Never say “no,” but rarely say “yes.”

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Jason

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Everyone says small startups require focus. Say “no” to anything that distracts from your goal, your vision, your strategy, tempting though it is to explore all opportunities, hoping each time that this is the one that will catapult you from Mixergy listener to Mixergy interviewee.

Lack of focus results in half-assed initiatives, each interrupted by apparently greener pastures before you’ve invested the time and devotion it deserves. Learn to say “no!”

Ah, but then again you must also experiment with new ideas. Fail fast! Pivot! Test! Doubt! Always be collecting evidence that you’re wrong, always be trying new things in case you’ve been blind. Never pass up an opportunity to change, learn, grow.

So… how are you supposed to explore other ideas if you’re also supposed to be saying “no” to anything that diverges from The Plan?

Here’s what I do: I never say “no.” But I carefully qualify “yes.”

I learned this trick while still in high school. In the mid 90s it was clear that Apple had lost the personal computer battle and all their developers were fleeing like rats off a sinking ship into the ocean of opportunity that was Windows 95. As a maven of the Macintosh API and still willing to admit it, I landed lots of small contracting jobs fixing up code that other developers wouldn’t touch.

My typical rate was $25 per hour, which when you’re 17 seems like a lot of money.

One day I got a call from some poor schleps I didn’t want to help. They had just completed a new product written in Java and it was broken on a Mac, and could I help? None of their customers used Macs, so they didn’t think Macs were important, but then it turns out the main investor is keen on seeing the demo on a Mac, and when they tried it, it didn’t work. (Yay investors!)

I wanted no part of this. Java was new and known to be full of bugs, and anyway I was a C/C++ kind of guy, and I didn’t want to get involved in an academic fad language like Java. (So yeah, I simultaneously decided that (1) Java is a fad and (2) I’m sticking with the Macintosh Toolkit; five years later one those platforms had zero developers and the other had one million, and I picked exactly wrong.)

I could have said “no.” Given my specialty and my goals, traditional career (or startup) theory says I should have said “no.”

But instead, on the advice of an older, wiser friend, I showed up at their office and said I’d do it for $100 per hour.

I fully expected them to laugh in my face. Maybe I would receive a condescending talking-to about the audacity — nay, the impudence! — of someone of my age and experience walking in here and demanding such outrageous compensation, someone who, let’s be clear, is technically too young to even enter into a legal consulting agreement in the first place.

And then I would have slinked out of there, embarrassed but ultimately no worse for wear.

But that’s not what happened. They looked me up and down, their faces revealing both incredulity and surrender. They said OK. An hour and a half later, everything was working. The difference between saying “no” and getting $150 for about two hours of my life was all in how I phrased “yes.”

And I have stories that went the other way, which are just as important.

At WPEngine, for example, we’re constantly talking to large bloggers who want to move to our system. These are folks with big requirements — tens of millions of monthly page-views, traffic spikes, custom code, perfect up-time, and 24/7 support.

Should we take on those clients? Maybe not — after all the stated goal of WPEngine is to serve the “middle market” — the folks who have outgrown free blogs, don’t like maintaining their own servers, but aren’t so large that they have extreme hosting demands. That’s our profitable niche.

So we think. But if we just say “no” to these big bloggers, maybe we’re closing the door on big, important orders. Perhaps the entire company should pivot — maybe it’s easier or more profitable to serve 100 large blogs than 1000 medium ones. But how do we know if we say “no?”

Then again, if we say “yes” we might really be screwed. If we can’t provide them the human and technical service they expect, now we’ve hurt a blogger, we get bad press, and we’ve wasted a bunch of time. Or even worse, we hold on for dear life but it’s extremely unprofitable, and now we have this expensive, time-consuming albatross around our necks.

So we’ve said “yes” by quoting high enough that we know for certain we will make good money on the deal, so much so that it will partially fund something else we want to do. Maybe that means a big new advertising campaign, or hiring another WordPress expert for our staff.

There was one especially large customer where we literally thought of it like this: This deal needs to be big enough to not only make a reasonable profit on the operating expenses, but pay for an entire developer’s salary (assuming bootstrapped, put-in-elbow-grease-for-stock low salary), because we know this new customer will occupy a lot of that person’s time, but all the remaining time we get “for free.”

