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Fake It Until You Make It - Where Is The Integrity Line?

Vigilante

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We probably need a thread on the difference between "fake it until you make it" and pure deception. Where's the line? Is there a line? Is there a such thing as a good "fake it until you make it?"
 
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Vigilante

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I have several thoughts on this as I reflect back over the years and the successes and failures and leaders and charlatans I encountered over what is hopefully the sunsetting career for me. I will post a few stories here but am also very interested in the consensus of the forum. It is often said there is "honor amongst thieves" and I would spin that in a positive way. I think we will discover that we all share a pretty consistent line in the sand as to what is acceptable, and where integrity intersects with positioning. We often say that the forum self-filters or self-regulates. I've seen wanna-be gurus come and go, and there have also been some epic exposures over my past several years on the forum. Thieves have come in here bragging about their thievery, and on more than one occasion the forum members turned the tables on them. We may link some of those threads back here as history has not been kind to scalawags that have made their way to the Fast Lane Forum.

Lets have a discussion about integrity, brand marketing, and where the line exists (if at all). Where does "fake it until you make it" cross the line from best intentions to outright deception?
 

Vigilante

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"The only thing bigger than who we are... is who we say we are." - Spoken in a private meeting by one of my largest clients in the late 1990's.
 

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Vigilante

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I started a company called U.S. Install. It was an idea, wherein we would use subcontractors across the United States to perform consumer electronics installations. My company itself would not own any trucks, any ladders or screwdrivers... we would simply provide overhead absorption to other companies, giving them additional demand for their existing workers. The demand would come from retail partners I could offer the service to who did not need to have their own W2 installation expense... they could simply refer the jobs to us, we would subcontract the jobs out, and then rebate the retailers for a percentage of the installation expenses. For simple math, we would

Install a television.
The consumer might pay $99.
The installer would keep $80.
We'd keep $10.
We'd give $10 to the retailer.

So far, so good. However, the retailers we were interested in were national retailers. We began to assemble a database of installers. Contracts, credentials, insurance... we had just a few people in a few cubicles in Minnesota running the "company." In theory, a job would come in, we would subcontract it, and everyone makes money.

So we started. With Walmart. (you can probably see where this is going before I even get there). We beat out several competitors for a live test with Walmart, under the pretense we would be able to scale this if successful. So far, so good.

We started with Walmart in Kansas City, MO. Single market, a few Sam's Club locations. No big deal. We found an awesome contractor. Everything went smoothly. So smoothly, that 30 days in, we added a second market. Then a third. Then a fourth. Then we added Circuit City's Fire Dog installations in select markets.

We never lied about how we were doing what we were doing (subcontracted labor) but we stretched the truth about what our capabilities were. We figured, as most do, that we would cross that bridge when we came to it.

Then we came to it.

Walmart's appetite increased much faster than I could glue things together. The world's largest retailer was my first customer. Balls of steel, but without really any infrastructure or capability to perform. Overpromised. Undercapable. Some times, it's not that easy to cover a "white lie" which is a cute label we use when we don't want to really get introspective on a real lie. I was definitely over my head. People trusted I was who I said I was. And I was... sort of. But the sort of not was about to let down the world's largest retailer and the people ... the faces... the real people that entrusted me as they stuck their necks out for me with their job credibility resting on the contractor they committed to. I had to find a solution - for them, not for me. Saving face was over. Now it was time to figure out how to finish what I started as much to save all of the people that were involved. Real people, real lives, real jobs. It wasn't a game.

I didn't have several months to get capitalized, or really even several weeks to methodically backfill Walmart markets all across the United States.

In a fire sale, I sold the company right when things were about to get real. I had oversold my capabilities. It cost me the company.

Fast forward to today. It's a decade plus some later, and the company that acquired my operation from the scrap heap still handles some consumer electronics installations at Walmart today. The idea was right, the intention was right, but the execution was horrible and the integrity was questionable.

There probably would have been a better path. This became one of the scars that I wear even today.
 

Invictus

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Perhaps the line can be drawn at two things. Where It Is Focused and What Would Happen If It Were Discovered.

Fake it till you make it advice tends to be given to those who have trouble believing in themselves. It’s directed more inwards then it is outwards.

And I think that’s one place we can draw the line.


Perhaps you get quite nervous when speaking with others. Well, then by all means, fake confidence. You are deceiving yourself that you are confident, that you can speak clearly and passionately.

And then, as you do so, you may find that you are beginning to gain that confidence. By faking it, you stopped yourself from hiding away and never doing it. You ‘faked it’, gained confidence, and then ‘made it’.

