A VC in Vacationland

I would estimate that about 50% of the pitches I hear include some variation on the title of this Blog.  The entrepreneur, in an effort to distinguish his or her product or offering, claims that their idea is unlike anything else the world has ever seen.  This often confuses me. 

I start by listening intently for the "new, new thing" in their presentation.  Often, it takes me a long time to understand that what they are proposing in actually like something else in the world, only different. And I think, why didn’t you say this in the first place?  Ideas need context, not positioning as unlike anything else.  Very few things are really true innovations.  Is Amazon, a fantastically successful on-line retailer truly a new, new thing?  Not really in my mind, it’s just a fantastically successful web-based book store.

I was reminded of this conundrum the other day as I was listening to an interview with Norman Lear on NPR’s The Long View. For those too young to know him, Norman has had a distinguished career as a television comedy producer, including one of the most politically incorrect TV shows of all time, Archie Bunker. Norman and the interviewer were speaking about successful movie pitches.  "It’s just like another TV show or movie that was very successful, only slightly different" was the phrase they were tossing back and forth as they discussed his career and how he pitched studio executives on his ideas.  As I listened, I thought that this phrase was a great way to think about how to position an entrepreneurial idea with prospective investors.

So here goes–Dave’s thoughts-of-the-day on how to position your idea with investors: 

Don’t pitch "it’s not like anything else in the world".  Why make it hard for for your audience to understand what you are doing? What do you gain by confusing those people that you want to be investors?  Honestly, many VC’s, including me, have the attention span of gerbils when it comes to new ideas.  If I can’t see it in a minute then, at minimum, I become skeptical.  There are times when I begin to get it after a few minutes and may help an entrepreneur simplify their message. There are other times when the entrepreneur fights me, with phases such as "You don’t understand!".  End of discussion from my side.

Do position your idea in the correct competitive context.   Find a comparable, successful, set of competitors and show how your idea is "slightly different", but can make a big splash in the market.  Speak about how your idea improves upon the prevailing technology or solution and how it can create new value for your potential buyers, compared to the competition.  That’s what the investors want to hear–facts and well thought out logic around who you are better, not aimless claims about being the new, new thing.  If you don’t, you can bet that they are going to ask you the competitor question and not believe you if you say that you do not have any.