An excerpt from the book Made To Stick by Chip and Dan Heath
For an entrepreneur, having the chance to pitch a business idea to local venture capitalists is a big deal, like a budding actor getting an audition with an independent film director. But having a chance to pitch an idea to Kleiner Perkins–the most prestigious firm in Silicon Valley–is more like a private one-on-one audition with Steven Spielberg. You could walk out a star, or you could walk out having blown the biggest chance of your life.
And that’s why twenty-nine-year-old Jerry Kaplan was nervous as he stood in the Kleiner Perkins office in early 1987. His presentation would start in about thirty minutes. Kaplan was a former researcher at Stanford who had quit to work at Lotus in its early days. Lotus, with its bestselling Lotus 1-2-3 spreadsheet, became a stock market darling. Now Kaplan was ready for the next challenge. He had a vision for a smaller, more portable generation of personal computers.
He hung around outside the conference room as the previous entrepreneur finished his presentation. Watching the other entrepreneur, he felt underprepared. As he observed, his nervousness advanced toward panic. The other entrepreneur wore a dark pin-striped suit with a red power tie. Kaplan had on a sport jacket with an open-collared shirt. The other entrepreneur was projecting an impressive color graph onto the whiteboard. Kaplan was carrying a maroon portfolio with a blank pad of paper inside. This did not bode well.
Kaplan had thought that he was showing up for an informal “get to know you” session, but, standing there, he realized how naive he’d been. He had “no business plan, no slides, no charts, no financial projections, no prototypes.” Worst of all, the überprepared entrepreneur in the boardroom was facing a skeptical audience that now peppered him with tough questions.
When Kaplan’s turn arrived, one of the partners introduced him. Kaplan took a deep breath and started: “I believe that a new type of computer, more like a notebook than a typewriter, and operated by a pen rather than a keyboard, will serve the needs of professionals like ourselves when we are away from our desks. We will use them to take notes, send and receive messages through cellular telephone links; look up addresses, phone numbers, price lists, and inventories; do spreadsheet calculations; and fill out order forms.”
He covered the required technology, highlighting the major unknown: whether a machine could reliably recognize handwriting and convert it into commands. Kaplan recounts what happened next:
My audience seemed tense. I couldn’t tell whether they were annoyed by my lack of preparation or merely concentrating on what I was saying. . . . Thinking I had already blown it, and therefore had little to lose, I decided to risk some theatrics.
“If I were carrying a portable PC right now, you would sure as hell know it. You probably didn’t realize that I am holding a model of the future of computing right here in my hands.”
I tossed my maroon leather case in the air. It sailed to the center of the table where it landed with a loud clap.
“Gentlemen, here is a model of the next step in the computer revolution.”
For a moment, I thought this final act of drama might get me thrown out of the room. They were sitting in stunned silence, staring at my plain leather folder–which lay motionless on the table–as though it were suddenly going to come to life. Brook Byers, the youthful-looking but long-time partner in the firm, slowly reached out and touched the portfolio as if it were some sort of talisman. He asked the first question.
“Just how much information could you store in something like this?”
John Doerr [another partner] answered before I could respond. “It doesn’t matter. Memory chips are getting smaller and cheaper each year and the capacity will probably double for the same size and price annually.”
Someone else chimed in. “But bear in mind, John, that unless you translate the handwriting efficiently, it’s likely to take up a lot more room.” The speaker was Vinod Khosla, the founding CEO of Sun Microsystems, who helped the partnership evaluate technology deals.
Kaplan said that from that point on he hardly had to speak, as partners and associates traded questions and insights that fleshed out his proposal. Periodically, he said, someone would reach out to touch or examine his portfolio. “It had been magically transformed from a stationery- store accessory into a symbol of the future of technology.”
A few days later, Kaplan got a call from Kleiner Perkins. The partners had decided to back the idea. Their investment valued Kaplan’s nonexistent company at $4.5 million.
What transformed this meeting from a grill session–with an anxious entrepreneur in the hot seat–to a brainstorming session? The maroon portfolio. The portfolio presented a challenge to the boardroom participants–a way of focusing their thoughts and bringing their existing knowledge to bear. It changed their attitude from reactive and critical to active and creative.
The presence of the portfolio made it easier for the venture capitalists to brainstorm, in the same way that focusing on “white things in our refrigerator” made it easier for us to brainstorm. When they saw the size of the portfolio, it sparked certain questions: How much memory could you fit in that thing? Which PC components will shrink in the next few years, and which won’t? What new technology would have to be invented to make it feasible? This same process was sparked in Sony’s Japanese engineering team by the concept of a “pocketable radio.”
Concreteness creates a shared “turf” on which people can collaborate. Everybody in the room feels comfortable that they’re tackling the same challenge. Even experts–even the Kleiner Perkins venture capitalists, the rock stars of the technology world–benefit from concrete talk that puts them on common ground.
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Making ideas tangible and real is powerful. Helping our customers “see” is priceless. Making your ideas concrete ” magically transform a stationery- store accessory into a symbol of the future of technology.” This is what takes us from a mockup room to a brand new tower filled with beautiful patient rooms.
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This article is excerpted from the book Made to Stick: Why Some Ideas Survive and Others Die, written by Chip and Dan Heath. Chip Heath is the Thrive Foundation of Youth Professor of Organizational Behavior in the Graduate School of Business at Stanford University, and Dan Heath is a Senior Fellow at Duke University’s CASE Center, which supports social entrepreneurs. The Heath brothers’ new book, Switch: How to Change Things When Change Is Hard, was released in 2010 and debuted at #1 on The New York Times bestseller list. For free resources related to both books, see heathbrothers.com.
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