In the technology world, and almost everywhere else people are pitching ideas to be acted upon. Everyone has ideas, some make life better, some easier, some make companies better and some change the world. The ideas that people have are similar to sowing seeds – some get eaten by birds, some grow a little and some become a crop. The question is which is which, recently read a book called Backable by Suneel Gupta, published by Little, Brown and Company, NY, 2021.
Mr. Gupta teaches at Harvard University, prior to that he founded an app (Rise) that was bought by a larger company and sits on a venture capital board which means he has given and listens to many pitches. Why are some successful and some not? In his capacity as a Professor, Mr. Gupta wrote the book Backable. There are many stories in the book, things to learn and some are list below.
One story is about breakfast cereal. Imagine if you own shares in the big cereal companies, for years there was steady predictable dependable profits which translated into dividends. Then over a few years, the industry changed and profits were lower. The issue is why? There were many ideas and theories, including size of families (from 5 plus kids to 1.5 child); changing tastes as nutritional values; and the list went on. After much research, the answer came to the cellphone. When people wake up in the morning, one of the things they do is pick up the cellphone and begin to check it for information of all sorts. When they are reading the cellphone, they are using one hand, which means they have one hand free to do breakfast. Cereal bars are more popular because they can be eaten with one hand, the other solution for the cereal companies is cereals became snack food.
Mr. Gupta has 7 points to make successful pitches.
- Take the idea and allow yourself to consider the pluses and minuses of the idea and at the end of the process you need to be convinced of the merits. People need to see your sincerity and conviction or being the champion of the idea.
- Who benefits from your idea? Establish a central character who uses the idea, is willing to pay for it and show their life is better for the implementation.
- Great ideas tend to stem from an earned secret – a hidden insight you learned through firsthand experience. What research have you done shows you are an expert and you had a break through the process of how you came to this solution. What was your Eureka movement?
- A backable idea communicates the idea is inevitable. The world is moving to this place and the idea allows you to come along for the ride. If you invest in the idea your vehicle is at the front of the line.
- When you are pitching, do not give a neat tidy wrapped up picture, allow the listeners and those with access to resources to join in the process. You are pitching to show them how they will succeed with you. The listener who understands the idea, will bring his/her perspective into play allowing for questions. If they are looking at their phones, you have a problem.
- Prior to pitching for big money, practice and try to find people that will object, in order to address the elephants in the room and use the rule of 21. Practice 21 times for it allows you to have a recovery muscle when according to the Peter Principle if something could go wrong, it will. You need to show all sides of your character. Understand reinvention is an essential part of the backable process. Your presentation likely will evolve over time.
- Show what you do or how your idea will be implemented. People are more compelling when they are being shown than describe to. Remember the idea is the most important thing, not you. Also note, just because you pitch someone, not everyone will like it or want to do something with the idea. You need to find someone who shares the same space as you and is willing to work with you.
Linking to dividend paying stocks, the executives who run profitable companies will hear many pitches because they have money to invest, the group which does this is corporate strategy and the Mergers and Acquistions group. The group will often say no, but when ideas fit the company, positions or the whole company can be purchased for talent. In your investments, how is the internal M&A group doing?
There are more questions than answers, till the next time – to raising questions.