Tuesday, 1 December 2009

The Ballad of Big Red

As an entrepreneur, you are constantly talking your business up. But there is a fine line between pitching hard and lying through your teeth. Sometimes you stay the right side of the line but you pitch too hard and to your surprise you actually get what you pitched for!

That can be a bit of a shock and that brings us to the Ballad of Big Red. But more of that later.

There is a game that start-up guys and Venture Capital guys play.

Start up guys are expected to "pitch up". Your business is going to be a BILLION $$ business. Your market is a BILLION $$ market. You have a WORLD CLASS team. You technology is WORLD BEATING. Your business model is PARADIGM SHIFTING. You are the new [INSERT LAST SUCCESS STORY HERE].

In some cases much of this might actually be true but whether it is or not, as a start up guy you pitch it. In fact you will learn to speak IN CAPITAL LETTERS.

VC guys demand that you do this. Ever seen a pitch where the start up guy says "I think we might at a stretch build a £10m business and you might make 2x your money - can't promise anything though. Let's see how it goes"?

VC guy needs to hear you pitch up, and then they immediately discount it. However if VC guys likes what he's hearing, he starts to pitch to you too. He is SMART MONEY. He's got CONTACTS. He can TAKE YOU IN TO CHINA (whether you want to go there or not).

By the end of it you and the VC are PRACTICALLY SHOUTING AT EACH OTHER across the desk, STRUTTING AROUND LIKE PEACOCKS. Start up guy and VC in full flow, going at it hammer and tongs. It is truly wonderful to behold.

In reality, you should pitch what you believe. If you believe that your business will turn over £100m next year, pitch it. Why not? It's your business. You are going to have to make it happen if they say yes. So pitch the future that you believe you can create and if the other guy doesn't believe you, go find someone who does.

If the other guy does believe you, you had better be ready to clamber aboard and ride your heart out. Which brings us back to the Ballad of Big Red.

So, a couple of years back I'm on holiday with the family in upstate New York. Wife wisely rests at the hotel whilst me and the kids go horse riding. We arrive at the stables and pay our money. Now this is where things go a bit wrong.

In mitigation I would like to remind you that I am a middle-aged man, comfortably into my 40's who has been known to boast to my kids on occasion about my extraordinary capabilities and can on occasion puff out my chest when in the company of the younger, fairer sex. So the cards were stacked against me, really, when the cowboy who assigned us to our horses turned out to be a cowgirl.

Having assigned midget pony things to the kids, she turned to me and drawled "do you ride much?" My son looked at me expectantly. He knew the truth. How could I have slaughtered all those buffalo "back in the day" if I didn't ride? Surely I wasn't lying when I told him I had ridden Camels in the Sahara?

I heard myself pitching up. "Sure, I ride a bit" I said in a fake American accent that I think came out a bit Lithuanian.

When I say I ride a bit what I meant was that in th early 70's myself and my elder brother once rode a donkey on a beach in Spain. It jiggled up and down and made us laugh a lot. But I didn't bother to go into detail. I "pitched up".

"Cool" smoldered Cowgirl "let's give Big Red a run out this afternoon."

"Look" says me in my best Hugh Grant "I err, errr, what, eh, what, I mean, are you sure?"

"Oh, its no problem, Sir"

When American's start calling you Sir, you know you are in trouble. "Step away from the car, Sir", "Let me see your hands, Sir", "Is this your goat, Sir?" You know how it goes. Best to give in.

Then they bring out Big Red. ARRRGGGGHHHHHH. A giant mutant, elephant of a horse that clearly was not in the mood for games.

I let the party trot gently off into the woods, saying that I would follow behind before starting the lengthy process of hauling myself up onto the BEAST FROM ANOTHER PLANET. I lay on its back, gripped everything I could grip and fortunately the T-REX IN A HORSE COSTUME decided to walk calmly after the rest of the horses.

All was well until Cowgirl called out from the front "Let's give them a run". Off they shot and off went Big Red. ARRRRGGGGGHHHHH!!!!

Anyway, all's well that ends well. I survived but I learnt three lessons

1) sometimes when you "pitch up" the other person believes you, so you'd better believe yourself too

2) if you walk into the VCs office and anyone around the table is dressed as a sexy cowgirl, don't inflate your figures by 100%

3) if you do find yourself sitting on top of Big Red, hold on for dear life and ride the damn thing! You'll live.

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