone to outsource their sales to us?” That was the whole idea and within two weeks of doing that, we had more companies than we had salespeople in our outsourcing service.

Poornima Vijayashanker: Awesome.

Steli Efti: So, we just got started helping startups accelerate their sales, so scale their sales efforts by building sales teams for them. And from day one, cause two of my co-founders were technical and because I hated all the sales software that was out there with a passion, you take those two things together and we were like, “Let’s just build software that will allow our salespeople to do better than their competition and that will allow us to scale the services company.” So that was the whole intent of how Close.io was birthed. We never thought, “The services business sucks, let’s build a product company.” We never intended to release the software. We just started building it. And we didn’t really know, we didn’t have a vision. We just said, “Everything else sucks, let’s build something great.”

Poornima Vijayashanker: Yeah.

Steli Efti: That was it. But then, because we’re iterating very closely and because we were in this unique spot of running hundreds of sales campaigns for all these different companies and all these different markets, we built pretty unique software. And we started having a real strong point of view of what we thought was good sales software. And eventually, more and more people were telling us they want to buy the software and not just the services. And then we finally released it and it grew very fast and today that’s all we do.

Poornima Vijayashanker: So, like you said, you’ve had a chance to look at hundred of companies, probably even a lot of failed companies. Have you, aside from sales, noticed maybe one thing that everybody does that leads to the failure?

Steli Efti: No, I’ve not noticed anything. No, yes. And the thing that I’ve noticed is that, startups in particular—I mean, I think humans in general, but startups in particular—they lack focus and they are very bad at saying “no” to things.

Poornima Vijayashanker: OK, so how do we get focused? Do we meditate, get eight hours of sleep, drink green tea? What do we need to do?

Steli Efti: We could do all these things.

Poornima Vijayashanker: Yeah.

Steli Efti: I think all these things are helpful, but I think something very simple and tactical is to learn to say “no.” To say “no” to opportunities, to ideas, to things that interrupt you, to all kinds of things that we can get in too detailed that. But learning to say “no” and practicing the discipline of saying “no” is the simplest and fastest way that I know to gain focus.

Poornima Vijayashanker: But saying “no” is really hard.

Steli Efti: Yes. That’s why we don’t do it.

Poornima Vijayashanker: Yeah, yeah.

Steli Efti: Right? But it’s not physically hard. It’s not like…

Poornima Vijayashanker: Well, for some people is. They kind of internalize the…

Steli Efti: The emotional stress they have.

Poornima Vijayashanker: Yeah.

Steli Efti: Yes. So, it might manifest itself in some physical discomfort, most of the times it will, but it starts on an emotional level. And on a mental level. So, the reason why we have difficulty to say “no,” I think there’s two sides to that coin. One of it is that we have fear of missing out because we know that we can’t be certain if the decision to reject something is gonna be a good decision or not. Right? We never know when an opportunity pops up, when a person comes into our life, when something is proposed to us, saying “no” to this could this be a really bad idea.

Poornima Vijayashanker: Yeah.

Steli Efti: Right? Will I miss out on something great? Will I make a terrible mistake? How do I know that saying “no” is absolutely the right decision? And we never really know. It’s impossible to know for certain. So, I think that fear of losing out, that self-doubt that we have in our own opinion, and our own decisions, and the imperfection of data information that we have to make these decisions in a snapshot, lend us and lead us to saying “yes” to more things than to say “no.” The other side of the coin is that we all known that receiving a “no” sucks. Right?

Poornima Vijayashanker: Yeah.

Steli Efti: So, rejection sucks, receiving the “no” sucks, it creates discomfort, it creates an uncomfortable situation socially. If you say, “Hey, so I have a great idea, do you want to hear it?” And I say, “No,” now we have an awkward moment.

Poornima Vijayashanker: Right.

Steli Efti: Right?

