Learn from every "no"

REID HOFFMAN:
Welcome back to Day 3. You're on the way to creating a daily habit of cultivating the mindset of scale. And that's important, because no one is born with everything they need to succeed as an entrepreneur. Ok – email closed. Let's begin.

You haven't earned your stripes as an entrepreneur until you lose count of the number of times you've heard "no." You know the "No" I'm talking about. The one you get when you pitch your idea to an investor, a potential partner – or to the prevailing powers inside your organization.

But not all no's are created equal. And you can learn from every no – if you know how to listen. To show you what I mean, I want to share a story from Tristan Walker, founder of Walker and Co. They create the Bevel razor and other health and beauty products designed specifically for people of color.

When we drop into Tristan's story, he's about to break out on his own. He had successful stints at Twitter and Foursquare. Then Ben Horowitz, a founding partner at the iconic venture capital firm, Andreessen Horowitz, invited Tristan to just hang around the office and think big.


TRISTAN WALKER:
Ben said, "Come spend six to nine months with us to figure out what you want to do." I spent all nine months there. I like to say I spent the first seven months of my time there wasting their time. I wanted to build a bank. I wanted to fix freight and trucking. I want to fix obesity in the country, in the world.


HOFFMAN:
Then inspiration struck.


WALKER:
I just got frustrated by the shaving experience.


HOFFMAN:
A better shaving experience may not sound like the idea on the scale of freight trucking, obesity or banking. But the most scalable ideas don't have to tackle dramatic problems – they have to tackle neglected problems. And the more that Tristan looked into the history of shaving, the more he realized that there was a hugely overlooked demographic: men with coarse or curly facial hair, who had been living with the curse of razor burns and razor bumps for so long they no longer even recognized it was a problem.


WALKER:
I reached out to an old, retired executive from a CPG company. He said, "Tristan, look at photos of black men 100, 120 years ago. None of them had razor bumps or shaving irritation on their faces." I thought he was being facetious. So I said, "I have time, and an interest in arts. I should look it up." I went to Flickr and I entered all these generic search terms like "Harlem Renaissance," "Black in the 1920s," that sort of thing. I went through 1,200 photos, and I didn't find one with a non-cleanly shaven face. And that had to do with the tools they used.

In 1904, this whole industry was built by a gentleman named King Gillette. He had this amazing idea. He said for hundreds of years, barbers have been using this thing called the straight razor to great efficacy. It cuts the hair level with the skin, not beneath.

But using a straight razor yourself at home is pretty hard to use, if you're not trained. So he had this idea, he said, "What if you can take a single blade, house it within a safe head, attach a handle to it, take it home with you, and shave?" And that started the mass-market shaving industry as we know it.

Fast-forward 20 years later – they lose the patent. Many would argue that the only reason we have two-, three-, four-, five-, six-blade razors today is purely due to patent protection. But actually, it has less efficacy, and if you travel internationally, single blade is more popular than multi.


HOFFMAN:
His solution? He re-engineered the single-blade razor, specifically for coarse or curly hair. He called it the Bevel, and it became the flagship product for Walker & Company, and the first step in his grand plan. He envisioned a health-and-beauty company on par with global brands like Procter & Gamble – a company that devoted its attention to men and women of color. It was blindingly obvious to him that this company should exist.


WALKER:
I mean, a lot of people say that they're trying to build the Procter & Gamble for people of color. Let me talk about this for a second, because it's really funny. Number one, I've never said that. And then two – it's interesting – I think folks talk about it as if it's a niche kind of thing, but people of color are the majority of the world. So if we're the Procter & Gamble for people of color, what the hell is Procter & Gamble?


HOFFMAN:
But when you're pitching a room full of mostly white, mostly male investors, it can be hard to convey the urgency of this market oversight. So how did the best and brightest VCs respond to Tristan's idea?


WALKER:
"I don't know."

"It's niche."

"I don't think it's scalable."

It's a terrible idea for me to jump into the Bevel thing, because there was a consumer group who didn't want it, an industry that is dominated by the multi-blade use case with billions and billions and billions of dollars to attack you with patent protection, et cetera. And to do it in like Silicon Valley – that's crazy.


HOFFMAN:
As is often the case, there was one lone champion.


WALKER:
I go to Ben, and he's like, "That's the idea." And at that point I knew I had something, quite frankly.


HOFFMAN:
This may sound like a strangely optimistic reaction. Why should a single endorsement from an investor outweigh a crowd of investors telling you, "Thanks, but no thanks?" Shouldn't you weigh all of the feedback equally? Short answer: No. And here's why.