But faking it till you make it, when outwards focused, is not about deceiving yourself for your own benefit. It’s deceiving others for your benefit own benefit.

Okay: Knowing you can sing quite well, and telling yourself that you are ready to be on stage. Eventually, you will find that you are indeed ready. You are deceiving yourself to make yourself better.

Not Okay: Telling others you are a good singer, when you have never taken singing lessons or even so much as sang at church. You are deceiving them to make yourself seem better.

Another way to look at this could be, what happens if you were ‘found out’.

If you faked confidence at speaking engagements, well, what’s the big deal? People might even be MORE impressed.

Or if you hid that you were a one-man show with a few contractors? If you provided results, would your clients and customers be upset? If they would be, then faking it is probably not the right option. If they wouldn't care, so long as they got results, then perhaps it is okay to label yourself as whatever you need.

What about if you were a coach? And you said you could teach confidence and help people talk to the opposite sex. But you yourself clammed up and couldn’t utter two words to a guy/gal. And you were simply trying to fake that confidence until you earned it. Would your clients care about that?

They would.


But what if you were a coach that taught how to look at situations positively. And you suffered from depression? However, what you taught did work, because it often helped you. You were not 100% positive 100% of the time, but you were better than before. Would your clients learning that leave you? Or would it perhaps humanize you?

Are you deceiving others for your own gain? Or are you deceiving yourself to make yourself better?

What would others say if they found out?

My apologies for rambling. Like many things, this is a gray area. And I think it is a ‘know when I see it’ situation, which makes it almost impossible to directly pin down.
 

GMSI7D

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Lets have a discussion about integrity, brand marketing, and where the line exists (if at all). Where does "fake it until you make it" cross the line from best intentions to outright deception?


integrity is being loyal to our values

i value intelligence over stupidity



let's say we are sent to prehistoric times . we encounter stupid cave men

what is right here ? being loyal to our intelligence and ignoring the cave men ?
which is integrity

or putting us down to the level of the cave men in order to adapt to the prehstoric society ?


same thing in our society

there are stupid people and smart people

do stupid people deserve to have a better life than smart people ?


this is the core of your thread.

my answer is no

intelligence must win every time over stupidity and do what ever it takes

and i will be loyal to that decision

this is integrity by definition


.
 
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JAJT

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IMHO there's two definitions of the phrase:

1. When you influence yourself to do positive things, even when you feel negative about them, and the only "life" on the line is yourself. This applies to confidence, appearance, behavior, self-talk, etc... Nobody else is "suckered" into your ruse. It's purely inward-facing even if there's an outward component to it (how people interact with you based on your confidence, for example).

2. When you deceive others in ways that affect them. This is when you pretend to have skills you don't, experiences you don't, talk about subjects you have no clue about, take on jobs you aren't qualified for, etc... it has potentially negative consequences for others. You are taking advantage of people's trust here.

The first is incredibly positive, and the hallmark of all self help.

The second is incredibly selfish, and not respectful to all the people you need to plow through to get to the "making it" part.

If you proclaim confidently that you'd love to try Mexican food when really you're very apprehensive about it - that's fine. If you proclaim confidently that you have skills that other people are trusting to be correct - that's not okay.

I'm sure I could phrase this better but that's the high level look at how I see that phrase - in terms of how much other people rely on your "faking" to be correct.

Worth noting that there are a million shades of grey in there and a million stories to be taken on case by case basis. Everyone needs to start "somewhere" at everything and really the question is how far you are willing to push the "faking it" part and what the fallout is on the folks you "fake it" with could be.
 
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NateKruse

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I have an extreme opinion on this topic. Personally, if I don’t have integrity, I have nothing.

Around the fourth grade I made going to the Air Force Academy my sole focus in life. As I learned more I made it my obligation to live by their cadet honor code, “We will not lie, steal, or cheat, nor tolerate among us anyone who does” This was followed by the Air Force core values of “Integrity first, service before self, and excellence in all we do.”

I understand I sound like a tool, but these values have served me well.

In regards to the “Fake it ‘til you make it” discussion. I think the value in that truly lies within your own mind. That attitude has some power to make you take action on the things that the little voice in your head tells you that you can’t.

When applied externally, I think fake it until you make it can have disasterous results. In my 9-5 (really 0630-1500) it could mean an incompetent senior engineer signing off on an instruction that leads to a catostrophic failure of a helicopter and the death of tens of marines or sailors. All because some faker’s unfounded confidence moved them up through the ranks until they had a position with technical authority. Fortunately the system is good at preventing those situations.