So we’ve given a lot of qualified yeses, and many were rejected.  (I wish I could name all the blogs who turned us down, but I feel it’s a violation of trust, especially for those who have significant relationships with their current providers.)

(P.S. Now we’re able to say “yes” to those same bloggers, but that’s because over time we’ve taken on bigger and bigger customers, and now a blogger with 30 million month page-views is something we know we can handle.)

At Smart Bear I used this principle yet again. Companies would fly me out to help them implement a peer code review process, which half the time actually meant that “management” wanted me to convince everyone else that code review was a good idea, and invent a process painless enough they might actually do it.

From a business perspective, this was a poor use of my time. These folks had already bought our software, so it didn’t sell more seats. When you counted a travel day on either side of the engagement, the time I lost could easily have been spent landing just one additional customer or make some important changes to the code, either of which almost certainly makes us more money.

Therefore, initially I just said “no.” But of course that’s wrong. Eventually I said “yes,” but the price was $2500/day including travel days, which for these sorts of engagements is unheard of. (Typically you get reimbursed for travel expenses but not paid for that time.)

This immediately cut out most trips, but some remained.  Of course on those trips I’d haul in $10,000 for a week of easy work, which I’d often combine with a long weekend with my wife. And anyway those people really wanted me there, which made the work that much more enjoyable.

So the principle is easy: Set the conditions of “yes” such that:

  1. If they say “yes,” you’re happy because the terms or money are so good, it more than compensates for the distraction, possibly even funding the thing you really want to do.
  2. If they say “no,” you’re happy because it wasn’t a great fit anyway, so it’s not worthwhile for a small return on your time and effort.

So that’s the punch-line, but before you go I’d like to over-emphasize the idea of “funding the thing you really want to do.”

This can take many forms, but it’s the single best way of figuring out how to qualify your “yes.” Examples:

  • “Yes” if it pays for an entire additional person.
  • “Yes” if this extends the runway of our startup by at least three months.
  • “Yes” if it completely funds development we’d like to do anyway.
  • “Yes” if it means one of the co-founders can quit her day-job.
  • “Yes” if it will completely pay for three new marketing efforts.

Think of it like another form of funding. Funding is always a distraction from actually running your business, so the amount of money you get must be transformative to the business. Each of those bullet points are transformative, in that each has the potential to move your company from “hobby” to “real business.”

And if they say “no,” you’re fine with that, because it would have been a distraction which wouldn’t have moved the needle.

How do you say “no” by saying “yes?” Do you have stories either way? Does this technique make sense for you? Let’s continue this in the comments.

35 responses to “Never say “no,” but rarely say “yes.””

  1. I LOL’d when I read the consulting quote part. I used to do that all the time with QNX and later with NeXTSTEP. Yes, I can pick EOL technologies as well as the next guy.

    You want to buy a slightly used Betamax, Laser Disc, Super-VHS, HD/DVD player?

    Great point on the consulting for sold clients side too.

    -XC

  2. Nice post Jason. Another important thing to consider is that you don’t want to take short term profit at the expense of long-term strategy. Even if the deal lands you lots of money now you have to weigh it’s impacts on the company a year from now. If it still looks good then charge the money and go for it.

    • Short term revenue – at the expense of long-term strategy – is the typical tradeoff at a bootstrap startup. Then you get into the quandry about what customers are willing to pay for versus what you think should be in demand.

  3. This is great advice, and can be applied quite well to any endeavor. Even as a small local office supplies dealer, these tactics can be used to avoid, or at least make worthwhile, those small, time-killing requests that come up from time to time.

  5. Absolutely brilliant Jason! Found this from a friend’s twitter. This advice will go a long way with anyone trying to do something themselves.

  6. This exact topic was covered by Gerald Weinberg in his wonderful and hugely popular book: “The Secrets of Consulting: A Guide to Giving and Getting Advice Successfully” in 1986. Plus ca change, plus c’est la meme chose.

