Telling Truth With Lies in Stories

True confession: In planning workshops I use this “fact” a lot:

An SBA study in the middle 1990s showed that 43% of the businesses that went under that year were profitable at the time.

It tells a very important story. It speaks truth. But it might not be true. I vaguely remember such a story, but I’ve searched for it, and I still can’t find it. It might also be true, but I’m not sure.

Furthermore, which tells the truth better: the story as I tell it above, with facts (43%), or the real truth, which would be:

I’m pretty sure I saw a study once that showed a surprisingly large number of companies going under even though they were profitable.

So, you tell me, am I lying? Or does 43% instead of some vague number make it more credible.

Back in my consulting days, I learned that when a client asked me the inflation rate in Mexico for two years earlier (which would happen on occasion) I would say “26%” instead of “I forget exactly, but it was fairly high, something in the 25%-20% range.” Was I lying?

Is 26% a good surrogate for “fairly high?”

Is 43% a good surrogate for “a lot?”

I think this is the right way to do it. Do you?

* * * * *

Tim Berry, Entrepreneur and Founder of Palo Alto Software, and Borland International About the Author: Tim Berry is president and founder of Palo Alto Software, founder of, and co-founder of Borland International. He is also the author of books and software on business planning including Business Plan Pro and The Plan-as-You-Go Business Plan; and a Stanford MBA. His main blog is Planning Startups Stories. He’s on twitter as timberry.


Tim Berry Tim Berry is Founder and Chairman of Palo Alto Software, Founder of Bplans, Co-Founder of Borland International, Stanford MBA, and co-founder of Have Presence. He is the author of several books and thousands of articles on business planning, small business, social media and startup business.

24 Reactions
  1. No. I guess I don’t think it is the right thing to do. Many times I have been on the receiving end of “high-priced-consultant-BS”. I may not find out that it was BS until after the consultants bill has been paid, but I never felt real positive about bringing them back.

    I’d rather you just told me the truth and had the correct information for me after you had had time to look it up.

    This may be too idealistic for some but when you are paying consultants for a service the least they could do is tell you the truth.

  2. If you want to sound knowledgeable, then yes, that is the right way to do it. There’s no way to be able to always be dead on with statistics at a moments notice.

    Stewart: Tim’s point is not that you feed anyone BS, rather that the larger truth is what is important. A few percentage point difference does not skew the main assertion.

  3. Matt,
    I understand. I would just rather the person tell me the truth instead of having me find out the truth later and wonder if they embellished the facts on purpose or they were just trying to get their point across.

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  5. If you find that a certain statistic is so important that it is part of how you close a deal with a propective client or how you establish your credibility with a paying audience, then, yes, you should either find the statistic or abandon it for another. You are not forced to lie, fudge the truth, or insert dubious data. Build your arguments on the data you can confirm or on at least what you can show was published (even if THAT author may be doing exactly what you are doing).

    I am partnered to an actual researcher who spends many days combing through archives and the Internet for paying clients, so I may be biased here. But sloppy facts become viral “truth.” Just don’t.

  6. Tim — well, to be honest, I have a hard time with this. My wife will tell you I am a stickler for accuracy and, before I went full-time into IT, I was an economist. Facts that you can’t back up with sources are always open to question, as I repeatedly found in 20 years of college teaching. Unless you can site sources, they can be pretty damning to your credibility. Once, in response to a query about my facts, I duplicated 30 copies of about 50 pages of census data and gave it to my students as supplemental reading!

  7. Tim — well, to be honest, I have a hard time with this. My wife will tell you I am a stickler for accuracy and, before I went full-time into IT, I was an economist. Facts that you can’t back up with sources are always open to question, as I repeatedly found in 20 years of college teaching. Unless you can site sources, they can be pretty damning to your credibility. Once, in response to a query about my facts, I duplicated 30 copies of about 50 pages of census data and gave it to my students as supplemental reading!
    P.S. – Sorry, forgot to tell you great post!

  8. Yes, you’re lying.

    Yes, it’s wrong.

    Makes me wonder that you even needed to ask. Or was this an intentional tactic to generate comments?

  9. As one can see from the comments here, I guess it depends on perspective – and what the information will be used for in the end.

    But I must say, if someone is selling themselves as knowledgable and stating hard facts and numbers – it would be disheartening to find out after the fact that the information was somewhat embellished to an extent. . . that is was provided as “hard fact” when, indeed, it really was more of a “guesstimate.”

  10. I attended in a workshop on public speaking and mind training today. If you want to have an interesting speech, it is better to use a precise and specific number instead of a vague range of numbers, if you want your talk to be remembered and “sticky” by the audience. My personal view is that it seems pretty common to use skewed data and you could almost prove everything and anything with statistics. Maybe you could say that rhetorical statistician are the modern version of Sophists in ancient Greece.

    But keep the “faith”! You will soon be able to find reliable and useful data for small businesses at a “place” near you… 🙂 Anita will tell you more about this in the near future.

  11. @Martin Lindeskog. And what happens when your listener asks what the source of your numbers are and you cannot answer or give a vague answer. Such questions happened to me repeatedly in my classes, and rightly so. Frequently when I hear a presenter state things without a source, I ask about it. I know it lessens their credibility in my eyes, and I bet in the eyes of others, when they can’t provide a source. Yes, numbers are more compelling, but numbers you can’t support are misleading to your audience and undermine you. You’re only lucky if you’re not called on them. Others may not be. The placebo effect was a “data” that continues to live on and to be cited, even though it is now recognized that it is invalid (see Truth is always better than made up facts.