More realistically, fake it until you make it may be something as trivial as filling out your About Us page with fictitious employees from Mr. Miller’s gym class. I didn’t really care for that portion in the Millionaire Fastlane , but MJ said it started as an inside joke and he questions the ethics of it.

I’m very hard on myself, but I have learned that everyone has different standards. I don’t think any less of MJ because of that example, I just wouldn’t personally want to use an approach like that. I prefer the “radical transparency” that Ray Dalio discusses in “Principles: Life and Work”

My opinion is that my life, and thus my business, should be founded on integrity. I don’t even like white lies, but I’ll admit I’m not perfect. If I pass someone in the aisle at the cubicle farm and they ask me “How’s it going?”, I’ll usually reply, “Good! How are you?”

I’m interested to see where this conversation goes.
 

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Fake-it-til-you-become-it.jpg
 
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ZF Lee

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Lets have a discussion about integrity, brand marketing, and where the line exists (if at all). Where does "fake it until you make it" cross the line from best intentions to outright deception?
I take 'fake it' as doing the things that matter, even if they don't give out results in the short term. AKA Desert of Desertion.

Fake it (fire action) until you make it (market echo)

The question should be 'How long must I fake it before I need to change my methods?'

The term 'fake it till you make it' has the misconception that the economical effort is one-directional or dimensional. It assumes that 'if I don't follow this only way, I'm doomed.' There are always other ways to turn to for better results.

When applied externally, I think fake it until you make it can have disasterous results. In my 9-5 (really 0630-1500) it could mean an incompetent senior engineer signing off on an instruction that leads to a catostrophic failure of a helicopter and the death of tens of marines or sailors. All because some faker’s unfounded confidence moved them up through the ranks until they had a position with technical authority. Fortunately the system is good at preventing those situations.
This may be relevant to 'fail more to get success'.

While failing is a hard necessity, we will always find ways to avoid it. I found this blog write-up recently:
Why Silicon Valley's 'Fail Fast' Mantra Is Just Hype

It has a similar analogy to your engineer story, @JAJT.

My opinion is that my life, and thus my business, should be founded on integrity. I don’t even like white lies, but I’ll admit I’m not perfect. If I pass someone in the aisle at the cubicle farm and they ask me “How’s it going?”, I’ll usually reply, “Good! How are you?”
It's not a white lie.

You just choose not to tell the whole story. And you have your right to confidentiality in this case.

For 'About Us' stories, I haven't seen much focus on mentioning team members these days. Or perhaps I am not shopping or researching hard enough!:playful:
 

Kak

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I have an extreme opinion on this topic. Personally, if I don’t have integrity, I have nothing.

Around the fourth grade I made going to the Air Force Academy my sole focus in life. As I learned more I made it my obligation to live by their cadet honor code, “We will not lie, steal, or cheat, nor tolerate among us anyone who does” This was followed by the Air Force core values of “Integrity first, service before self, and excellence in all we do.”

I understand I sound like a tool, but these values have served me well.

In regards to the “Fake it ‘til you make it” discussion. I think the value in that truly lies within your own mind. That attitude has some power to make you take action on the things that the little voice in your head tells you that you can’t.

When applied externally, I think fake it until you make it can have disasterous results. In my 9-5 (really 0630-1500) it could mean an incompetent senior engineer signing off on an instruction that leads to a catostrophic failure of a helicopter and the death of tens of marines or sailors. All because some faker’s unfounded confidence moved them up through the ranks until they had a position with technical authority. Fortunately the system is good at preventing those situations.

More realistically, fake it until you make it may be something as trivial as filling out your About Us page with fictitious employees from Mr. Miller’s gym class. I didn’t really care for that portion in the Millionaire Fastlane , but MJ said it started as an inside joke and he questions the ethics of it.

I’m very hard on myself, but I have learned that everyone has different standards. I don’t think any less of MJ because of that example, I just wouldn’t personally want to use an approach like that. I prefer the “radical transparency” that Ray Dalio discusses in “Principles: Life and Work”

My opinion is that my life, and thus my business, should be founded on integrity. I don’t even like white lies, but I’ll admit I’m not perfect. If I pass someone in the aisle at the cubicle farm and they ask me “How’s it going?”, I’ll usually reply, “Good! How are you?”

I’m interested to see where this conversation goes.

Great Post REP+ I agree with this!