Poornima Vijayashanker: It’s like, “OK, well I guess…”

Steli Efti: Oh, well…so I’m afraid of how you will react. You might get angry, you might get upset, you might get encouraged to push me harder. Now I have to push back harder. It’s all uncomfortable. I don’t want to hurt your feelings. For many, many reasons, it’s gonna put me in a more challenging situation than if I just say “yes.” “Yes” is easy, “yes” is safe. You’re gonna be happy if I say “yes.” I’m gonna make you happy. I don’t know if I’m making a mistake, but it’s easy to say “yes.” It requires less decision making on my part, less choices. And because of all these emotional and mental reasons, we tend to say “yes” way too much. We don’t say “no” enough.

Poornima Vijayashanker: OK, so you said there’s a number of things that you need to say “no” to. Let’s kind of go through a number of those things that you need to say “no” to, whether you’re a startup or a different organization.

Steli Efti: Yeah, so, that’s a lot. I think is starts with something as simple as, “Can I quickly interrupt you?” Which is one of those questions I hate because you already did, right?

Poornima Vijayashanker: Yeah.

Steli Efti: It’s a question that’s kind irrelevant, like asking for permission for something you’ve already done. So, a better way of saying if would be, “Sorry that I’m interrupting you, but I want to say something.”

Poornima Vijayashanker: Yeah.

Steli Efti: So, “Can I quickly interrupt you?” “Can I quickly share an idea with you?” This is a common scenario in a workplace where other people are around you working as well, where you are…maybe it’s good time, but more often than not, it’s actually not a great time for you to be interrupted. And again, because of social pressure, awkwardness, because there’s a human standing in front of you and it’s tough to send them away, we’ll say, “Sure,” independently if it’s the worst time ever or really a good time. And these interruptions, they are very costly. I think we all underestimate the cost of interrupting somebody once they’re in the flow. It’s not just those five minutes where you share those ideas with me, it is the 35 minutes it’ll take me to get back into the groove. And then sometimes, I’m not gonna get back into my productivity flow mood for the rest of the day, or the week! Right? So, a few minutes of interruption at the wrong time can be really damaging. So, “Can I quickly interrupt you?” is a good time to say “no” and practice saying “no.”

And a funny thing—this is something I learned from engineers—a funny thing is often people are very protective of their productivity. Is that once you go through this experience a few times, where somebody tells you “no,” you learn to ask yourself, “Is this really important enough for me to be rejected?” Because if it’s not, I don’t want to go and get myself a rejection.

Poornima Vijayashanker: Oh, yes.

Steli Efti: Because I know what the person’s going to say. You learn to be a little bit more mindful of, “Do I need to say this now? Can I send this in an email?”

Poornima Vijayashanker: Right.

Steli Efti: Right? So, you select the channels a bit better. And this is a good thing. You want, by saying “no,” to help others around you to respect your productivity. To choose their channels of interruption carefully and, with that, elevate you and your own productivity and the things you are able to do. So, “Can I interrupt you?” is a really good example. It happens a lot. Meetings are another thing in the workplace, right?

Poornima Vijayashanker: Yeah.

Steli Efti: Being sucked into meetings without any rhyme or reason, having these meetings be very long… So, when people send me an invite to a meeting, typically I’ll just reject it. I’ll just “no” it and go, “No.” And then, if it’s really important for me to be there, they’ll send me an email and they’ll try to convince me. And then the next thing that I’ll do is, “Why is there 60 minutes?”

Poornima Vijayashanker: Yes.

Steli Efti: Why not 30? Why not 15? Why do we need to spend so much time on this?

Poornima Vijayashanker: Right.

Steli Efti: So, saying “no” in how people use up your time.

Poornima Vijayashanker: Right.

Steli Efti: Right? Meetings is a good example, but then there’s so many things for startups more in generic, not in the workplace, where it’s like business opportunities and all that.

Poornima Vijayashanker: Right. Yes.

Steli Efti: Partnerships.

Poornima Vijayashanker: Yes.

Steli Efti: “Your startup has zero users, our startup has zero users and customers, let’s sit down and think about a partnership to combine our lack of traction because magically it’s probably gonna be great. Because in ten years, you’ve told me your vision is to own the world and in fifty years, we’re gonna be the biggest thing ever. So, we should partner up right now, while there’s still time, right?”

