The five kinds of "No" — and what they can teach you

The first truth of entrepreneurship and investing: The biggest new ideas are contrarian. They go so deeply against commonly held assumptions that they seem not only risky but flat-out ridiculous. They’re the kind of ideas that draw a lot of “Nos.”

And this makes sense: The fact that an idea goes against conventional wisdom is probably why other large companies and competitors haven’t already tried it—and why other entrepreneurs haven’t already succeeded at it. When you have a contrarian idea, the kind that almost everyone says “No” to, it leaves you the space to create something. And to create something big, you need a lot of space. This is why “The Contrarian Principle” is one of the four underlying principles in my book Blitzscaling. Being contrarian and right gives you a critical head start on achieving scale.

We see this all the time with truly big ideas. In the early stages of Google, search was seen as a terrible way of making money in advertising. Valuable ad inventory was measured by page views and time-on-site. And what does search do? It shuffles you off the site as fast as you can go. That didn’t strike anyone as a good business model. But Google of course stuck with it—and rewrote the rules of online advertising.

Or take Airbnb: At the beginning, the concept seemed absurd: Someone’s going to rent their spare room to a complete stranger—for a night? And someone’s going to rent a room from a complete stranger? Who are the freaks on both sides of that transaction? When you have an idea like that—which is so far outside conventional understanding of how things work—very smart people will tell you: There’s no there there. But they may very well be wrong.

So if you’re pitching a contrarian idea—an idea that questions the status quo, that imagines a different and better way of doing things— brace yourself to withstand and learn from a string of rejections. And when you hear that chorus of “Nos,” start looking for other signs that you’re on to something.

Now, hearing a No never feels as good as hearing a Yes. That’s why it’s important to develop a mindset that can gather and analyze feedback – good and bad – once you’ve gotten off the call, or home from the coffee appointment, and can replay the conversation. There are clues in every No that will get you closer to your first yes.

What you’ll find, when you analyze, is that most “No”s fall into one of 5 camps:

1. The lazy no

Potential investors or customers may completely miss the point of your idea or simply be ignorant. Either way, once it becomes clear that they aren’t trying to gain a better understanding, you need to move on from these naysayers—quickly. Their “No” gives you no additional information. Be ruthless in leaving these lazy “No”s in the dust.

2. The squirmy no

Some great ideas make investors want to say “Yes” and “No” in the same breath. This signals that the idea might be very powerful, although of course it might be a very attractive disaster. 

LinkedIn turned out to be exactly that kind of “No.” Its value was totally clear to me. But as I began talking about it with my network, no one got it. I’d hear, “Is this a service for people who intrinsically like networking? If so, it’s not for me. Networking is like flossing—I know it’s important, but I don’t like doing it, and want to do as little as I can.”

And yet, everyone seemed to think the LinkedIn approach to networking was a great idea—for someone else. Again and again, LinkedIn was met with a resounding “It’s not for us — but here’s who it could be for.” Young people thought it could be a valuable service for experienced professionals. And experienced professionals would say, “That could be a good service for young people.” Technologists saw it as a service for the traditional industry; old industries thought it was for the newfangled tech industry.

This classic squirmy no-but-yes actually in fact gave us important information to make a core product decision. We accepted that people didn’t have a clear picture of the value of LinkedIn for themselves. This gave us the courage to make a radical decision: open up the network, rather than make it invite-only. This had the advantage of building the fastest possible path to the set of users who will say, “I believe this network could be valuable . . . for someone else”—and then share it with them.

3. The affirmative no

Sometimes an expert’s “No” is proof you’re on the path to something big and different. The key: You should have an active theory about why you are right and the experts are wrong—more than a gut feeling or simply grit, but another signal for a potentially great idea. 

If you believe the expert’s “No” is rooted in conventional wisdom, but you have data that indicates the conventional wisdom is wrong? That’s called being contrarian and right.

4. The honest no

Frequently, the experts are right. You have to be ruthless about killing your own bad ideas along the way—and an honest “No” could be a lifeline to turn a bad idea into something good, or to help you move on to a better idea.

My friend Mark Pincus tells a good “honest no” story around a previous venture, the social network called Tribe. It had a small but passionate user base, and he felt it had potential to grow. But, as he tells it: “My girlfriend at the time was completely turned off by Tribe. When she was on there, she got lots of unsolicited messages and interest and it freaked her out. She said, ‘This isn’t for me.’”

Mark ignored this feedback, writing it off as a focus-group-of-one. But she was right. He was unwilling to retool Tribe for mainstream appeal, and eventually the network foundered.

5. The unhelpful no

If you’re the kind of person who might get easily discouraged or talked out of your idea, you need to keep your idea away from people whose opinions you have an emotional investment in. Because on your entrepreneurial journey, many people will tell you no out of love; they actually think they’re helping you. Even though they are really, really not.

As Sara Blakely of Spanx puts it: “It’s human nature: we want to immediately turn to our co-worker or friend or boyfriend or boss and say, ‘I have this idea.’ And out of love and concern we hear a lot of things that stop us right in our tracks: ‘Well, sweetie, if it’s such a good idea, why doesn’t it already exist?’ And ‘Even if this idea does take off, the big guys will knock you out of the water in six months.’”

Don’t let your great idea die at the kitchen table. And don’t let it die in the shower as you talk yourself out of it. “An idea is at its most vulnerable in its infancy,” says Sara, and it’s the time when you need to protect it from that unhelpful “No.”

__

This essay is adapted from Chapter 1 of the upcoming book Masters of Scale: Surprising Truths from the World’s Most Successful Entrepreneurs.