There is one thing that you teach yourself never to do in the VC business. Never ever think that an idea will never ever work. Many many VC’s say “Strong opinions loosely held” is their mantra. However, VC’s are human. When you see pitch after pitch after pitch, you can get cynical if you don’t pinch yourself. Sometimes after seeing an idea that feels like a retread of pitches you have seen in the past, it’s best to take a step back and try to figure out why it would work this time.
If you are consistently cynical, you are liable to miss the big one.
However, there are some ideas that come up constantly. They are in just slightly different forms, but almost monthly and for sure quarterly, someone will tell you about their idea to do blank for blank. Maybe it’s got a new twist that is on point with the current themes of the day (Bitcoin!). But, sure as the sun comes up that idea never dies and you see it presented by various people from various backgrounds.
I am not going to say ideas like this will not work. The difference between making them work and failure is the team behind the idea. There has to be something really, really unique about it that creates gigantic network effects quickly. The team behind it has to be able to execute flawlessly. The team has to have that special something that very few entrepreneurs actually have.
This is why it’s important to socialize an idea at an early stage. Hopefully, the person on the listening end gives you clear feedback. I think a lot of times people don’t want look like they are blocking someone from doing something. But, entrepreneurship is about overcoming those hurdles. Some are artificial, some are real.
If you are a mentor or run a university program where entrepreneurs are getting their start and hear an idea that you’ve heard a thousand times before tell the entrepreneur that. Say, “You aren’t the first person to have this idea. In my role I see it quite often with every new cadre of students. It sure is a compelling problem that you are trying to solve and it would be valuable if you were to solve it. But, I want to be clear that thousands have tried to do your exact same business and failed. I am not saying you can’t, but it will be significantly more challenging than another entrepreneurial business.” If you provide feedback like this it’s realistic, clear-eyed and helpful, not cruel.