  12. Gary Nickerson:

    I agree with your statement: “Truth is always better than made up facts.” I think that you should have valid sources for your statements. I reported what I learned from a experienced person in public speaking regarding to use a specific number in a speech. Of course you could answer questions after your presentation.

  13. It is true sometimes that vague number can help you get the sale or client. People believe in numbers, but do they believe in you? If people believe you, they will probably believe the numbers and facts you are showing them.
    You have a problem if they don’t and start asking questions about the source.

    So I think it’s no problem to tell a little I’m-not-totally-sure-of-the-truth-lie in your advantage, but be sure on who to tell.

  14. Thanks all for adding a really interesting discussion that really beefs up the post itself.

    This is not as simple an issue as some comments seem to imply. The post is about spoken word, and communicating, in a live situation. As I read the comments I’m taken aback by some of them — as in gulp, oh no, I’ll never be credible again — but still, to me at least, there is a complex and significant truth buried in the fascinating relationship between “43%,” on the one hand, and “I’m not sure, but it’s like 40-something,” on the other. That’s when the context is communicating well, live, something you know to be true; and the objective is to best serve your listener with some lasting value.

  15. Wow. This post drives intrigues as what I can read on from other commenters.

    You know Tim, it really depends on the person you’re talking to but of course I know most of the time we can’t predict that person’s preference in one meeting.

    So IMHO, I think it would be better for you and any other consultants out there to just tell me the truth. Like for example, you will just have to tell me that you are unsure of something and you don’t have to pretend as an all-knowing person by presenting me with inaccurate values.

  16. Why do we find it necessary to sound like the authority on every subject under the sun? It’s okay if you don’t know the answer instead of spewing untruths. I think you would be viewed as a person of integrity if you just admit “I don’t know, but I can find out for your with just a little research”. I think we tend to fall prey to the “I’ve got to have it all now” attitude. Patience is a virtue, or so they say. Let’s practice a little more patience with one another, and just maybe we can all come out on top!

  17. Jackie Williams: I agree with you regarding the virtue of integrity. I often say that I don’t know, but that I could look into the matter and come back. But the whole point was described as a public speaking situation and how you present a topic in an interesting way. You could always open up for questions after the talk.

  18. Wow, this is one of the more energetic comment threads I’ve seen lately. You did a good job of striking a chord, Tim! From the sounds of your comment below, you were equally taken back and I appreciated your clarification and position above in the comments.

    I admire you for bringing up the issue of the sometimes gray areas we can get into in live, real, situations that happen quickly. I think the reality is sometimes we desire to be in an authority position and sometimes it is okay for our ego and professional position to reply with, “I don’t know, but let me get you the answer.” Sometimes it isn’t.

    The thing that I always try to remember is that whenever I point a finger at something or someone or a situation — is there are now three pointing back at me. Life is full of gray — who am I to say you’re lying? You were in the situation, not me. But the comment you put in quotes in your post seems to be the best response!

    “I’m pretty sure I saw a study once that showed a surprisingly large number of companies going under even though they were profitable.”

  19. In recent past there are many big companies which done the tampering with their accounts and assets balance. Enron of USA and Satyam of India is the big name under this.

  20. Small Business Tools

    I think this is obviously a lie. I also think handwaving and saying it is about the difference between being vague and being specific is a deception. If you are wrong, you are wrong whether you are being vague or precise.

    Presenting a statistic is an appeal to authority (you are implying some study was done.) Making up a statistic is the same as making up your authority.

    Also, it is easy to be both precise and authoritative:

    A quick search yields this paper [1] which specifies all the reasons why it is difficult to determine how and why businesses fail and why everyone who does a study comes up with different numbers (a lot of it has to do with their definition of “fail” or “go under.”)

    It then goes on to define a perfectly reasonable definition for “failure” and computes statistics across a 30 year period for a given set of businesses (service and retail) for which information for why each business failed was available.

    “Of the 5,196 business start-ups during the 30 year period of the study, 49% had ceased or been sold by the end of 1990.”

    It then breaks down the reasons each business failed.

    This article was very easy to find and even if it turns out to be ultimately wrong, you would at least have a source from where you can back up your statistics. Also, it was only one out of hundreds of results. If you don’t like this one, pick another.

    Of course, lying with statistics is pretty easy. The paper I reference mentions four different possible definitions of “failure” with failure rates per year ranging from .7% to 4.1%, depending on the definition used.

    Since your statistic presents something that is prima facie counter-intuitive (that somehow profitable businesses are failing at a truly astonishing rate) I think the burden to back up that claim should fall squarely on you, as the presenter.

    [1] (PDF link)

  21. Small Business Tools:

    Thanks for finding the source. You are arguing in a good way. I will follow you on Twitter. Who is behind the site?

  22. @ Small Business Tools: As a former economist (not an IT consultant), thank you very much. Both your comments and the study were very helpful. Unfortunately, the one problem with the study is its time frame, which, unfortunately, probably tells us nothing useful about today.

  23. I’m a few days late on this, but I cannot understand how you can think a flat out apparently factual statement “An SBA study showed 43%…” is the right thing to say if you KNOW you DON’T KNOW if it’s true. You actually KNOW that it might NOT be true. And you are asking if it’s better to just say that than to tell what you KNOW is the truth “I saw a study that showed a large percentage”….???

    If you think it’s important for communication’s sake and to “serve your listener with some lasting value” to have a concrete percentage, then find a TRUE concrete percentage. Making something up is wrong, especially if you are trying to deliver truth. The fact that you ask the question when you state you are trying to deliver “truth” boggles my mind!!

  24. I also don’t understand how you can say:

    “It speaks truth. But it might not be true.”

    What you should have said is “It might speak truth. I might be full of it. Should I tell the story anyway?”