I personally believe in complete and radical honesty. Just be who you are, and if you don't have time to explain the complications therein, don't start the conversation.

I think the waters get muddy when some start equating this radical honesty with this "zero F*cks given" stuff like they can wear hoodies, socks and sandals to meetings and cuss in front of customers. Not OK.

I wear suits to meetings, does that mean I am being dishonest because I wouldn't otherwise be wearing a suit in that moment? No of course not. I try to put my best foot forward in everything I do. You want to build legitimate, not fake, confidence in the people you are conducting business with.

If you look back to my old story about the letter of credit fraud case... My neck was on the line in that moment. I knew my Chinese supplier was going to attempt to run off with half of my customer's money. I could have shielded him from that and tried to patch the hole, but that is basically how every ponzi scheme in history starts. Instead I called him at 8AM in the morning and explained the situation. We still work together today and we both know we could trust each other with anything. I got him his money back, by the way.

Raising money: I have legitimately told people NOT to invest their money in my company before, I tell them every single problem I see with it... This has never netted me a negative result in my life. When they analyze every detail I lay out they ultimately want to invest anyway. It builds trust, it builds confidence and when these companies are doing 10x, 100x or even 1000x what they do today, the relationships will have a solid foundation of trust and I will have the support and respect of the people around me.

I don't build things on thin ice.
 
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Ninjakid

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I see it like this. Are you:

  1. Adopting new traits which you like and want to hold on to?
  2. Trying to dress up your real self be pretending you're someone you aren't?
 
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Chromozone

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I think the heuristic would be something along the lines of: If you can be harmed or lose something by your actions, then it's ok to "fake it".

It becomes questionable to "fake it" when you can only benefit and have nothing to lose by your actions.

@Vigilante - you had your neck on the line in your story. I wouldn't say you were faking it for that very reason.
 

Dami-B

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This reminds me of Phil Knights - "Blue ribbon and onitsuka story".

Honestly, I do business in an environment and industry where corruption is the order of the day and to find one honest person is ten times harder than finding raw gold.

Traits like sharpness, smartness and cunningness are often appreciated over integrity, that's why I appreciate this forum.

In my reality, I would say that opportunity sometimes comes and meets me unprepared and not ready, but I never turn it down, if I can't perform it then I find someone who can and partner with them. Because such opportunities are rare, I try to be honest but I know my environment and I'm careful with how I disclose information, business is more war like where I come from and being an open "goody too shoe" book will always hurt.

So I've learnt to have integrity but also be smart about how I conduct myself, this hasn't always worked for me, but it's a learning process.
 

Andy Black

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Meh. I don’t like the phrase.

I don’t like the word “fake”.

I don’t like the event of “making it”.

I’m a work in progress. My business is a work in progress.

“I can’t guarantee you results, but I can guarantee we’ll follow a process, and that process is this...”

Yes, I’ll take a deep breath to calm nerves before giving a speech. That’s not faking anything, that’s getting control so I can perform how I want to.

No, I won’t pretend I know something when I don’t. I even welcome the opportunity to do what others won’t, and explain that I don’t know something, or change my mind because someone convinced me their viewpoint was better, or apologise and make amends.


I’ve “aced” plenty of interviews by saying “I’ve not done that. I’d attack it like this though. Wow, do I get a chance to do that in this job? I’d love that!”


There’s so many legit ways to turn your perceived weaknesses into strengths that I think “faking” your way out just shows lack of imagination as well as a lack of integrity.



My goal is to be the man I want my sons to grow up to be.

If it doesn’t pass that litmus test then it ain’t happening.



TL;DR?

Feck “Fake it til you make it.”

I’d rather “Show, don’t tell.”

... and “Walk softly, carry a big stick.”
 
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ZCP

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Pretending to be bigger than you are is to me where the phrase comes from. It is also how every single company operates in the beginning.

There normally comes a point, like in @Vigilante 's story where your company has a choice to make..... raise your hand and admit you can't handle it (and potentially lose that customer) or roll the dice (and potentially lose it all).

In our company, we have several spots where we 'got too big, too fast' and ended up losing several clients and several good staff because of it. Now we are very clear with clients when we cannot do something. When we start with a potentially large client, we are very clear on the front end that we do NOT want all their business. Not at first. We want to ramp up so we don't let them down. Most are amicable with that.

Knowing I that had a point in our past where I should have stepped in and said 'no, we are not ready to handle that for you yet' .... @Vigilante if you went back in time, would you have stepped in and stopped the snowball and potentially lost Walmart to save the company or would you still have rolled the dice?
 

