The Fastest Way to Make Customers and Investors Stop Trusting You

Inexperienced entrepreneurs constantly make the same foolish mistake when trying to close customers and investors.

Photo by Sebastian Herrmann on Unsplash

A student came to my office hours after being sick and missing a couple weeks of class. Once we’d finished talking through the work that was due, he looked at his calendar and said, “I should be able to have all of it to you by the end of the week.”

I nodded politely, but, in my head, I was skeptical.

And not because he was a particularly lazy student. If anything, the student seemed extremely determined to prove to himself — and probably to me — that he could recover quickly and get back on track. But I’d seen this exact scenario play out so many times, both in my classes and back when I was running companies, that I already knew what was going to happen.

He wasn’t going to be caught up by the end of the week. Instead, while he was busy making up the work he’d already missed, the rest of his classes were going to keep moving. He’d have new assignments and new readings, not to mention the work he had to make up in his other classes. Plus, all of that assumes he was actually feeling 100% healthy again, which is rarely how recovering from an illness works.

In other words, the student wasn’t really estimating how long it would take to get caught up. He was estimating how long it would take to complete the work he could currently see. And that’s a mistake I’ve noticed people make over and over again whenever they’re new to something.

The Difference Between Work and Reality

Years ago, when I was running my startup, I managed software engineers. Over time, I developed an admittedly unfair but extremely helpful rule of thumb. Whenever a junior engineer gave me a timeline, I would immediately multiply it by ten in my head.

For example, if someone told me a project would take a week, I mentally translated that into something closer to two months.

To be clear, I’m not calling the junior engineers I hired lazy or incompetent. Most of them were smart, hardworking, and genuinely trying to give me their best estimates. But the problem was they were estimating the work, while I needed them estimating reality.

The engineer would think about writing the code. I would think about the bug they hadn’t discovered yet, the customer who would change their requirements halfway through the project, their kid getting sick for a couple days, or any of the dozens of other interruptions, distractions, misunderstandings, and unexpected complications that inevitably show up whenever human beings try to accomplish anything.

This wasn’t nearly as big a problem with more senior engineers. In fact, in my experience, more senior engineers aren’t necessarily better at coding. What they’re better at is appreciating uncertainty.

And it’s not just engineers. It’s everyone. The more time you spend watching reality refuse to cooperate with your plans, the more you stop assuming everything will go perfectly. As a result, you start building margin into your estimates, and you begin accounting for the fact that life is filled with things you don’t know yet.

How Founders Lose People’s Trust

In the working world, our propensity to over-promise and under-deliver is annoying, but it’s rarely crippling. The same is true for students.

But this tendency to underestimate based on inexperience is a huge liability for young entrepreneurs. After all, if you already have a job and you underestimate a timeline, you’ll frustrate your boss, but you probably won’t get fired.

Conversely, if you’re an entrepreneur trying to build rapport with customers and investors, giving bad time estimates damages exactly the kind of trust you need to close deals.

Sure, telling people they’ll get what they want quickly makes them happy in the moment, but, when the feature takes a month, the milestone takes a year, or the integration turns out to be much more complicated than anyone expected, it can sink your business.

I realize, of course, most founders aren’t intentionally misleading anyone. They’re usually trying to be helpful. They want the customer to stay excited or the investor to remain interested and feel a sense of momentum. As a result, they give the timeline they hope is true rather than a timeline reality can support.

Unfortunately, every missed estimate carries a cost. The customer starts questioning whether you understand your own product, or the investor starts wondering whether you understand your own business, and before long, the conversation stops being about the thing you promised and starts being about whether people can trust your judgment. That’s when deals get lost.

But estimating timelines doesn’t have to be the thing that kills your company. If handled properly, it can actually be a way to build exactly the kind of trust and enthusiasm you’re hoping for. The key is to understand that people rarely get upset when you give them a longer timeline than they expected. Most people assume you’re the expert, so if you tell them something will take three months, they’ll generally accept three months is probably what it takes even if they don’t like it.

What frustrates people is when you tell them three weeks and deliver in three months.

That’s why I’ve become increasingly comfortable giving longer timelines than I actually expect. And I suggest you start doing the same. For one thing, my longer timelines often turn out to be more accurate than I’d predicted. After all, I’m just as capable of overlooking all the unexpected complications in life as everyone else.

More importantly, when you tell someone something is going to take three weeks and you finish in one week, nobody gets mad. Instead, they get excited because you delivered more than they expected.

That’s called under-promising and over-delivering, and it should be your goal with every project. Because the better you are at setting realistic expectations, the more satisfied people will be with your work. And the better you are at beating those expectations, the more excited people will be to work with you even more in the future.

Want more? Join my free “Learning to Fail” newsletter — based on my famous Duke entrepreneurship course — and get new articles every week!