Greeting Pioneers,

Rachel doesn’t really do intros - ‘cept last week’s sick Drake meme.

Our intro section is officially on strike till Jack gets back.

A Case For Ending The BS

Someone big-lied about their revenue at an event last week. I knew it. They knew I knew it. I knew they knew I knew it. & yet, they doubled down.

Is this how we’re showing up these days? Full on fraud? A new generation of aspiring Elizabeth Holmes’s?

That’s not the startup culture I want to enable. But I see it happen so often in our own community – the guilty parties winning awards and lying on stages in front of Louisville’s best and brightest. Pillars for new would-be founders to look up to.

We can do better than this.

Why People Lie

"We have 10,000 monthly active user users" (7,000 are bots, 2,500 never came back).

"We're doing $20K MRR" ($0 in collected funds but alleged exposure to potential users/payers who aren't in fact using/paying for it).

“We just did a $500K ARR deal” (it’s a fee-based service business doing $500 in ARR but there’s a hypothetical future where it could maybe grow to the $500K if all of their unvalidated hypothesis and dreams come true).

The list goes on.

Most founders aren't trying to commit fraud. They're just trying to get credit for future them instead of present them. They want to be respected and they see respect going to those who are further along, so they make it seem like they’re winning revenue before they've actually won.

The impulse makes sense. Problem is many of us see right through you. & given enough time, so will everyone else.

Most People Aren’t That Good At Maintaining A Lie

We can usually tell, quickly, and if not, it becomes apparent over time as we watch your company not-grow.

Ie, it doesn’t make sense for you to have hundreds of thousands of dollars in new revenue coming in every couple months while you’re complaining that the easiest-VC-to-get-money-from-in-Kentucky won’t invest $25K in your company.

It also doesn’t make sense that you need $25K with all that cash you’re raking in.

It doesn’t make sense that you can’t articulate any details that stand up to scrutiny.

In other words, you're not actually getting away with it. You're just burning credibility.

The truth will catch up. It always does.

The Cost

When you lie about your numbers in Louisville, here's what you get:

People stop trusting you. The startup scene here is tiny. Everybody knows everybody. When your "thousands of users" turns out to be 12 beta testers, word spreads. Fast.

People stop helping you. The founders and community leaders who could introduce you to customers, investors, or talent? They remember. They're not going to put their reputation on the line for someone who bullshits about traction.

You lose the room. Once people know you're inflating, everything you say gets discounted. Your actual wins don't land because nobody believes them anymore.

The Gains

Elizabeth Holmes got what she wanted: everyone knows her name. She's famous. She just had to go to prison for it.

Given that, I’d argue you gain nothing but a temporary ego boost and a bad reputation.

The rush you get from people thinking you're winning? You can get that same feeling from actually winning.

Real traction feels better than fake traction, and you don't have to remember which version of the story you told to which person.

Smoke-screen less. Sell more. Don't go to prison.

Tell Us What You Want

We’d love your input on this newsletter. Which of our pieces have resonated most with you over the year we’ve been doing this. What would you like to see more of? What do you want less of? Let us know here in this feedback form.

Thanks to Stef for putting it together 🙂 

Note’s on The Distill’s co-EICs: Jack Crowdis & Rachel Edenfield

Jack runs the newsletter, helps run KYX. He’s a career startup kid, past founder, and current operator. Weekly contributor. Always editor.

Rachel’s the Founder/CEO of venture-backed Swell, and a driver of KYX. Routinely delivers the city’s sharpest long-form startup advice. Always re-edits Jack’s edits (including this bio).

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Peace, Pioneers ✌️