“Should we keep selling to the mid-market, or go after the whales?” a founder recently asked me. Instead of giving her an answer, I asked her a question…

“What’s the difference in sales cycles between the two?” I asked.

“That’s just it!” she responded. “The sales cycles are basically the same. But the big customers are 5 or 10 times larger ACV’s.”

“It sounds like you’ve got a solid argument for going after the big guys,” I said.

“That’s what I was leaning towards,” she responded.

“I think you should go with your gut,” I told her. “You’re in this every day. I’m parachuting in for a half hour. You know better than I do.”

Why Asking Questions Is Better Than Giving Answers

After our chat, she started going after the larger customers. And sure enough, revenue growth went way up, hitting 3x year over year!

The traditional startup advice is to go after smaller customers first. They usually have shorter sales cycles and are more likely to do business with startups.

As soon as she asked me this question, I was sorely tempted to parrot that cookie cutter advice.

But I didn’t. Instead, I asked her a question.

The Answer Is Within You, Grasshopper

Turns out, the cookie cutter advice did not apply to this company.

And no wonder! Every company’s different.

This is why I rarely give founders a straight answer. Since I don’t actually work at the company, I only have so much context.

Usually, the founder already knows what to do. They just need a sounding board and some validation.

How VC Advice Can Hurt Companies

Asking questions does a better job at revealing the truth than just making a statement.

We investors love to think we have all the answers. You’ll never see anyone make more pronouncements with less knowledge than a VC.

But we don’t have all the answers. Every startup is different.

The problem is, founders tend to give our opinions undue weight. We have the playbook to success, right?

In truth, each founder is the best expert on her company. If anyone has the answer, it’s her.

The investor can help by listening and teasing the right answer out of her. But when he short circuits that process and gives an opinion based in minimal knowledge, he’s hurting, not helping.

Wrap-Up

If you’re an investor, try asking questions of your founders. If you’ve picked your founders well, the answers are already within them!

If you’re a founder, encourage investors to ask you questions. These questions help you refine your thinking.

The right answer is out there. Together, you can find it.

More on tech:

Do Non-Founders Make Better Investors?

Hot Categories I’ve Never Invested In

Small Investors Lead to Big Investors

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