Poornima Vijayashanker: Sure.

Steli Efti: So, there’s all these meetings, over meetings, over meetings. Business partnership, proposals for business partnerships that when you actually challenge the question, “Why does this company want to sit down with us?” There’s no really good reason. There’s no really good time. They’re not really mindful of this. And if you challenge it, you’ll find out that it’s not a good use of our time to go and meet with this other company right now and try to come up with some kind of a partnership. Partnerships, and then experts, right?

Poornima Vijayashanker: Yeah.

Steli Efti: People that seem important.

Poornima Vijayashanker: Right.

Steli Efti: Maybe they even are important in some context. I’m sure everybody’s important to somebody. But, they can’t help you right now with your number one priority. We’re not raising money right now. We’re profitable, we’re growing really fast, we’re happy where we are. Everyday, there’s some really fancy investor with a really—

Poornima Vijayashanker: Oh, you get those too?

Steli Efti: Yes! With name recognition.

Poornima Vijayashanker: Yes.

Steli Efti: That want to have coffee. So, I love coffee, but I can only have so much coffee in a day, even as a Greek person. So, I have to say “no” to these things because they have no purpose right now. It doesn’t matter how many millions you have or how many billions you manage, or how well known you are. So, if I take a selfie with you, somebody will think I’m cool or important. Are you helping me help my customers today? No? Then we cannot meet today. There’s no purpose to this. So, investors, advisors, consultants, all kinds of people that have the appearance of importance. So, you think, “Maybe this person can help us. Maybe this person can give us money at some day.” But that can’t help you with what your top priorities today. You should just say not.

And that could go on at events, meetups, networking, all kinds of things. Suggestions from, even users or customers, on what to build around your product. There’s many, many things where you have to say no. And it takes discipline and it takes energy, but if you know what’s truly important…knowing what’s not important is equally empowering as being very aware of what is important. Right? So, those are, off the top of my head, just some of the things that happen every single day. Where I see startups, they waste 80% of their time with the things that are not the most important thing they could be doing. And if they learn to say “no,” it would make a dramatic difference in their odds to succeed and execute.

Poornima Vijayashanker: I have lot of people in the audience who are very nice and they’re probably thinking, “Well, you know, Steli and Poornima, it’s easy for you guys to say ‘no,’ but I could never do it. I don’t want to be impolite. Or I don’t want to be rude or, yeah, I don’t want to miss one of those opportunities.” So, maybe we can coach some of the audience out there on how to go about saying “no.”

Steli Efti: Yeah, so I think there’s a number of things. There’s three simple principles to learning to say “no.” One is, just like everything in life, if you want to get good at something, you have to do it often.

Poornima Vijayashanker: Yes.

Steli Efti: Right? So, get used to saying “no” a lot. The next thing is you want to do it politely. There’s no need to be an asshole about things and the way you deliver the “no” matters.

Poornima Vijayashanker: Sure.

Steli Efti: I’m not saying that doesn’t matter. So, if you do it in person, doing it with a smile, doing it in somewhat of a sensitive tone, and maybe adding a sentence that explains the “no.” Right?

Poornima Vijayashanker: Right.

Steli Efti: Both my co-founders taught me a lot about saying “no.” They’re both engineers. But they didn’t necessarily try to be polite or explain why.

Poornima Vijayashanker: Sure.

Steli Efti: They just said “no” and turned around and kept working. So, adding a sentence or two and saying, “I’d love to give you time. Right now is very bad for me. Can we do this later? Can you shoot me a quick email about this? Is this urgent or is it important?” Right?

Poornima Vijayashanker: Right.

Steli Efti: If it’s important, we can talk about it later. If it’s urgent, yes let’s talk about it now. If the house is on fire.

Poornima Vijayashanker: Yep.