Vigilante

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Pretending to be bigger than you are is to me where the phrase comes from. It is also how every single company operates in the beginning.

There normally comes a point, like in @Vigilante 's story where your company has a choice to make..... raise your hand and admit you can't handle it (and potentially lose that customer) or roll the dice (and potentially lose it all).

In our company, we have several spots where we 'got too big, too fast' and ended up losing several clients and several good staff because of it. Now we are very clear with clients when we cannot do something. When we start with a potentially large client, we are very clear on the front end that we do NOT want all their business. Not at first. We want to ramp up so we don't let them down. Most are amicable with that.

Knowing I that had a point in our past where I should have stepped in and said 'no, we are not ready to handle that for you yet' .... @Vigilante if you went back in time, would you have stepped in and stopped the snowball and potentially lost Walmart to save the company or would you still have rolled the dice?

I would have rolled the dice. I am a gambler. I would rather risk it all and lose it all then live with "what if"
 

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integrity is being loyal to our values

i value intelligence over stupidity



let's say we are sent to prehistoric times . we encounter stupid cave men

what is right here ? being loyal to our intelligence and ignoring the cave men ?
which is integrity

or putting us down to the level of the cave men in order to adapt to the prehstoric society ?


same thing in our society

there are stupid people and smart people

do stupid people deserve to have a better life than smart people ?


this is the core of your thread.

my answer is no

intelligence must win every time over stupidity and do what ever it takes

and i will be loyal to that decision

this is integrity by definition


.

If you value intelligence so much, why does your grammar and punctuation suck so badly?
 
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MJ DeMarco

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I started a company called U.S. Install. It was an idea, wherein we would use subcontractors across the United States to perform consumer electronics installations. My company itself would not own any trucks, any ladders or screwdrivers... we would simply provide overhead absorption to other companies, giving them additional demand for their existing workers. The demand would come from retail partners I could offer the service to who did not need to have their own W2 installation expense... they could simply refer the jobs to us, we would subcontract the jobs out, and then rebate the retailers for a percentage of the installation expenses. For simple math, we would

Install a television.
The consumer might pay $99.
The installer would keep $80.
We'd keep $10.
We'd give $10 to the retailer.

So far, so good. However, the retailers we were interested in were national retailers. We began to assemble a database of installers. Contracts, credentials, insurance... we had just a few people in a few cubicles in Minnesota running the "company." In theory, a job would come in, we would subcontract it, and everyone makes money.

So we started. With Walmart. (you can probably see where this is going before I even get there). We beat out several competitors for a live test with Walmart, under the pretense we would be able to scale this if successful. So far, so good.

We started with Walmart in Kansas City, MO. Single market, a few Sam's Club locations. No big deal. We found an awesome contractor. Everything went smoothly. So smoothly, that 30 days in, we added a second market. Then a third. Then a fourth. Then we added Circuit City's Fire Dog installations in select markets.

We never lied about how we were doing what we were doing (subcontracted labor) but we stretched the truth about what our capabilities were. We figured, as most do, that we would cross that bridge when we came to it.

Then we came to it.

Walmart's appetite increased much faster than I could glue things together. The world's largest retailer was my first customer. Balls of steel, but without really any infrastructure or capability to perform. Overpromised. Undercapable. Some times, it's not that easy to cover a "white lie" which is a cute label we use when we don't want to really get introspective on a real lie. I was definitely over my head. People trusted I was who I said I was. And I was... sort of. But the sort of not was about to let down the world's largest retailer and the people ... the faces... the real people that entrusted me as they stuck their necks out for me with their job credibility resting on the contractor they committed to. I had to find a solution - for them, not for me. Saving face was over. Now it was time to figure out how to finish what I started as much to save all of the people that were involved. Real people, real lives, real jobs. It wasn't a game.

I didn't have several months to get capitalized, or really even several weeks to methodically backfill Walmart markets all across the United States.

In a fire sale, I sold the company right when things were about to get real. I had oversold my capabilities. It cost me the company.

Fast forward to today. It's a decade plus some later, and the company that acquired my operation from the scrap heap still handles some consumer electronics installations at Walmart today. The idea was right, the intention was right, but the execution was horrible and the integrity was questionable.

There probably would have been a better path. This became one of the scars that I wear even today.

Dave thank you for sharing this story. Probably not an easy thing to do.

what happens if you were ‘found out’.

I think this a great litmus test.

What if you found out your fitness guru who lost "tons of weight" actually lost it because he had liposuction and a stomach staple?

