What should you do about warts?
No, no, not that kind of warts. I'm talking about the warts in your product, or the warts in your pitch. You know what I'm talking about. Those inconvenient little facts or nagging problems that you wish weren't there.
Should you hide your warts? Show them off?
Back in 1999, the answer was clear: hide them, and hopefully no one would spot them before you went public and were sipping umbrella drinks on your own private island.
Today, I think the best way to deal with warts is to tell your customer (or VC or significant other) about them, and explain how you've mitigated their risk or minimized their effect.
For example, I'm thinking about switching to T-Mobile. T-Mobile has poor coverage in the Bay Area. However, they have the best cell phone rates. To mitigate their risk, T-Mobile lets you have a two-week free trial of any of their phones--that way, you can figure out for yourself if their coverage is acceptable in your usual haunts.
That to me is a great example of acknowledging your warts and mitigating them in a way that builds, rather than tears down customer trust.