The first truth of entrepreneurship and investing is that the very big ideas are contrarian, because the contrarian is part of the reason why a bunch of large companies and competitors haven't already done it, why a bunch of other entrepreneurs haven't already succeeded at it. And so that leaves the space for the creation of something – and to create something big, you have to have that initial space. For example, in the early stages of Google, it was, "Search was a terrible way of making money in advertising, because advertising is time-on-site. And what does search do? It shuffles you off the site as fast as you can go. That's not a good business model." So at Airbnb, it's like, "Someone's going to rent a couch or a room from someone else? Who are the freaks on both sides of that transaction?" So all of these things have a similar quality – very smart people will tell you, there's no there, there.

So you have to gird yourself for a string of rejections. Some entrepreneurs simply develop a thick skin. Others treat it like a normal part of their workday. You know, wake up, brush your teeth, listen to people crush your dreams. It's a living.

The most successful entrepreneurs listen closely to the "no"s. They mine their rejections for clues. Tristan has a keen ear for this quality in his conversations. He can pinpoint, down to the PowerPoint slide number, the moment his audience stops paying attention.


WALKER:
I had a slide in there – I think it was like slide 14 – where I talked about Proactiv, the acne system, as a good analogy to what we're trying to do. It's the difference between Gillette and Bevel, as Neutrogena and ProActiv – it's a system that solves a very important issue. And this VC looked at me – and I'll never forget this – he said, "Tristan, I'm not sure issues related to razor bumps, shaving, or irritation are as profound and big an issue for people as acne."

At which point, I said, "I kind of understand what you're saying, but all you had to do was get on the phone with 10 Black men, and eight of them would have said, 'This is a permanent thing I have to deal with.' All you had to do is get on the phone with 10 white men, four of them would have said the same thing. Could have done it for women too, and you would have gotten the same ratios."

So it wasn't that it was a bad idea, or not as important – it's just that that person was unwilling to acquire the context necessary to understand what we're working on. That's just laziness – and at that point, I can't fix that. So I just gotta move on until I find somebody who understood it.


HOFFMAN:
Notice how quickly Tristan's mind moves on to the next investor. When the quality of the questions drops, he knows, mid-pitch, that the conversation is over – the rest is noise.


HOFFMAN:
And Tristan did move on. He found investors, launched the Bevel Razor, and was acquired by Proctor and Gamble in 2018. You could say that Tristan did this despite the "no"s – but I think the "no"s actually helped. In fact, I think each "no" is a gift. Because the most successful entrepreneurs listen closely to each "no" – and mine their rejections for clues.

Think about the last time you heard "no" when you pitched an idea. Let's consider what you might take from it.

First, there are the "nos" from potential investors – or for intrapreneurs, your internal champions. If they say "no" because an idea is too risky, that can point you to your greatest danger – the thing that's most likely to trip you up. Pay attention to these "no"s and you'll draw a map around every trap you could fall into.

If they say "no" because an idea is too small, then ask yourself: What do I know about the market that they don't? Why am I so sure I'm right? How can I improve my chances?

And then there are times when you hear "no" from almost everyone. That can sometimes be the best "no" of all. It means you have an idea so contrarian, no one else will see it. This gives you have a massive headstart.

So today's mindset: Don't take "no" for an answer. Take it as a question. Ask yourself: What can you learn from that "no"?

Here's an exercise to deepen what you're learning from each "No." It's great for when you're in the thick of pitching a new idea. Take a piece of paper. Yes, paper again. Because doing things physically, and not just digitally, can support building a new habit. Hold the paper vertically and fold it in THIRDS, so you have 3 columns. At the top of the first column, write "What they said." On the second column, write "What I know" and on the third, write "What I'll do."

This is your "List of No." And I want you to think about every "No" you've heard recently. Write them down one-by-one. In the first column write why the person told you "No." For example, they might have said no because your idea is too small, too niche. Now think about what you know, that they don't. Why do you still think you're right? Maybe you know the market is larger and more lucrative than they think. Maybe you know that you plan to test and perfect your idea before going wide. So write that in column 2 under "What I know." But the exercise doesn't end there. It's not just about dis-proving the "No." It's about learning from it.

So in column 3 – write what you'll DO about it. Maybe you need to add a slide in your pitch deck that clearly addresses the concern. Or maybe you need to revise or re-think your plan in order to avoid a trap.

Keep adding to this list over time, and column 3 will become your Action Plan.

In tomorrow's Daily Practice, I'll walk you through one of the most counterintuitive truths in business: In order to scale, you have to do things that don't scale at all.

In the meantime, watch for our email with a summary of today's Daily Practice and the action you can take. The recap is here in the app too. And these written summaries are a critical part of the course. They help you remember all the details – and share the learnings with your team – after you take your headset off.

See you tomorrow, for Day 4.