3 Types of "No" Every Entrepreneur Should Learn (and How to Thrive From Rejection)

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Rejection can be powerful. 

The word "no" serves a special purpose in business and especially in entrepreneurship. Every founder and innovator has heard it, probably thousands of times. If approached with the right mindset, "no" can be a guiding force to propel a business forward. A "no" can help you improve your ideas, illuminate blind spots and even protect you from relationships and partnerships that would not have been good for you or your business.

When I was younger, I wore my heart on my sleeve, which meant that any rejection was palpable to those around me. I was easily shaken by rejection, and as a result, I spent a lot of energy trying to change people's minds or prove to them wrong. I do not recommend this approach. Not only did it not work, but it also drained my energy. That other people's words could rattle me, control my feelings and shape my behavior was a problem. Consider this: If your brain is occupied with constant counter-arguments and feelings of being offended by every rejection you receive, how can you possibly have space for listening and learning? You can't.

Eventually, I became more curious about the types of rejections I was receiving. Not all rejection is the same, and the ability to recognize the difference can empower you to be an effective decision-maker and sustainable leader. Over the years, I've identified three types of "nos:" the ignorant "no," the busy "no" and the thoughtful "no."

The ignorant "no"

This type of "no" comes from a person who doesn't understand your industry and won't invest the energy to do so. People's ability to understand new ideas is limited by their own experiences. Not everyone you pitch will have the ability to digest data on new businesses or track abstract ideas that do not already exist. Take, for example, the newly retired telecommunications executive I met in the San Diego harbor for drinks. He was looking for new investments, but after my pitch, he looked me dead in the eye and told me my business would never be successful. Younger me would have been hurt by his rejection, but I knew he simply didn't understand the finance and billing structure in healthcare and therefore did not understand the innovation I presented to him. It wasn't personal.

The busy "no"

This is a person who is so busy, both in their calendar and their mind, that they don't have time to learn new ideas. They are overloaded by their multitasking, and they have no capacity left for new thinking. I met with an investor in Barcelona who was this way. During our meeting, I could see the sweat bead up on his face and his hands shaking. This guy was scheduling and coordinating other things during our time (pretty rudely, in fact). After my seven-minute pitch, he suggested I change my entire business model, handed me his business card and asked me to reach out when "the work was done." At first, I found this exchange confusing, but then I realized: He hadn't been listening. Not really. His mind was obviously elsewhere. This "no," like all busy "nos," I chalk up to bad timing, and I move along.

The ignorant and busy "nos" aren't worthy of your energy. Don't get wrapped up analyzing them or allowing them to direct your behavior. It's important not to judge the "no" or the person saying it. Simply accept that they're not the right fit, and move on. The thoughtful "no," however, is where the treasure is.

The thoughtful "no"

This "no" comes from somebody who is curious about your ideas, asks smart questions, spends time with you and shows interest and empathy. It is also likely that this person already knows the industry or is willing to learn it with you. One example that comes to mind is a major contract I didn't sign. We were in negotiations with a giant U.S. corporation to enter into a co-marketing partnership. It would have been huge exposure for our small company, but it was a lot of work. After months of due diligence, one of their executives took me to dinner and broke the news: We would not partner. He pointed out, rightfully, that our respective companies were not evenly matched, and that my team could not sustain the pressure of meeting all the requirements, maneuvers and liabilities. I was devastated. But he was right, and not entering into a partnership with them allowed my company to flourish in other ways. I'll always be grateful for his rejection.

Over time, your radar for the types of "no" will become finely tuned. When you get a thoughtful "no," you'll be able to recognize it as a gift. You'll use your entrepreneurial superpower and put all your focus into learning what these people have to say. What makes them think that your idea might not work as you have planned? What data and experiences do they have that you could learn from? What can you do differently or better?

In the early days of entrepreneurship, a "no" can sting. Rejection feels deeply personal because your business is deeply personal. Entrepreneurs are proud and passionate people, and going all-in with your idea or product is normal. You've probably made great sacrifices in order to build your company. Long nights, time away from the family and financial insecurity are all part of the experience.

The lore of entrepreneurship can sometimes lead people to believe that great businesses were born overnight, and that's simply not true. Leaders who eventually find success first face barriers — sometimes for years — and yet that doesn't seem to deter them. They remain persistent in the face of rejection, but they also understand the different types of "nos" and how to proceed after hearing one. If used correctly, a "no" can catalyze growth for you and your dream.