Steli Efti: So, you want to do it politely. You want to get in the habit of doing it often, especially if you’re somebody that’s like, “Oh my God, I don’t know how to say ‘no.’” Then, the only way that you’re gonna learn to say “no” is by doing it often. Not once every two years. You have to get into the habit of it. And then the third thing is that you have to do it decisively. So, because we don’t say, we like to say “no” in the most “yes” way possible, right? We won’t say, “I don’t have time right now.” We’ll say, “Could we do this maybe in five minutes?” But five minutes is a bad time as well! Or, “Well, we want to meet up with you guys for a business partnership.” Or, “We’d love to meet up with you guys. Today is bad. Could you reconnect with us next week to find a time?” Next week is also bad. Right?

But because you don’t want to just say “no,” you wanna leave the door open for a “yes.” But all you’re doing is you’re wasting their and your own time. You’re just making it worse. Because if you do it politely, I find that people respect honesty and the people that don’t, they’re not the people you want around. They’re not gonna help you. They need to figure some other issues out before they show up in your life and working with your business. So, leaving the hope alive, that this “no” will turn into a “yes,” is a bad idea unless you really want to say “yes” and you know you’re gonna say “yes” next week. So, these are the three things: say it often, say it nicely and politely, but say it decisively. And the third thing is probably one of the hardest things because you’re not sure.

Poornima Vijayashanker: Right.

Steli Efti: You’re saying “no” to this investor, but what if you’re gonna need money in the future? You’ve read some article, never say “no” to investors, always take their money. Maybe other people are smarter than you, maybe you’re committing a company-killing mistake. So, because you have some self-doubt about your own decisions, you don’t say “no” decisively. You need to get comfortable with saying “no” and making a mistake. So if it turns out that I tell you, “No, I can’t do this for you. I can’t meet with you.” And this turns out, in the long scheme of things, that it was a bad decision, then I’ll have to live with it.

And what you want to optimize for it not never making a bad decision, it’s making decisions really fast, and learning once you uncover that you’ve made some bad decisions. But we’re all gonna make some bad decisions, we’re not perfect. And getting comfortable with that ambiguity of, “I’m saying ‘no’ to this, although I’m not sure if this a mistake or not.” Learning to get comfortable with this discomfort, it sucks, nobody loves that, but you train. You put the training wheels on, you do it every single day and eventually you get more comfortable with it. And better at it.

Poornima Vijayashanker: All right, so practice saying “no” often. Now, there are times…you mentioned the thing about customers, right?

Steli Efti: Yeah.

Poornima Vijayashanker: And so, there are times where customers might wanna sneak something into your roadmap, or even an employee might come back and say, “Oh, you know, I talked to five customers and I know we’ve got feature XYZ, I really want to satisfy this other customer out there. And we want to get them to renew, so let’s shove this into the product roadmap.”

Steli Efti: Yeah, that’s a really bad idea. Right?

Poornima Vijayashanker: Yeah.

Steli Efti: So, in general, I think it’s hard to say “no” to the people closest to the money and the people that matter the most, which are your customers. Salespeople in particular are exceptionally bad at this.

Poornima Vijayashanker: Notorious.

Steli Efti: This is a reason why there’s a lot of friction, usually, between sales and engineering team. It’s because sales over-promises.

Poornima Vijayashanker: Right.

Steli Efti: And they don’t over-promise because they like over-promising. They over-promise because they feel the pressure that, “If I don’t say, ‘Yes, we’re thinking of building this,’ I’m gonna lose the deal.” Right? And they want the deal so much that it’s hard for them to say “no.” So, they always kind of give the impression…even if they don’t say outright, “We’re gonna build this for you,” they give the impression that, “We’re probably gonna build this for you.” So, I think there’s two things where you need to learn to say “no” to customers. One thing is you need to learn to say “no” to the wrong customers. It is a very crucial thing and just yesterday, funny enough, I had a another founder tell me the story of the Southwest Airlines CEO.

