First-time entrepreneur Ethan Perlstein has a unique strategy to get ahead: Telling the truth.
"To beat me, any potential rivals would have to out-transparency me," said Perlstein, in an interview with CNBC. "And that's anathema to the status quo."
Perlstein's approach with his start-up, Perlara, which is working with families to find cures for rare diseases, is radically different from how most start-ups operate.
Investors and boards typically pressure start-ups to stay quiet. A lot of entrepreneurs also believe that secrecy will help them quietly sneak up on incumbents. Plus, it can be a bit embarrassing to talk about non-existent revenues in the early days of a company. It's a lot easier to win investors by selling a big vision.
Perlstein wants to start a movement to do just the opposite: Share numbers, share data, share everything. That includes saying what he thinks, even if that means pissing a few people off. (Perlstein almost certainly raised a few eyebrows when he referred to tech investors as little more than "biocurious," while insisting that the best way they could help him is to cut the platitudes and cut him a check).
To test out Perlstein's commitment to openness, CNBC shared a handful of questions that would get a polite but firm "no comment" from most founders. He shared his responses via email:
- Perlara booked revenue of $250,000 in 2017 and Perlstein is hoping to secure that amount within the first few months of this year. He believes he's on track.
- He pays himself a salary of $200,000.
- His biggest disappointment about a customer falling through? After a "lot of time" talking to pharma companies Sanofi and BioMarin, he didn't get a contract.
- He pitched 75 venture funds last year and about a quarter of them never engaged again after the first meeting.
- Fund-raising was an "emotional rollercoaster" that became particularly stressful when it became clear his company wasn't going to get an institutional lead investor and its runway was shrinking. It was "the most challenging experience of my professional life so far."
- His goal for 2018 is to be profitable. To do that, he'd need to make 2017's revenues in the first few months of this year.
Perlara has raised just shy of $10 million in venture capital since its 2014 inception. It is a graduate of one of Silicon Valley's most competitive accelerator programs, Y Combinator.