When I’m being pitched a new business I ask this question. I also prepare a response to this question when I’m pitching for investment or partnership.
The reason I prepare for this question is that the consumer internet has been around for more than 20 years, some would argue longer. There is a high probability that the idea or business model has been thought of, patented or tried somewhere in the past
. It might not have been successful but that’s not the point.
Founders stand to learn an enormous amount from those who walked before them. They also stand to benefit from demonstrating their curiosity and showing how open they are to de-risking their business using lessons from the past.
But perhaps the most important benefit is that the founder reduces the chance of being blindsided, now or in the future.
Instead of being asked halfway through a pitch about a company that shares similar characteristics, which a prospective investor or customers know about, the founder can engage in a considered conversation instead of looking sheepish and underprepared.
And just to be clear, when I talk about history, I’m not talking about competition or how to determine if a market is crowded. Other slides in a pitch deck will tell me that. I’m looking for a slide with four bullet points per company whose history has a significant bearing on your business, like this:
- One line company description
- When it existed
- Why it failed (if it did)
- Key learning(s)
By way of example, Theranos features in my pitch deck on the Business Model History slide.