The Art Of Ambiguity: Using A Sorta-Kinda Bluff To Close The Deal

A conversation-starting take on one tool startups can use to beat the competition.

A friend of mine, let’s call him Larry, works for a fast-growing startup, not unlike the one where I work. He was recently complaining about a comment the CEO made to a big client of theirs. They were on a business trip to meet the client and discuss the future of their relationship. During the conversation, this CEO apparently suggested to the client that the company had a $5 million marketing budget to help promote its services.

Later upon returning from the trip, Larry told me he realized there really was no $5 million marketing budget or even a formal plan to do any marketing. He said, “I was immediately fearful we had misled the client and became very frustrated. How can we just tell them we have a marketing plan if there really isn’t one?”

“Well, in a situation like that,” I replied, “it isn’t until it is.”

I was met with the sound of crickets and a glassy-eyed stare. He simply didn’t see what his boss had done. To Larry, the CEO was creating doubt and “just making stuff up to look good.” He wasn’t grasping the importance, and his boss’s deft use, of ambiguity.

Ambiguity is that terrifying, awesome place where two different things can mean the same thing, or neither one, all at the same time. Ambiguity is the place where you make something out of nothing; where you work with what you have. Ambiguity is unlimited potential.

And it scares the bejesus out of most people, especially in the workplace.

Certainly, you have heard of the ancient Chinese sage, Lao Tzu. His most famous compilation of teachings can be found in a book called The Tao Te Ching, or The Book of the Way. The Tao, as Lao Tzu saw it, was the nameless void from which all things are born. He writes, “We shape clay into a pot, but it is the emptiness inside that holds whatever we want.” This is ambiguity at its best.

Stay with me.

In a startup, you have to play it loose sometimes. You may have a business model or plan that spells out how and when you’ll spend your money, but in reality, you follow your gut. You have a carefully guarded chest of gold that needs to be used only in the right place at the right time. A successful entrepreneur recognizes those right places and times, and then moves without hesitation.

Larry’s CEO did just this. I am assuming, as a startup, Larry’s company doesn’t have formal budgets and their resources can be reallocated on the fly, based on the opportunity at hand. When in the meeting, their client asked for a budget, they got one. Only later on, when the CEO had a chance to prioritize this client's place in the future growth of the business, would he decide if the $5 million would be spent here or on another project of equal importance. The $5 million dollar marketing budget always exists, it's not a trick. When it's needed, he will spend it.

That’s just how it goes at a fast-moving startup. It is not the bowl you use; it is the space the bowl creates where you find usefulness. Or, in the case of Larry’s CEO, it wasn’t the existence of the budget that mattered, but the freedom to create one that’s important.

If you don’t understand this principle, then you are left with the frustration and scariness of ambiguity. You are bound to operate only with what has been defined for you; your territory, your department, or your budget. Once you do understand this concept, however, ambiguity becomes a powerful advantage. Just because an idea is, as Merriam-Webster defines it, “capable of being understood in two or more possible senses or ways,” doesn’t mean it is untrue. It only means it is malleable, and changeable. It’s the empty space that can hold anything. It’s pure potential. And it’s one of the big reasons why startups can oftentimes overtake their large, established, rule-ridden corporate cousins.

Never be afraid to use the empty space.

What do you think: Is this a great tool that startups should use or an ethically shaky approach? Tell us in the comments.

--Bret Morstad was the first employee and is now COO of Perky Jerky, a Denver, CO-based consumer snack food startup. In 2011, Perky Jerky was No. 93 on the Forbes list of fastest-growing companies.

[Image: Flickr user Niccolò Caranti]

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7 Comments

  • Chris Reich

    The collapse of ethics in American business is one of the forces killing the economy. So, it's cool to lie to make a quick buck? And then the next buck? What happens when the trust is gone?

    This is something we need to take a lot more seriously.

  • Keith

    Sometimes, "ambiguity" is simply a euphemism for "deception" -- as in this case.  If the CEO tells a client that he has a "$5 million marketing budget to help promote [that client's] services," then he is lying -- unless that budget has been allocated precisely for marketing that client.  If the "amibiguity" is not revealed to your counterparty in a negotiation, then you're simply exaggerating or lying...

    The litmus test?...Simple.  How would the client feel if they knew the truth?
    This kind of deception is exactly what drives pyramid/Ponzi schemes.

  • Dubious

    I think it was more of a half truth than a lie. From what I've gathered from the story, the CEO DOES in fact have the funds and is flexible (Being a startup) with the way in which he allocates it thus giving him the power to make decisions in the moment like that. The client isn't solely searching for truth, he is mainly searching for success. Risk is a vital part of the journey to success.. (for both parties)

    Just to iterate -  There were no payments actually made and the CEO's company does exist with a decent amount of resources to support its existence, right? Then a Ponzi scheme in the making is not we're looking at here Keith. 

    (The principle is to always hold true to your word, if one cannot, make it know at a later stage before contracts are signed, sealed and delivered)

  • James Clouser

    Beautifully said.

    In a sale, you should tell the story of your prospect's success in the context of how he views himself.

    If you can't do that, it's best to let him come up with the story himself.

    Not an easy proposition, but a winning one!

    http://www.jamesclouser.com 

  • G. White.

    Congratulations to that CEO as he did exactly the right thing. He did not lie nor betray his client, he just used the free room he has around him. "Larry" should take some time to learn the lesson from this and perhaps that may well be an enhancement to his own life.