I was reading a Fast Company Magazine interview with Sam Altman the other day, in which he was describing the founding of Y Combinator. He said, “With VCs, there were all these terms that were deliberately obscuring what was going on, and I think they liked it that way. Liquidation preferences and ratchets and anti-dilutions and drag-alongs and no-shops. It was this club that was hard to break into.”
When I teach business writing courses I preach against something called “corporatese,” the gobbledygook that the business world uses to sound smart, especially in government agencies. I’ve written about this before too. Chrissie Maher, who founded the Plain English Campaign, argues that the financial crises of 2008 – 09 was caused in part by undecipherable corporatese in the banking and financial sectors. If people understood what a “collateralized debt obligation” was, she says, better choices might have been made.
I have been an unwitting victim of corporatese myself. In 2006, in an attempt to save some failing commercial real estate owned jointly with my brothers, I did a “conduit” refinancing deal. Even though I had to take three months off work to walk us through this process and was intimately involved in every detail along the way, I had to Google the term just now in order to find language to describe it, because I still don’t understand what we did. In a conduit deal, many single mortgage loans of varying size, property type and location are pooled and transferred to a trust. The trust issues a series of bonds that may vary in yield, duration and payment priority, and nationally recognized rating agencies then assign credit ratings to the various bond classes.
All I really remember is about the experience is that I was on the phone with Wall Street brokers listening to them use incomprehensible language, and god help me, after a while I stopped trying to understand and just started doing whatever my lawyer, accountant and management company told me to do. A few years later, we got upside down again and lost the property in a bank auction.
Altman’s point is that corporatese not only obscures meaning, but it is sometimes used to create an elite, exclusive class that intimidates and discourages the participation of new groups. He created Y Combinator to give creative young entrepreneurs a more accessible option. I see my own experience in a slightly different light now. It wasn’t just exhaustion and confusion that led me to give up trying to understand those Wall Street brokers ten years ago; it was also the feeling that I had been outclassed and outsmarted and had best keep my mouth shut, lest anyone figure out that I didn’t belong to the club.
The next time you’re tempted to throw a bunch of big words into your document, just remember that it doesn’t take a lot of skill to sound smart by inflating your language. You can use those big words without even understanding what they mean, just by using an existing template. What takes skill is to translate all those big words into plain English so that everyone clearly understands it.