Monday, August 3, 2020

Rejection-Handling Is An Indispensable Skill For Entrepreneurs

handling rejection as an entrepreneur

Quest Ventures Partner Jeffery Seah talks to Jumpstart about learning from rejections as an entrepreneur

 

By Monika Ghosh

 

As children, we felt crushed when our illogical demands were turned down by our parents. As adults, we learned to accept rejection, whether from prospective employers, partners, schools, but each rejection was uniquely difficult to deal with.

 

Entrepreneurs face rejection more than the average person and from both their personal and professional lives. Their ideas are rejected by friends, family members, or investors; their products are rejected by prospective customers; or their company is rejected by prospective employees.

 

While the burden of an entrepreneur is never very low, rejections can sometimes add to the existing stress and make it difficult to remain optimistic and motivated. In fact, inability to handle or cope with rejections can also lead to burnout or depression.

 

In an interview last year, Shiprocket CEO Saahil Goel talked about the struggles he faced as an entrepreneur in the early stages of his startup, and mentions how an employee, who initially couldn’t locate the office, later rejected the company despite being given an offer. All these kinds of rejections lie heavy on the hearts of entrepreneurs and build up their anxiety.

 

Perhaps the most disheartening kind of rejection that often shakes up an entrepreneur’s confidence comes from investors. Jeffery Seah, Partner at Quest Ventures, talks to Jumpstart about the various reasons entrepreneurs face rejection, and how they can cope with and learn from these experiences.

 

According to Seah, one of the primary reasons an entrepreneur might face rejection from investors is because their idea is disruptive: it is not derivative or an incremental improvement of an old product or technology, but rather a groundbreaking innovation.

 

In fact, according to Seah, if an entrepreneur’s idea does not get rejected often, it indicates that the idea is derivative.

 

“The fact that there is no cognitive dissonance in the recipient means [the idea] is just so basic,” says Seah.

 

Therefore, entrepreneurs with disruptive ideas should anticipate the rejections they will face: resistance against adoption of their innovation will be a testament to the idea’s originality and disruptiveness.

 

In order to succeed, therefore, entrepreneurs need the ability to gauge the level of comprehension or conservatism of the investors or the people they are pitching to, Seah adds.

 

According to him, most investors can comprehend the technology or the idea behind a startup, but may think it’s too radical to invest in. An entrepreneur’s success, therefore, depends on their ability to read the room and be convincing enough for investors to take the plunge.

 

While most VCs look for a minimum viable product, Seah specifically looks for mainstream products that can be mass-marketed. He believes that products with selective demand, or products that are ahead of their time can sometimes face rejection, since VCs look for growth potential, and sky-high valuations cannot be achieved by products made for small markets.

 

Yet, Seah’s words aren’t intended as a guide to avoiding rejection. Rather, he’s careful to emphasize that entrepreneurs have the chance to learn something about their product and idea from each rejection experience.

 

“The rejection process is a natural due diligence for yourself, your staff and your customers,” says Seah. Each rejection or each piece of criticism provides a new avenue to refine and improve upon the startup’s initial concept.

 

Handling rejection in the moment

 

As a result of the rejections he’s faced, Seah says he has learned to read people better, and often used the same deck with slightly different patter to get better results with investors. With experience, he came to understand that identifying the key decision-makers and pitching to them makes all the difference between success and rejection.

 

Not knowing whom to approach, or choosing the wrong person – perhaps too far down the chain of command – can set a startup up for rejection. They may accept and understand the idea, but not have the authority to signal a go-ahead. Though they may then go on to speak to a manager and advocate for the startup, it’s less likely to work out than if the startup went directly to the person in charge.

 

For Seah, learning to overcome his natural defensiveness was another important lesson from rejections. According to him, human beings are naturally defensive and find it difficult to accept criticism. His experience in dealing with rejections taught him to control his body language, facial expressions, and otherwise visible signs of discomfort when facing rejection.

 

It is easy to be discouraged by rejections especially when people are condescending, but it is important to not waver in your confidence, he advises. It is okay to stand your ground and politely agree to disagree, rather than agreeing with the person who is criticizing you just because of their authority or expertise.

 

However, it is also important to leave the opportunity open, perhaps by re-engaging with the investor once their criticism has been addressed in the product or service. Moreover, Seah stresses that it is important to be humble when faced with criticism and rejection.

 

“Don’t ever go back and tell someone ‘I told you so,’ because you need to accept every customer or client, whether they like the innovation or not,” says Seah.

 

When entrepreneurs are passionate about solving a problem, they need to have unshakeable faith in their idea to survive in the face of adversity and rejections.

 

After all the talk of rejection and criticism, there is a silver lining according to Seah: every rejection can weigh you down, but passion can drive you to success.

 

Header image by Nik Shuliahin on Unsplash

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