Entrepreneurship is an extremely competitive world. Its most fundamental facet lies in scrabble- for ideas, for funds, and gap in the market. The struggle continues for long for most start-ups and only a few are able to innovate and grow to a position where they are comfortable and out of the cutting-edge competition.
It is not surprising that chicanery or deception has become an undesirable part of entrepreneurship. While pitching ideas, discussing the scope of it and looking for capital investments, entrepreneurs tend to over-exaggerate, falsify and distort reality to sound promising enough and convince the crowd. The power to convince has been seen as vital to the growth of any entrepreneur. In fact, some of the greatest entrepreneurs have been celebrated for this including Steve Jobs who was said to have the power to convince anyone of anything.
However, there appears to be a fine line between persuasion and falsifying and a slippery slope at that. Exaggeration can often lead to falsifying and later fraud, as one would need to keep acting upon the claims they may have made in excitement. Such practices do not only have a negative effect on the start-up itself but the over-all start-up world as well. Deception and falsifying lead to market inefficiencies, locks up resources in doomed ventures by prolonging their life unnecessarily and making it an untrustworthy world for venture capitalists to invest in.
Most entrepreneurs do not realise the mistake they have been making and are able to rationalise or justify their lies or exaggerations in their mind by thinking that it is for the greater good, or that they are protecting their people or by the simple truth that they see everybody around doing it too. However, falsifying harms the entrepreneur himself more than his business or the industry at large. Studies suggest that ethical dilemmas and stress caused due to speaking lies reduce job satisfaction and causes burnout.
On the top of it all, being an honest and ethical entrepreneur is easier than it sounds. The key is to follow your instincts of what a good person would do in any given situation. Here’s how to do it:
Paint a true picture instead of exaggerating, if it inspires you enough to start something, it will inspire others too- When you pitch an idea, essentially it is an evidence-based proposition. You have conducted your market research, looked at the possible pitfalls and scope of success and have come to believe in it. When discussing it with an investor, being honest and being forthright might seem to be at opposite ends as that would mean discussing risks and potential failures as well. However, put trust in your vision and make an honest pitch. Not only do you owe them the true picture before they invest their money and resources, it is a healthy way to start a long-term business relationship.
Birds of the same feather fly together- The company you keep makes a huge difference in determining your morality as well as what you consider right or wrong. They also act as the protectors of your moral compass, and an honest group of people will tell you when it points in the wrong direction. It is important to surround yourself with co-founders, investors, mentors etc who not only enrich you with their experience but also warn you against possible wrong turns you might be taking.
The world of business is a brutal and insensitive one and it is easy to believe that not being truthful is a part and parcel of creating a stable business. However, being strategic and tactful is different from being deceitful in anyway. Honesty is the best policy stands true in the business world too!