Pitch Perfect

Posted by kdow on Mar 3, 2015 2:29:41 PM

In a past realm I was a developer. As a result, I tended to hang out with developers. At some point in my professional journey I parlayed my technical experience into other roles & became more widely used in the businesses I work in. But at heart, my roots lie in development.

As a result, somehow over time I’ve become an asset of sorts to other people. This post is about those people who are often would-be entrepreneurs with ‘an idea worth millions’. With my background & network the potential value I offer is with developers & business plans based on software — and I’m pretty useful with the SaaS model!

Over the last two-plus years I’ve gotten savvy & bold enough to be able to give harsh critiques of ideas & tell people why they won’t be able to live out their ideas. Often times it’s simply that my being in the room brings exponentially more to the table than the “entrepreneur” — which is a big bug bear of mine right now. This post is just a recounting of some of the regular conversations I’ve been having of late. I’m not sure there’s much in the way of insights to be shared here, but I reckon someone might be entertained or enlightened by this.

Infinite Computing Power & API’s Expose Ideas

One benefit of the modern internet is that there is a wild amount of products & services out there, sharing their assets through APIs. There’s a near infinite amount of computing power available to entrepreneurs thanks to Google, Amazon & thousands of others. Services can be bootstrapped largely thanks to so many APIs being available to optimise service offerings.

This means that when someone pitches an idea, I can normally reference something that already exists in the same realm.

An example I have to mind is a conversation I had this past week with someone who wants to build a social tool (immediate fire alarms go off with the word ‘social’). What was pitched exists. It exists multiple times. And worse, the multiple businesses that exist are not mega-bucks companies. Someone smarter than me could argue those ideas are failures.

So when I challenged the would-be entrepreneur on what he thinks he would do that’s so revolutionary & different that would cast a shadow on the existing platforms, he had no answer. That’s the point in the conversation where I offer my email address & get them to come up with a solid business plan before I burden developers to join a startup. Or put a lot of work into it myself.

It’s amazing the number of times someone’s brought an idea to me with no actual business plan outside of “get some guys to build it & we’ll all get rich.” The naivety of this thought process is astounding in people who should know better. Even more, the lack of respect for what developers do (or can do) is disheartening.

Having a lack of understanding for what development takes or what product teams actually do is fine. In many cases it’s valuable to have a business person run the operations while product do their thing in isolation. However, being completely naive about it is another issue altogether. For example, the person I spoke to wanted to have me source a few developers to build out the idea, the process & launch without paying anything. Despite having no visible business plan or capital, this would-be entrepreneur wanted to offer equity & make it a part-time gig. I launched into a lengthy speech at this point.

Not Having A Plan

Often times I’ve had a misguided conversation where the call to action is for me to do all the work while the would-be entrepreneur basks in the glory of his/her idea. My example above is case-in-point; the would-be entrepreneur had bought a domain but done no market research, looked into no funding mechanisms or figured out what he needed developers to actually do.

I know the dream ticket for everyone is to have a lifestyle business where people do the hard graft to earn their living while you, the genius idea-generator, sit in your palatial mansion sucking down cocktails while your bank account grows fat. But it just doesn’t happen like that. It rarely happens in the software business. SaaS is hard. Building software & services is hard. Turning that software into sales & marketing messages is hard.

My point here is that it’s obvious when a would-be entrepreneur pitches an idea where the basic premise is “you do the work while I pretend to manage”. These would-be entrepreneurs aren’t even invested in the business themselves. Why would anyone else get invested?

Not Being Transparent

That said, having no business plan or thought process around where the business is is one thing, but not sharing the idea until I sign an NDA or, as per one example, sign a contract is insanity. And it’s happened twice in the last 6 months.

An example is my being introduced to a wealthy would-be entrepreneur. Inherited money has enriched his life with nice things (a nice house, a niche business & a nice bank account — ripe for a lifestyle business!). He told me that he’s tied to some serious players in the VC and tech world. He even told me that an idea he had for Facebook got to Zuckerberg’s desk. And he loved it.

That feature does not exist in Facebook. It never will.

