We discussed the concept of Dumb Money in a previous post, and I wanted to provide more detail on the idea since it’s critical to keep in mind for Fintech and Crypto startups. Dumb Money is a term used to describe a situation where a customer approaches you with a bag of money and asks you to solve their problem with a project; it can be an excellent opportunity to be a hero.
However, if their project means you are straying away from your core business, you take a candy-covered poison pill. The poison is slow-acting, and you’re slowly killing yourself as you become the hero and solve the customer’s problem.
A lot of businesses try to be all things to all people. Sometimes they think they need to offer a little bit of everything to succeed; this is not only impossible but unwise. When you try to be a hero for every customer who walks in the door, you’ll lose focus and become the go-to business for nothing. It can be tough to say no to a customer offering a lot of money for a project that seems out of your area of expertise. However, it’s important to remember that taking on these projects can be dangerous to your business.
Deal with Dumb Money
The best way to deal with Dumb Money is to set some boundaries. Figure out what you will and won’t do – and where the blurry line is between those things. Additionally, let your customer know that you can help them, but you can’t do everything. If they are looking for a specific product or service, point them in the direction of a competitor who might be able to serve their needs better. They are likely asking because they trust you – don’t lose that trust by saying you are fantastic at something that you aren’t – point them in the right direction.
Your business should stick to what it does best and let others do the same. Specialize in what you know and offer the best possible product or service in that category. You’ll be more successful, and your customers will be happier.
Chase the vision, not the money, the money will end up following you.
Dumb Money Decision
There are times when saying No to Dumb Money is the best decision for everyone involved—learning how to say no without feeling guilty or like a jerk is an important life skill. No one likes to let others down, but sometimes it’s necessary for self-preservation. Saying no with grace can be difficult, but staying professional is crucial.
The key is to remember that you’re not favouring anyone by agreeing to something that’s not good for you. It’s unfair to them because you won’t be able to give your best effort if you’re stretched too thin. And they’ll probably end up disappointed in the end.
Dumb Money projects can significantly impact your business. Know what you do best and let someone else do the rest, and you’ll be able to make better decisions for your business.
Also published on Medium.