What if you found out your guru who was selling seminars on how to get rich actually had a net worth of only $3000? But in his advertising was claiming, "I'm started 10 companies, got millions of downloads, and travel the world." Both statements are true which is why the guru uses slippery bro-marketing language to conceal the former truth with the latter.

More realistically, fake it until you make it may be something as trivial as filling out your About Us page with fictitious employees from Mr. Miller’s gym class. I didn’t really care for that portion in the Millionaire Fastlane , but MJ said it started as an inside joke and he questions the ethics of it.

Obviously because I told this story for everyone to read, I felt it was OK and didn't cross any lines. (Using "if the truth came out" litmus test above.)

But yes, I've heard some negative feedback on that portion of TMF and I can understand why. For some, it's over the line because it simply isn't true, inside joke or not. The real question, who is that untruth injuring (or helping?) -- if a potential customer sees a larger company, they might think we are more stable and not going to disappear overnight. If a potential competitor sees a larger company, they might think they're too small to compete. I felt both "conclusions" of someone seeing a larger company were true, hence why I probably justified it. But more than a decade later, I can see why this starts to dabble in the realm of "bro-marketing."
 

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Dave thank you for sharing this story. Probably not an easy thing to do.



I think this a great litmus test.

What if you found out your fitness guru who lost "tons of weight" actually lost it because he had liposuction and a stomach staple?

What if you found out your guru who was selling seminars on how to get rich actually had a net worth of only $3000? But in his advertising was claiming, "I'm started 10 companies, got millions of downloads, and travel the world." Both statements are true which is why the guru uses slippery bro-marketing language to conceal the former truth with the latter.



Obviously because I told this story for everyone to read, I felt it was OK and didn't cross any lines. (Using "if the truth came out" litmus test above.)

But yes, I've heard some negative feedback on that portion of TMF and I can understand why. For some, it's over the line because it simply isn't true, inside joke or not. The real question, who is that untruth injuring (or helping?) -- if a potential customer sees a larger company, they might think we are more stable and not going to disappear overnight. If a potential competitor sees a larger company, they might think they're too small to compete. I felt both "conclusions" of someone seeing a larger company were true, hence why I probably justified it. But more than a decade later, I can see why this starts to dabble in the realm of "bro-marketing."
My knee jerk, moral reaction, is that a lie is a lie. Faking it is a lie directed at misinforming another person. My personal policy is that I don't knowing nor intentionally lie, cheap or steal.

An untruth, a lie, takes many forms and I really had to think past my initial reaction.

Upon reflecting a bit more, I thought about the fact that if you act the part of the person you want to become, those actions are the path to fulfill that transition. You must see yourself being that person, before you can become that vision.

Don't we fake it just about everyday in order to fit into our little worlds? Whether it takes the form of trying to act like we're more than we are to impress others, or down play our personal situation in order to fit in. Isn't that a mild form of faking it?

Is being nice when you don't feel like it, or politically correct when that position violates your core beliefs, another form if faking it?

You're right. Where do we draw the line? It's not a black and white issue -- lots of gray areas.
 
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Vigilante

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I have one of the ultimate "fake it until you make it" stories but I will have to search the Forum first to see if I have written about it previously here.

I had a front-row seat to one of the largest Ponzi schemes in US history and saw it built from its Inception to its implosion.

A 747 used as a private jet, millions of dollars in philanthropy, seven figure bonuses... and the day an FBI raid stopped the music mid-song.

If I haven't written about this previously on the Forum I will recall it for you here and then use outline as the fuel for the first podcast I do this summer for Mind Your Business.
 

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Blurred Lines, part I.

It didn't start out the way it ended.

I was pretty young at the time, freshly moved back to Minneapolis from my job as a national buyer for Walmart. I was doing my own thing, and had multiple streams of income. It was at the tail end of the .com era, probably 1999.

I started having some discussions with a local entrepreneur who was heavily recruiting me to join him. He wanted to launch a B2B exchange, which we later did and dubbed it RedTagBiz. The exchange would bring together business buyers and commoditized sellers in an online marketplace to create a new path to conduct business.

We had several lunches catered into his office. I ate very little as we talked strategy in the light of the salt water aquarium that illuminated his mahogany lined office. We talked about everything from Amazon to spirituality. Later, I imagine our discussions were somewhat of a refuge from the storms in his life. People get good at compartmentalizing things, and this was likely an oasis. A break. A chance to talk through some deeper, hopeful things.

