In my earlier post, I briefly introduced the concept of The Missing Slide in an entrepreneur’s pitch for a new venture.
The notion of The Missing Slide comes from a simple fact:
All technology entrepreneurs are seeking to disrupt something. Many do not take into consideration the resulting human toll.
There is a human toll associated with every major technology disruption, which can transform an industry like a Category 5 hurricane, leaving hundreds of thousands of people adversely impacted in its wake.
Uber’s plans to automate commercial trucking can potentially eliminate 3.5 million jobs of truck drivers in America alone. Millions more will be impacted in ancillary industries, like food and lodging along the country’s interstate roadways. What are Uber’s plans to mitigate this impending human catastrophe? What has Uber done, or planning to do, to help drivers in the transportation industry who are already adversely impacted by its $62 billion ride-hailing service?
What has Amazon done, or planning to do, to help retail industry workers that it has displaced over the years, and continues to do so at an increasing rate every year? Sports Authority, once America’s largest sporting goods retailer, is the latest casualty in the face of growing e-commerce, and will eliminate 14,500 jobs when it shuts down.
What has AirBnB done, or planning to do, to help displaced workers in the hospitality industry that are adversely impacted by its $25 billion house-sharing service?
Let me quote two prominent people from President-Elect Donald Trump’s camp.
Peter Thiel, the technology billionaire and Silicon Valley’s most prominent Trump supporter suggested this in his recent speech at the National Press Club:
"Silicon Valley is not doing much to improve the welfare of people who are not in Silicon Valley."
Steve Bannon, Trump’s Chief Strategist, in his post-election interview with The Hollywood Reporter:
“The globalists gutted the American working class and created a middle class in Asia.”
Disrupters Taking Care of the Disrupted
The idea of disrupters taking care of the disrupted is at the heart of sustainable capitalism. Long-term thinking behind every commercial activity, which ensures lasting good health for all stakeholders, is the only sustainable approach that will ensure the survival of capitalism.
The explosive growth of the technology industry over the last twenty years is extraordinary, to say the least. It is now one of the dominant global industries. Today, five of the Top 10 most valuable global companies on the Fortune 500 list are technology companies. Three of them did not even exist twenty years ago.
Credit goes to die-hard entrepreneurs, an inspiring breed of workers who do not accept the status quo in their pursuit to drive a better future driven by technology. Launching and growing a new business is probably the hardest career challenge. Failure rate of startups is 90%. Of the surviving 10%, only a tiny fraction end up being ‘Disrupters’ — in other words, become big enough to fundamentally disrupt their target industry. While getting rich is a key motivator for most entrepreneurs, I do believe many do want to make the world a better place. However, they end up losing this broader plot by the time they reach the finish line.
Early Stage: Focus on becoming the Disrupter
The process of technology entrepreneurship makes it hard to focus and commit resources on taking care of the disrupted. Startups, once born, are in a grueling survival battle on a daily basis, especially during their early stages. There is no time to think of anything other than building the product, acquiring market traction, attracting the right talent, and securing funding to support all of it. So, during early stage, committing resources on the disrupted may be pointless. Instead, it is wise for entrepreneurs and their investors to focus on building and scaling the business. Entrepreneurs should aim to become the Disrupter.
Only Disrupters have the luxury, the responsibility, and the good fortune to care about the Disrupted.
I say ‘good fortune’ because it provides them a real opportunity to ‘make the world a better place’ — the mantra of Silicon Valley. With a slight modification: ‘make the world a better place for all.’ Disrupters are privileged to be in a position to do just that — use profits from their disruptive venture to lift those who get adversely impacted by their business, and somehow make them also participate in the better world the Disrupter has worked so hard to create.
Add The Missing Slide at the Outset
While actual resource commitment to take care of the disrupted would come only when the entrepreneur has graduated to being a Disrupter, the thought should start at the outset when the business is first being conceived. I believe it will also provide a more compelling vision to the entrepreneurial journey ready-to-be-launched.
Entrepreneurs need to add a new slide — The Missing Slide — in their pitch decks that they create to sell their new venture idea to investors and potential business partners and team members. The slide should talk about how the business, once successful, will meet its obligation to take care of those who will be adversely impacted by that very success. It is a simple concept. However, it’s rarely seen. As a startup advisor, I see hundreds of startup business pithes every month. Less than, say, one percent, mention anything about the disrupted.
The foundational ethics and culture of a new business is created by its early employees, driven by the founding team. If the founding team does not think about the disrupted at the outset, any real progress when the business is successful later on will be unlikely.
Sell The Missing Slide to all Stakeholders
The entrepreneur needs to sell The Missing Slide to every stakeholder — employees, business partners and investors — that will guarantee the success of the business.
Convincing employees and business partners should not be hard. Doing the right thing, and cultivating a sense of broader purpose, is proven to be the best motivator for employees. And, all businesses partners value purpose-driven, ethical businesses to work with.
The challenge would be convincing investors. They provide entrepreneurs financing necessary to survive and grow the business, and are part owners in the business. Investors also have to think about the interests of their limited partners, who provide them capital to invest in startups at the first place. We therefore don’t want investors to view entrepreneur’s focus on the disrupted as an unnecessary distraction.
While securing financing, the entrepreneur needs to sell The Missing Slide to investors at each stage in the same manner as he/she sells investors the commercial merits of the business.
Long-term thinking is the core principle behind the idea of The Missing Slide. Every entrepreneur wants to build a surviving business for the long term. Every venture capitalist claims to be a ‘long-term partner to the entrepreneur.’ Majority of limited partners for venture capital are institutional investors including pension funds and endowments who are focused on long-term financial returns. On paper, at least, incentives of entrepreneurs, investors and limited partners are fundamentally aligned.
Key is what entrepreneurs want to prioritize and what kind of change they want to bring through their new ventures.
If Silicon Valley wants to silence its critics and be the global beacon in making the world a better place for everyone, not just for Silicon Valley, its entrepreneurs can start by adding The Missing Slide in every pitch for a new business.