Collar Your Enthusiasm
The other day, a team of entrepreneurs came to pitch their high-tech startup for funding. This motivated group of guys wanted to raise around $10 million for their new, super duper, unique, revolutionary, paradigm-shifting, outside the box, knock your socks off, we’re all gonna retire young, give me your money now technology. After the customary small talk and by the time they were about to start their presentation, I almost wanted to hand the “CEO” the shirt off my back.
Why is it that someone will always show up to an important event or meeting with a brand new dress shirt obviously bought the day before and unpackaged that same morning? Men’s shirts are folded and packaged such that they look crisp and flat on display; once the pins are removed and the garment unfolded, huge industrial wrinkles and creases scream out for attention. Doesn’t he know that he’ll look silly with the freshest new wrinkles? New wrinkles are so much uglier than old, familiar wrinkles and purposeful creases. At least old wrinkles are the result of well-worn habits, habits like never looking at your blind spot when changing lanes, or smelling new books just bought and old books long forgotten, or picking your nose when the coast is clear, or crunching ice when there’s no more soda left, or singing songs in the shower with the bar of soap as microphone.
A few minutes of slides and market data passed and I interrupted with my usual questions, “Who are your potential competitors?”
“We don’t have any competitors. Our product is so innovative that it will define a brand new category,” replied the “CEO” with earnestness.
“Okay…what are your competitive advantages? Are there any barriers to entry or can someone just copy your business model?”
“Well………we will achieve first-mover advantage and build a strong brand. A strong brand is something you just can’t imitate.”
The worst of all was that, because of the way new shirts are folded and packaged, the new wrinkles and creases all converged on two points in close proximity to where the man’s nipples would be. This had the exaggerated effect of making the man look as if he walked in from a frigid winter storm. The air conditioning was not turned on and neither was I.
“How much experience does your management team have in this industry?”
“Combined, we have well over 100 years of experience!”
To which I responded, “Alright, then please discuss these financial forecasts covering only the next five years.”
“…by year five, we will grow revenues to about $250 million and expect to go public in an oversubscribed IPO.”
How does a new shirt replace a good business plan? It doesn’t. An old shirt well-pressed would not have replaced a good business plan either, but at least it would not have drawn attention. I wanted to ask him where he got his shirt but thought better of it.
“Your revenue projections seem optimistic, are you sure you’re being realistic?”
“This is a $25 billion industry…if we only capture 1% of this market, we’ll be hugely successful. We don’t think 1% is too difficult to attain.”
After a few more questions and breathless predictions, the meeting came to a close. The business cards went flying across the room in a perfunctory exchange.
On the way out, I turned to the “CEO” and said, “We’ll call you after performing some due diligence and we’ll go from there. By the way, nice shirt.”
“Great…thanks! I got it yesterday at Nordstrom.”
My associate consulted with me after the entrepreneurs boarded the elevators and safely made their way to the lobby, “Well, what do you think? Would you invest in this company?”
“Nah, I’m afraid I might lose my shirt on this deal.”
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