Homepage / Technology / This start-up founder has a novel strategy for getting ahead: Telling the truth
Google and Facebook are watching our every move online. It's time to make them stop Daymond John tells shy airline passenger: You should have talked to me on the plane South Korea says it has no plans to shut down cryptocurrency trading AMD shares surge as Wall Street analysts say the chipmaker is ‘executing on all fronts’ James Altucher, the face of bitcoin, says he’s happy about Facebook’s cryptocurrency ad ban Pending home sales eke out 0.5 percent gain in December as supply shrinks to record low Uber is testing bike sharing in San Francisco The real source of the internet's problems might be the advertising business Game publisher EA's sales forecast tops estimates, sending shares higher GE will likely be dropped from the Dow, Deutsche Bank predicts Samsung surpasses Intel as world's biggest chipmaker for the first time Apple could be the best of the bunch in this tech earnings avalanche The 9-year stock rally still has 'years left,' says one of Wall Street's most bullish strategists Apple: We would never degrade the iPhone experience to get users to buy new phones Bitcoin headed for biggest monthly drop since January 2015 with nearly $60 billion of value wiped off ADP boosts forecast as new tax law spurs demand China 'will open even wider to the UK,' says Prime Minister Li Keqiang Big market swings are something you’re going to have to get used to, says Wells Fargo The dollar keeps weakening. Is that good news for the world? Apple downgraded by BMO, expects iPhone maker to slash revenue forecast this week SoftBank buys majority stake in Japanese messaging giant Line’s mobile division Rising interest rates cause a 2.6% pullback in weekly mortgage applications Trump's State of the Union address 'less hard' than first feared in Asia Trump vows to protect US intellectual property, without naming China Blockchain technology to boost Microsoft earnings, trader says Fujifilm to take over Xerox and combine it into the joint venture Fuji Xerox Samsung is making chips designed to mine cryptocurrencies like bitcoin There’s a risk of market turbulence, but it’s unlikely to hit until 2019, says Santander chairman We'll see up to a 15 percent correction in 2018, Swiss bank CEO says Japan's biggest messaging app Line is planning to launch a cryptocurrency exchange Quicksilver surfwear CEO missing at sea off the coast of France Venezuela says will pre-sell 'petro' cryptocurrency on Feb. 20 Nintendo ups its Switch sales expectations to 15 million units after profits rise 261% European markets seen mixed amid earnings and economic data The UK wants free trade with China. Beijing has its own goals Santander fourth-quarter net profit down 4 percent on US impairments The man who almost became ambassador to South Korea just warned about US plans for North Korea China's Leshi Internet flags $1.8 billion loss for 2017, citing conglomerate cash crunch South Korea says it uncovered about $600 million in cryptocurrency crimes Asia became less democratic in 2017 Al Gore's investment firm backs start-up created by Facebook co-founder Theresa May says she wants a free trade deal with China Chinese manufacturing weaker than expected in January Webpass is leaving Boston in latest sign of Google Fiber’s shrinking ambitions Samsung posts record fourth-quarter profit Asian shares look set for more declines as Wall Street sells off for a second day Don't count insurers out yet after Amazon-Berkshire-JP Morgan move Amazon's health care move could be a big win for consumer health start-ups Red Hat buys CoreOS, a start-up that sold tech developed by Google Here’s what Amazon told employees today about its landmark deal to deliver better health care Top official resigns after false missile alert in Hawaii Crazy odds: These online traders bet on the chaos of Washington and the Trump administration AMD falls despite beating Q4 estimates Facebook ban on bitcoin ads latest in very bad day for cryptocurrencies Indian man dies after being sucked into an MRI machine while carrying an oxygen cylinder Advice for Jeff Bezos, Warren Buffett and Jamie Dimon from a failed effort to control health costs Toys R Us poor holiday sales cast doubts on its future and could force renegotiation of loan terms The Apple sell-off is a buying opportunity into earnings, says trader Google partnership on mobile cloud services drives up MobileIron shares Facebook is banning all ads promoting cryptocurrencies — including bitcoin and ICOs Amazon's moves in health care over the last year are finally starting to make sense Buffett is getting a second chance to partner with Bezos after missing on Amazon as an investment How Pencils of Promise got a $1 million donation from an anonymous bitcoin multi-millionaire Amazon's home devices could be a key to cheaper health care, tech investor Roger McNamee says Two ex-Google engineers built an entirely different kind of self-driving car Cryptocurrencies join the global financial market sell-off as bitcoin drops 7% A travel agent is trying to charge fees for sunbeds Most of the tax cut windfall will boost buybacks and dividends, not workers' pockets, survey predicts The professor who wrote the book on making addictive technology is having second thoughts Trump's immigration policies are 'economic poison' that will cost taxpayers billions Airbnb trolls President Trump ahead of the State of the Union The iPhone X's $1,000 price tag scared everyone away Drop, a rewards app start-up, snags Airbnb's former head of engineering SEC halts one of the largest 'ICOs' ever as it wades deeper into the murky world of cryptocurrency offerings Passing on sanctions, Trump goes even softer on Russia than expected Buy insurers on dip as new initiative from Amazon, Berkshire and JP Morgan is ‘more bark than bite’: Analyst High schools stock up on Narcan to combat teen opioid crisis in US Apple will finally replace the fax machine in health care Apple is reportedly delaying new iOS features until next year because of quality problems Bond expert predicts a ‘wall of buying’ in Treasurys will protect the stock market Home prices surge to new high, up 6.2% in November Noted tech investor says the sector is not the best place to invest right now Sterling predicted to hit pre-Brexit vote level before the end of 2018 Stocks making the biggest moves premarket: AMZN, BRKB, JPM, AAPL, BX, TSLA & more Bitcoin boom to give AMD earnings a boost, says MKM Partners Apple shares fall again on another report of fading iPhone X demand Trump advisor Cohn: President to focus on $1.5 trillion infrastructure plan in State of the Union Why don't foreign investors take fright more often? The dollar is doing something it hasn’t done since 1987 UnitedHealth, CVS plunge on Bezos, Buffett and Dimon plan to improve U.S. health care Amazon, Berkshire and JPMorgan Chase to team in landmark new health care company Can earnings afford to slow down? 'Enemies of the USA': Russia slams America's list of oligarchs with ties to Putin The app that exposed the location of military bases with a heat map is reviewing its features For his next act, former Amex CEO Ken Chenault turns his focus on Silicon Valley Child experts: Just say ‘no’ to Facebook’s kids app Ryanair agrees to recognize British pilots union for first time Arab states are 'determined' to stick with reforms despite deepening 'frustration', IMF says The US 'oligarch list' is strikingly similar to Forbes’ richest Russians ranking Indian ride-hailing firm Ola expands to Australia to take on Uber