It was this story of this lady that was flying with them hundreds and hundred of thousands of miles, or tens of thousands of miles, or something crazy. And one day she said, after years and years of flying their airlines, she sent him an email. And it was basically complaining that she spent so much money with the airline, she’s flown so much with it, and there’s no perk for her, no miles, nothing, so “we appreciate your business,” no stickers. Nothing for her. And that Southwest Airlines sucks and they need to get their game together, otherwise they’re going to lose her as a customer.

Poornima Vijayashanker: Right.

Steli Efti: And his reply, apparently famously, was, “We will miss you.”

Poornima Vijayashanker: That is…

Steli Efti: Right? And I don’t know if he wanted to come across and dick or not, or if…

Poornima Vijayashanker: Well, their brand is that. Yeah.

Steli Efti: But it’s their brand, right? Basically, the main message here was that he was like, “Well, we like your business, but what you want us to be is not who we are.”

Poornima Vijayashanker: Right.

Steli Efti: “So, if you want that, you’re not our customer, we’re not your airline. You should go to somebody that really does a great job at that.” I think that comes with knowing what customer you can serve really well and what is authentic to your brand and your business. And knowing that means knowing who’s not a good fit to your business. And a lot of times, companies, they just think, “If there’s a customer that has money and willingness to pay us, we should try to get that money any way possible.” That is a really bad idea. It causes all kinds of issues, it causes your customers to be unhappy, it causes them to churn, it cause them to tell everybody else how much you suck. It causes them to be asking your support team everyday times for 100 times for a 1,000 different things.

They will just create a lot of cost that is hidden and that will make this a very bad investment in your business. It sucks for morale to see customers go and see them complain and hating everything you do. So, it’s just bad all around. It’s important for businesses to know who is our customer and who isn’t. And to learn to say “no” to customers that are not a good fit to your business and this is something that most companies fail at. And so, for the first thing we do at Close with every lead that comes our way, is we qualify them. And qualifying them means to us two simple things. First, we try to figure out, “Can we truly help you? Is our product the best product for you on the market or this there something better out there for you?” And then, “Can you help us?” Right?

Poornima Vijayashanker: Yeah.

Steli Efti: How good will you be as a customer? How big of a customer can this be? How close will this relationship be? Only if the answer is “yes” to both of these questions do we even try to sell you anything. Right?

Poornima Vijayashanker: Yeah.

Steli Efti: And close the deal. So, when you say “no” to customers that are not ideal to you, a lot of times, startups, they get sidetracked to enterprise businesses. They’re like, “We’re gonna be a small, professional customer business. SNB is gonna be our market and then there’s a big company that sends them an email that says, “We’re interested in your product.” And boom, the startup will lose all their focus and go, “Well, we didn’t wanna be an enterprise business, but Google wants to pay us lots of money.” Right?

Poornima Vijayashanker: Nobody says “no” to them.

Steli Efti: Nobody says “no” to them. It’s such a sexy thing, it’s so hard to say “no.” I did exactly this is the first startup that I failed. It was like an in consumer product and Google sent us an email that they wanted to buy it. And we were like, “Google wants to buy it. Maybe we should be in enterprise sales.” It turned out to be a really bad idea. So, you need to say “no” to the wrong customers. And then, you need to learn to say “no” to customer requests if they’re not part of your roadmap. So there’s two things. You always want to listen to what your customers have to say. You wanna, not just listen to listen, listen to learn. And you want to find out, not just what they’re proposing as a solution, as a feature they want seek in, but why.

Because customers, usually they are the best in the world at describing their pain, but they’re not great at prescribing a solution to that. Otherwise, they would be product managers and building products, right? So, you wanna maybe not pay as much attention to the feature they want, but the problem they have. But what we have done at Close.io—and I do this with lot of things—it’s kind of a little hack to learn when to say “no” or not, to stay disciplined on that. Is that instead of just having a product roadmap of “Here’s everything we want to build,” is we have an anti-roadmap.

Poornima Vijayashanker: I love that. Yeah.

Steli Efti: Right? So, we wrote down, “What are all the things we’re never gonna do?” And we revisit that, right?