  7. Great article! Ironically I exercised the same philosophy yesterday while giving my wife advice on her business. Let’s ignore the danger of giving one’s wife advice on her business for now.
    My wife is a personal trainer who most often trains her clients in our house gym. A former client wants her to train him at his house (he’s elderly and trustworthy). My wife likes the opportunity to work with him again, but the downside includes carting equipment to his house, in addition to travel time and expenses.
    I advised her to offer double her normal “our-house” rate for “your house” training.
    She was flabbergasted, but she eventually took my advice, and her new client has paid for a couple of weeks at his house, switching to our house after that.
    It was a perfect result to a “qualified yes” situation. Thank you for reminding us all that “Yes, but only if it’s worth it” is a perfectly good business strategy.

  11. Thanks a ton for writing up such a wonderful piece. Having more than 4 ideas in mind and a dozen in documents, I would now apply your advice while deciding about my next project

  12. You are right on the money. We call it “say ‘no’ with a price”.

    Think about it this way: You have a target for your business – a specific type of business and customer that you would like to be working on/with, day in and day out.

    That is your bull’s eye of the dart board. If you get one of those deals, you price it right, to get the business.

    But if the opportunity is one ring away, the price goes up. If it’s two rings away, the price is higher. If it’s not even on the same board, then the price is very high.

    I once told a client I would push a broom if the price is right. And if they don’t specify “who” does the work, the price is cheaper (I can hire my son, for instance.)

    • You do realize that “saying ‘no’ with a price” only work for short-term gigs and not sustainable for the long term. Otherwise it will become a “golden handcuff”. In other words, if someone really rich hire you to push a broom for 12 hours a day in a five years consecutive period (simply because he can afford it), you would probably burn out and your prized technical/business skills may become unmarketable at the end of the tenure.

      • Charge enough for that broom pushing and you could retire at the end of the 5 years! ..someone wanting to pay excessive rates for something wouldn’t be the worst problem.

  14. Great article. I wish I’d read this before being one of the convention chairs at a con my college put on this year. A lot of my yes’s should have been more qualified. Thanks!

  16. Great post and very timely for me. I just finished sending an email to a potential customer that follows the advice in this post exactly :)

  18. I’d like to call myself an “Opportunist” and I have always had a difficult time in “really” analyzing if this new “opportunity” is worth it, well now I have some tips to base it off of!

    Thanks!

  22. Interesting… my views weren’t as polished but I’ve felt the same way about business for a while now. When I finally started applying it I had the same experience of fewer people who took me up on my proposal, but it was vastly more worthwhile to do so when they did.

    Also, $25/hr sounds like a lot to me now at 24, but that’s the economy and a late start in deciding my life’s profession for you.

  24. I really love this perspective on boostrapping business, primarily because a “no” will close a door permanently, but a “yes” always creates new opportunity.

    To apply a principle from a different discipline, in Improv comedy, the golden rule is “Always say, ‘yes, AND,’ never ever say no.” In order to keep the momentum and laughter building onstage, you can’t afford to turn your back on a possibile storyline.

    I think it’s very similar when you bootstrap. Saying “yes” keeps that storyline open, which may end up being the avenue that allows you to “do what you REALLY want.”

  25. Great article! This is a difficult lesson to learn for new business owners who just want to take on every new client and think they must. I actually thinking learning to say no is more difficult than firing a bad client later on, but can save you lots of headaches.

    Thanks for sharing your anecdote’s as well.

  26. In some ways your approach is the seller’s inverse of the consulting buyer’s Orange Juice Test that is described in one of the DeMarco/Lister books (Peopleware, I think, but my copy seems to have gone walkabout). IIRC, they thought it could be highly useful when spec’ing out a project and getting bids from consultants to include at least one requirement that was somewhat unreasonable or would, at least, take a remarkable effort to satisfy.

    What you wanted to eliminate were two kinds of consultants. The first kind would just say no. The second kind would just say yes and act like it was easy to deliver your unreasonable requirement. What you were left with were consultants who would say yes but with a high, possibly even outrageous, price tag attached. Then you knew you were dealing with someone who was both honest and paying attention.

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