He owned some retail stores, and was a supplier to some large national retailers at the time. He also was the company behind the Minnesota Vikings website and fan store. In addition, he owned a few eCommerce stores including RedTag.com, a B2C general merchandise store.

He always used to tell people about the revenue he was doing. Naively, we would laugh behind closed doors, believing that "the only thing bigger than who we were was who we said we were." We just attributed it to "Tom being Tom."

Young and naive, I had no idea what the implications of such a white lie could become. Most had no idea of the chess game they were unwitting pawns in.

To be continued...
 

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My side gig is a website that I run alone. I’ve hired some writers in the past, but otherwise it is just me. However, I don’t want the site to be a personal brand. This could be helping or hurting the business. Who knows, but that isn’t the point of this post.

When I write on the site I will often use the word “we” instead of “I”. It is kind of the Royal We. No fake photos of other employees or anything like that.

This is my white lie. This is me “faking it”. It still bugs me when I do it so I avoid it as much as possible. Unfortunately, making the brand a personal brand (I) bugs me so much more.

I feel mostly ok with it because I’m not selling the company to be something huge. I’m not trying to change opinions or fool people into thinking the website is something it isn’t. The about page says that I made it, but even that makes me cringe. I just don’t want to be the face of the site (for better or worse). I’m simply not Pat Flynn or Gary V.

I know this is very small compared to the other examples, but this is my little ethical dilemma I sometimes think about and is in line with the photo example MJ references.

*end confession*
 
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jon.a

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My side gig is a website that I run alone. I’ve hired some writers in the past, but otherwise it is just me. However, I don’t want the site to be a personal brand. This could be helping or hurting the business. Who knows, but that isn’t the point of this post.

When I write on the site I will often use the word “we” instead of “I”. It is kind of the Royal We. No fake photos of other employees or anything like that.

This is my white lie. This is me “faking it”. It still bugs me when I do it so I avoid it as much as possible. Unfortunately, making the brand a personal brand (I) bugs me so much more.

I feel mostly ok with it because I’m not selling the company to be something huge. I’m not trying to change opinions or fool people into thinking the website is something it isn’t. The about page says that I made it, but even that makes me cringe. I just don’t want to be the face of the site (for better or worse). I’m simply not Pat Flynn or Gary V.

I know this is very small compared to the other examples, but this is my little ethical dilemma I sometimes think about and is in line with the photo example MJ references.

*end confession*
I used to do the same thing, in my mind thinking it's okay I'm married.
 

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Over the years, I've seen a lot of cheating, stealing schemes. Many times, the people involved in those situations, don't see, nor understand their role, and the results of their actions. Sometimes it all starts very small, and mushrooms from there.

Where do I draw the line? When people's little white lies become big enough to hurt other people -- then that's where I believe that "faking it" crosses the line. The other point that crosses that line, is when the person telling or living their little lie, began to believe those falsehoods. They internalize those lies as the truth.

Either of those two results, tell me to immediately make my exit stage left.
 

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Blurred Lines, part II.

He allowed me to move my office into his office, and I was continue to operate my business while I worked on his. I shut down my small office, and set up shop within his corporate offices.

I only received a couple of paychecks before his henchman called me in to tell me they wouldn't be paying me what they had agreed to pay me. It was never really explained why, but it didn't matter to me. I walked. He called me incensed that I would walk out on him. I owed it to him, he said, to have the discussion with him before I walked out... knowing full well he had approved the pulling out the rug from underneath me first. Didn't matter. That was the last time we had any substantive discussion.

In hindsight, I equate it to sometimes when people have an affair. Part of the attraction is the pursuit itself, and when you finally win the conquest the thrill loses it's luster. I think that once I was on his payroll (for even that short time) I was just a line level expense on the payroll.

I wasn't there long enough to really learn what was really happening behind the scenes. It would be several years before we spoke again.

During the dark period when we didn't speak, he :
  • Bought uBid
  • Bought Fingerhut
  • Bought Polaroid and placed TV's under license at Circuit City
  • Bought Sun Country Airlines
I was looking like a huge chump for walking away on the eve of this breakout success. He was traveling the country on his personal 747 that he had converted into a mobile board room, bed room and entertainment center. I was back to working on my own thing, but catching updates on his business as his face graced the covers of every regional business magazine, our hometown newspaper, and every large philinthropic event in Minnesota. He was an advertising sponsor to all of the local sports teams from the Vikings to the Timberwolves and Twins, and his empire was growing at an extremely rapid pace.