Poornima Vijayashanker: Yeah, sure.

Steli Efti: We’re aware enough that we might be wrong.

Poornima Vijayashanker: Never say never. Yeah.

Steli Efti: So, once a year, we’ll sit down and we’ll go, “Is this still true? Why is it still true?” We’ll challenge ourselves on this. But we need to have clarity on what we never want the product to become. And then when a customer asked for something that is on that anti-roadmap, and if there’s no other solution to solve that issue, we will just tell them. And you need to learn to tell them, “You know what, I understand why you want this. Here’s why we will not build this, most likely. And I want to be transparent. If that’s a deal breaker, I want to help you transition to a better solution. If not, then I’m happy. We want to keep you.” But I wanna create the right expectations, so you need to say “no” when they want something you know you’re not gonna build. And it’s tough.

Poornima Vijayashanker: Yeah.

Steli Efti: So, yeah, those two things. Say “no” the wrong customers and say “no” to customer feature requests that you know you’re not gonna build.

Poornima Vijayashanker: So, I love the anti-roadmap. Now, for those people out there who maybe are individual contributors and they are still getting stuff that’s on the roadmap, but it just seems like they can’t get it all done. Do you have any solutions for them?

Steli Efti: Yeah, so one thing that I like to use myself is…I think we’re pretty familiar with using to-do lists, right?

Poornima Vijayashanker: Yeah.

Steli Efti: And we all have, either in our mind, or on a piece of paper, or on some tracking tool, we have a way of writing down all the things we want to do. Something I like to use is the not-to-do list. And so, I will have a list everyday of things I’m not gonna work on today, not gonna tackle. And this is just a simple hack, it’s just a psychological thing for me to take a moment at the beginning of my day to know what I’m gonna say “no” to. Even if I’m tempted or even if I don’t pay attention for a moment somebody kind of tricks me into something. And just having that not-to-do list helps me when I get sidetracked to go, “Wait a second, I said today I’m not gonna work, I’m not gonna get distracted by these type of thing, because I need to finish this other project.”

Poornima Vijayashanker: Right.

Steli Efti: So, it just helps me stay focused and I try to maintain the not-to-do list. It’s even more important to me a lot of the times than the to-do list itself.

Poornima Vijayashanker: Very nice. I have my not-to-do, but it usually becomes to-do list. I delegate it away.

Steli Efti: Yeah, yeah.

Poornima Vijayashanker: Very nice. So, we’ve talked about what to say “no” to. Do you ever say “yes?”

Steli Efti: Never.

Poornima Vijayashanker: Never?

Steli Efti: Never, I would never say “yes.” Right? So, of course.

Poornima Vijayashanker: I had to like wrestle you to come on to this show, right?

Steli Efti: Of course, right, of course. See, I do say “no” to a bunch of different requests, so I don’t say “yes” to everybody. But to somebody like you, of course.

Poornima Vijayashanker: Yeah. Thank you. Yeah.

Steli Efti: Yes. So, to me you wanna simplify the things you say “yes” to. And you want to simplify it to the things that are truly important in life. And sometimes, important in your life might be something different to somebody else. But in business, in that context, anything that helps you get more successful customers. And the important thing is successful, and not just more customers. Everything that helps you get more successful customers, and everything that helps you make your customers more successful, are things to say “yes” to usually. And of course, you want to weigh these things because there’s 100 things we could do for the product or in the marketing and selling, in a variety of departments in the business. To get more successful customers, to get our customers more successful. So, you want to weigh what is the thing that will have the biggest impact? What is the thing we can execute the fastest? There’s still ways to order the list of things, but typically, things that help us make our customers successful, and more successful, and get us more successful customers, are the things you want to say “yes” to.

So, one of the things that helped us a lot, in terms of being focused and knowing what to say yes to, was something I learned from Paul Graham, PG from Y Combinator. The first week when we went through YC, we had a conversation with him and his whole focus was to try to figure out that one metric that would be the biggest signal to success. Right? So, we would give him a number and he would challenge us, “Is that really the number?” And we would go back and forth, similar to Facebook’s number being active users versus MySpace number being new signed up users, right?