He met me three times, presumably about the same idea. I couldn’t help him with any of his questions (“how much would it cost to develop?”, “how long will dev take?”) because he wouldn’t tell me what the product, plan or idea in his head was until I quit my job and joined him. He was adamant that I had to cut ties to my existing job in order for him to reveal his incredible idea.

The whole ordeal reminded me of a story of someone I know who worked as a technical consultant during the dot-com boom who had to sign an iron-clad NDA with several lawyers to be pitched an electronic greeting card business.

Earlier in this post I wrote about the wealth of existing services, APIs and products that exist as a result of an open web. Their existence means you’re not likely to be a beautiful, unique snowflake that has stumbled upon the best idea ever. If you — the would-be entrepreneur — had, you probably wouldn’t be talking to me.

My advice to would-be entrepreneurs talking to would-be technical leadership is: if you want to build trust & relationships, share your ideas. Being a ‘walled garden entrepreneur’ does not foster innovation, trust or a business model worth being part of. Openness, honesty, transparency & humility are attractive features of a good entrepreneur. Those are the people who get shit done.

Technical Innovation

Pitching a product idea when you’re not technically minded isn’t the issue here. Most good CEO’s aren’t necessarily millennial technophiles. That’s what the CTO, CPO or equivalent role is all about. Managing the engineering, product & design philosophies in concert with the CEO’s business insights & plans.

If you assume most ideas already exist, your benefit to the market is to provide some sort of technical innovation. Before Apple released the iPhone touch-screen phones existed. The technical innovation was what was to become known as iOS, and the fact that their touch-screen was by far better than any other on the market. Before Google, search engines existed. Google did it better with PageRank, and offered a better UX compared to the competition.

Where an entrepreneur is the one pitching to the technical people, the entrepreneur needs to bring some level of insight from the market, the market landscape & the way the business could innovate. It could be as simple as a one-line pitch that describes the one thing none of the other tools have.

A Strong Pitch

So as to not only list negative examples, here’s a recent example of a conversation went really well; The would-be entrepreneur is currently a c-level at a small company in a specific industry. A niche within a wider pond, if you will.

During his time within this industry he’s come across similar problems that he currently cannot provide a solution to. But, he reckons there is a gap in the market to develop some software to solve these issues. There are pre-existing companies filling these gaps, but none with the insights he has, or with the potential network he has (network effect is always important).

He came to me with a business plan, some offshoot “big picture” plans that could be executed after a year or two to drive additional revenue, a partner who knows finance and another partner who knows sales. All I was needed for was to tap into my network to build a design & engineering team. So I came up with a plan, development timeline & cost structure for him. He came back with notes, feedback & comments. During the back-and-forth of hashing out plans, Skype calls and demos from what already exists on the market we’ve figured out a real product market fit as well as some technical innovations that we can provide with our product suite.

Our conversation has been ongoing for a while now but there may be a real business in here. His technical insight is minimal but that’s not why he’s here. He’s here to figure out the rest of it. And he did. Hell, he even had me on a sales call with another vendor on the market. His one comment after was, “so now you see where we can improve.”

Conversations like this get the juices flowing. Remove the barriers to people like me being able to figure out the solution to the problem and suddenly there’s a business model within the conversation.

This post might seem to be a bitchy rant, and in many respects it is. But my experience of late doesn’t appear to be unique. Other technically minded leadership folk that I know are having the same conversations with would-be entrepreneurs over coffee.

I love — and I really mean this — LOVE the fact that people feel like they have an entrepreneurial itch to scratch. I have it too! I love that Dublin is beginning to feel more & more like Europe’s answer to San Fran (sadly rental prices are part of that!) & there is a vibrant community rallying around this. But, there is a lot of naivety with outsiders who are trying to come in. The technical community is very open & delighted to have new people come in with ideas, insights & so on.

I will say my ‘critiques’ have been met mostly with positivity. Smart folks are happy to get an honest answer, and hopefully the second, third or fourth pitch to someone like me will be more valuable. Not all pitches are weak. But the ones that are weak are so wildly weaker than the strong ones that if we can bridge that gap we’ll have a much stronger community of entrepreneurs out there fostering & nurturing the development talent we have here.