In early 2008, we got back in touch. He was on top of the world, and I had a large client in Los Angeles that had some mutual business interests. I was in a perfect position to bring the two sides together. I can also tell you that the number of 000's attached to a check have a tendency to gloss over a lot of concerns. I began to court facilitating/brokering a deal that would benefit both parties on some mutual business interests, and I being in the middle served to benefit in a crazy way if the marriage of these two parties ever consummated.

It's worthwhile to point out, even a decade removed from the implosion, that no money (to my knowledge) ever changed hands in-between the parties, and if it did I was not privy to knowledge about it.

It all changed on September 24, 2008 when the music stopped.

To be continued...
 
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Vigilante

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Blurred Lines, part III.

I remember the morning, but I had to google the date. September 24th, 2008. My phone started ringing off the hook, but my eyes were glued to the television.

I will let this article tell the story better than I could (The Turnaround Men)

Just after dawn on a cool morning in September 2008, two FBI agents and a police officer walked into the Bellagio Casino in Las Vegas and took the security elevator up to the twenty-third floor, where they knocked on the door of a high-roller haven known as the Grand Lakeview Suite. A Minnesota businessman named Tom Petters answered wrapped in a bathrobe. After a moment’s hesitation, he invited them in. The officer searched the bedrooms and closets to make sure no one was listening, and the FBI agents began peppering Petters with questions.

Then, suddenly, Petters’s Blackberry started ringing. At that moment, 1,700 miles away in the leafy suburb of Minnetonka, Minnesota, more than 50 government agents were swarming into the parking lot of Petters Company Incorporated (PCI). The agents entered the building, ordered everyone out, and began opening safes and rummaging through file drawers. Another team of agents descended on Petters’s mansion overlooking Lake Minnetonka, where they moved from room to room snapping photos and stuffing Petters’s belongings into cardboard boxes.


I had several friends that worked for Petters, including several former Best Buy executives. None of them, to the last one, understood what was happening. How frightening it must have been to be in the office that day, figuratively chained to your desk with armed FBI agents swarming the building. Nobody really knew at the time that this was the beginning of the end.

Back to the article :

Within days of the raid, details of the investigation began to trickle out, and the staggering scale of the fraud came into focus. At the time, the Petters Ponzi scheme—which, all told, brought in more than $36 billion—was vastly larger than any known Ponzi scheme in U.S. history (although it was soon eclipsed by Bernie Madoff’s).

...Petters was found guilty on 20 counts of fraud, money laundering, and conspiracy, and sentenced to 50 years in prison.

...The fallout from the scam moved through the Twin Cities like a slow-motion tsunami. Businesses went bankrupt. Charities slashed staff and walked away from half-built offices. Among them was Minnesota Teen Challenge, which lost $5.7 million and had to lay off 22 employees. Countless people also lost their homes or watched their retirement savings dry up. The tight-knit evangelical circles in which Vennes moved were among the most devastated. “If only a few had gotten hit, the faith community could have stepped in to help them,” explains Carolyn Anderson, the attorney representing evangelical investors. “But everybody got hit. The safety net was ripped out.”

I will post one more update to this saga, my analysis of what happened and how it fits here. It didn't start this way for him. Remember when your Mom used to tell you not to lie, as that lie begets another lie? When you compromise your integrity over $500, then $5,000 is just another zero. Exponential human toll got caught up in this moral failure, but it started with little decisions. Little compromises. This collapse of judgment, integrity and fraud didn't happen in a day. It snowballed from the little decisions early on that compounded as more zeros got added and more lives got dragged in to the undertow.

He was faking it and never thought about the fact that he wouldn't make it.

To be continued...for one final installment. - Dave

 
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HackVenture

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Wow thanks for the mind-boggling story @Vigilante

But to me the line is pretty clear, as long as no outright lie is told, the line is not crossed.

I think the ambiguity comes when one "pretends" to be something he is not, like @ZCP describes:

Pretending to be bigger than you are is to me where the phrase comes from. It is also how every single company operates in the beginning.

^ Depends on how you define "pretend" but in majority of cases there's a name for it and it's called "marketing".

If you're "pretending" to be a big company by providing mind-blowing customer service by answering all your emails promptly like you had a full customer service team, "pretending" to be well-established by making sure your website is professional and well-maintained, "pretending" to have a large team and by using "we" when only you and your brother are working in the company, that's legit IMO.

But if you say you have a MBA from Harvard and you simply don't, it doesn't matter what your intention is or how "white" the lie is, the line is crossed.
 

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