Lies, damn lies and marketing lies: welcome to my world

Ever wonder what we high-tech venture capital firms do? I bet you think we spend our days searching for the next great Giga-Mega Networking Breakthrough, analyzing state-of-the-art technology and meeting with "insanely great" companies that are each "the next Cisco."

Wrong! Actually, we spend our lives in endless meetings with people who are lying to us. They line up at our door with their PowerPoint presentations, baying for attention or money. Some days it's so bad we have to disguise ourselves as Federal Express employees just to get into our office. If that's not irritating enough, they all come with their own nifty brand of chatter, known as the 10 Great Lies.

Lie 1: "The market is $2.5 billion today . . . going to $7.2 billion in 2003!" What's your source - Forrester Research? Be serious. Then, when asked about the 10 leading firms, you admit your total sales don't exceed $200 million. Anyone know a market where the 10 leading firms have just 10% of the market?

Lie 2: "Fidelity, Ford and GE have selected our product!" No, they haven't. They may have agreed some day - not too soon - to let you run a free trial, but even then I doubt it. The only user is probably your investment banker, who hopes to do the IPO and buys one of everything. Some investment bankers, such as Goldman Sachs, have done more product endorsements than Michael Jordan. Call me back when someone puts your product into a production environment and runs the company on it.

Lie 3: "The other venture capitalists are behind us!" Sure they are. They're so far behind you they're invisible. Your original venture team has bailed and you are hemorrhaging from every known orifice. What your venture guys want is someone - hell, anyone - to put up some fresh money so they don't have to write down their investment.

Lie 4: "Cisco wants to be our strategic partner!" You betcha. Cisco has more than 10,000 employees, almost as many as it has strategic partners. If every strategic partner of Cisco's brought in one can of food, we could cure world hunger. Furthermore, Cisco may be your strategic partner, but are you theirs? One of their top 10? Top 100?

Lie 5: "We have a world-class management team!" Frankly, I haven't seen so many bozos since the circus left town. Your team hasn't been on anything other than an unending string of failures. You have more wannabes than Hollywood.

Lie 6: "We have no competition. And what little competition we have, we are kicking their butt!" Your competitors have more than vaporware: They have products that actually work, a support desk where they take calls and customers who are continuing to buy. You, on the other hand, do have as nifty a set of four-color slides as I have seen all week.

Lie 7: "The Industry Standard is planning a major story about us!" Righto. You are paying your public relations flack $15,000 a month to send out press releases that are never, ever read. Some publications heat their buildings by burning them.

Lie 8: "We are considering a public offering in the fourth quarter!" You might be, but investment bankers have some standards - er, scratch that - and even so, the I-bankers won't return your phone calls within your lifetime.

Lie 9: "We aren't a business-to-consumer company; we are business-to-business!" Actually, last month you were business-to-consumer, but nobody bought, so you did a quick fix and now you can claim to be business-to-business - and still no one will buy. Really, you are a B2L company (born to lose).

Lie 10: "We are the new paradigm!" Whatever the hell that means. If I had a dime for every company that has told me it was the new paradigm, I would be rich enough to pay Bill Gates' legal bill.

Anderson is senior managing director of Yankeetek, a Cambridge, Mass., venture incubator. He is also chairman of The Yankee Group and the William Porter Distinguished Lecturer at the Massachusetts Institute of Technology. He can be reached at handerson@yankeetek.com.