“You can’t handle the truth.” – Jack Nicholson

I am constantly running into well intentioned and informed clients who ignore this simple advice:

“You can’t handle the truth.” – Jack Nicholson in a Few Good Men

This is especially true when clients are trying to identify target markets.  Here is a perfect example,

I had a client who wanted to market a very complex and localized program to all 50 states.  He was more worried about not serving potential customers than the minimal potential, high risks, high expenses, low efficiency, and probability of mistakes in the 20 states that made up only 10 % of the population.

Similarly, I have numerous clients who refuse to acknowledge the realities of a market place. Baseball teams have even learned to vary prices for various seats, customers, and games.  Many clients, however, believe they can charge whatever they want, even if websites such as Amazon are dramatically less expensive.

Nowhere, does entrepreneurs’ imagination get more out of hand than when they are forecasting.  Despite repeated investor warnings that unrealistic and unsupported forecasts will not be funded, some business people still follow this unsustainable approach.  Entrepreneurs frequently exaggerate their market potential, set unrealistic growth goals even before they have ever sold anything, and lack marketing plans to support what they want to do.

The issue is we love to hang on to our hunches and beliefs, it’s human nature.  We even twist facts and ignore reality to provide continuing support for an argument.  Similarly, we invest lots of time, and even money, in an idea and then refuse to acknowledge it needs to be modified or abandoned. We know this is true in large corporations.  However, flexibility, testing, adapting and changing should be an advantage, and not a liability, in startups and small businesses.

There are lots of ways to “handle the truth”.  These include the assistance of objective third parties, market research, small tests, and just simple analytical thinking.  Requiring a proposal and checking references for suppliers can provide a balance to the euphoria that frequently follows a great sales pitch.  Also, just sitting back and saying what is wrong with this idea or asking if there is a better way makes more sense.

Bert Shlensky is president of www.startupconnection.net and has developed an experienced team and approach to develop and customize critiques to execute successful startups and existing small businesses.