This start-up founder has a novel strategy for getting ahead: Telling the truth

First-time entrepreneur Ethan Perlstein has a unique strategy to get ahead: Telling the truth.

“To beat me, any potential rivals would have to out-transparency me,” said Perlstein, in an interview with CNBC. “And that’s anathema to the status quo.”

Perlstein’s approach with his start-up, Perlara, which is working with families to find cures for rare diseases, is radically different from how most start-ups operate.

Investors and boards typically pressure start-ups to stay quiet. A lot of entrepreneurs also believe that secrecy will help them quietly sneak up on incumbents. Plus, it can be a bit embarrassing to talk about non-existent revenues in the early days of a company. It’s a lot easier to win investors by selling a big vision.

Perlstein wants to start a movement to do just the opposite: Share numbers, share data, share everything. That includes saying what he thinks, even if that means pissing a few people off. (Perlstein almost certainly raised a few eyebrows when he referred to tech investors as little more than “biocurious,” while insisting that the best way they could help him is to cut the platitudes and cut him a check).

To test out Perlstein’s commitment to openness, CNBC shared a handful of questions that would get a polite but firm “no comment” from most founders. He shared his responses via email:

  • Perlara booked revenue of $250,000 in 2017 and Perlstein is hoping to secure that amount within the first few months of this year. He believes he’s on track.
  • He pays himself a salary of $200,000.
  • His biggest disappointment about a customer falling through? After a “lot of time” talking to pharma companies Sanofi and BioMarin, he didn’t get a contract.
  • He pitched 75 venture funds last year and about a quarter of them never engaged again after the first meeting.
  • Fund-raising was an “emotional rollercoaster” that became particularly stressful when it became clear his company wasn’t going to get an institutional lead investor and its runway was shrinking. It was “the most challenging experience of my professional life so far.”
  • His goal for 2018 is to be profitable. To do that, he’d need to make 2017’s revenues in the first few months of this year.

Perlara has raised just shy of $10 million in venture capital since its 2014 inception. It is a graduate of one of Silicon Valley’s most competitive accelerator programs, Y Combinator.

It might seem a little nuts for an early-stage start-up to share these metrics publicly. But Perlstein has his reasons:

  • To help other early-stage entrepreneurs who don’t hear enough about their peers’ rejections or failures. He noted the “psychological toll of feeling like an imposter or loser” and how founders will take the inevitable rejections and mistakes very hard, if they don’t believe others are experiencing them also.
  • To battle the “old boys’ club” in Silicon Valley and in biotech, where the same sorts of people get funding each year by benefiting from exclusives networks.
  • He has a personal passion for transparency and sharing.

While his approach might seem admirable, not everyone agrees that it’s the right thing to do.

“Things could change for a start-up from month-to-month,” said Steve Kraus, a health and technology investor with Bessemer Venture Partners. One big customer win or loss could change things, and make last week’s numbers irrelevant. So it might be advisable to never share them in the first place.

Kraus is also skeptical that it will give Perlara a competitive edge.

“And as for getting an edge for transparency, I’m not so sure about that,” he added. In pharma, said Kraus, sharing data might open up a company to more competition from incumbents, who could then deliver a better, faster product.

Others believe there’s a middle ground between Perlara’s total transparency and the prevailing culture of secrecy. Evidation Health’s Christine Lemke, who is also an angel investor, said her start-up makes it a policy to share as much as they can with potential recruits. Evidation works with other health start-ups to help them generate evidence to back-up their claims.

But getting approval to share revenues publicly would be another story.

And she wonders whether companies would regret taking that approach if their company goes through a bad patch.

“I bet that transparency goes away if your revenue takes a nosedive,” she said.

Source: Tech CNBC
This start-up founder has a novel strategy for getting ahead: Telling the truth

Comments are closed.