Poornima Vijayashanker: Yeah.

Steli Efti: You take a better number for success. For us back then, for the software that we were doing at the time, it was fully subscribed, paying users.

Poornima Vijayashanker: OK.

Steli Efti: So, he said, “Well, if that’s the number, the core KPI I would wanna track, can you promise me to grow that number 10% at least every single week during YC. During the next three months.” And we said, “Yes.” So we shook hands on that. And as he was trying to let go of my hand, I was like, “Do you have you have your credit card with you?”

Poornima Vijayashanker: Yeah! Nice!

Steli Efti: And he was like, “That’s exactly why I want you guys! Yes!” And then after I signed him up, I went through the entire room of startups that were waiting to have an office hour with him and tried to sign up as many people as possible.

Poornima Vijayashanker: Awesome.

Steli Efti: And, you know, in the early days, it’s easy because you have 10 customers and you have to just get one more the next week and you have 10%.

Poornima Vijayashanker: One more, yeah.

Steli Efti: But it’s also difficult because you’re a nobody and the company doesn’t exist. And nobody knows about you and the product is buggy, and all that. Every week it gets progressively harder, but one beautiful thing of that tactic is that every week, before we committed to the projects of the next week, we sat down and we were like, “What is gonna bring us 10%? What’s gonna bring us 27 new paying customers next week?” And then when you a have a request for a business meeting with some ginormous company, you’re like, “Well, that’s not gonna get us 10 more users or 10 more customers next week. So, we’re saying ‘no’ to this.” And similar to the product, we looked at all the things we wanted to build and we’re like, “Which one of these features will bring us subscribers and paying customers?” So, it was a nice hack in the early days to stay laser-focused and know what to say “yes” to. And what was the thing that would get us to that goal next week, right now?

Poornima Vijayashanker: Awesome. Well, thank you so much, Steli, for joining us today on Femgineer TV. Any last word for our audience?

Steli Efti: Yeah, so for anybody who wants to practice getting rejected or rejecting, you can send me an email. Steli@Close.io. And pitch me either your product, your software. If you want to work, pitch yourself at Close.io, pitch yourself. And I will reject you. Not because of you, it’s nothing personal, just to get you into the habit of working with rejection and maybe following up with me one more time. Or, maybe if you don’t want to do that, just see if I can live up to what I promise.

Poornima Vijayashanker: Yeah, see if Steli will say “no.”

Steli Efti: Send me an email and say, “Steli, I could be a customer, I could buy your book, I could be a listener of your podcast, or whatever. And then give me your best pitch, Steli.” And I’ll pitch you and you reject me. Besides that, if some of the things that I said today were valuable, I have a little podcast with a good friend of ours.

Poornima Vijayashanker: It’s a great, yeah, podcast.

Steli Efti: Hiten Shah. You can go to thestartupchat.com. It’s 22 episodes a week, each 20 minutes, so it very short. Two founder CEOs with very different perspectives, very different personalities. And we tackle technical things, like how to say to say “no,” but also out-there things like how the death of our parents affected us as entrepreneurs and religion in startups. All kinds of funky topics. So, if you like podcast, maybe you wanna check that out.

Poornima Vijayashanker: Yeah, I highly recommend it. I know I’m a subscriber. Awesome. Thank you, Steli.

Steli Efti: Thank you.

Poornima Vijayashanker: And thank you for joining us today, and special thanks to our sponsor, Pivotal Tracker, for their help in producing this episode of Femgineer TV. If you’ve enjoyed this episode, then please be sure to share it with your friends, your teammates, and your bosses, so that everyone will practice saying “no.” And subscribe to our YouTube channel to receive the next episode. I’ll catch you next time.

This episode of Femgineer TV is brought to you by Pivotal Tracker—build better software faster.


FemgineerTV is produced as a partnership between Femgineer and Pivotal Tracker. San Francisco video production by StartMotionMEDIA.

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