Every day new ideas and new businesses pop up with new funding coming in. And each time we see the media praise or tear down some tech “unicorn.” When this happens I think to myself two things. One. Are we in a bubble? Two. Is the media’s baseline correct?
I’ve been bringing these questions up for the past 2 years in conversations to see what the outside consensus is, and the bubble discussion has been going on a lot longer than that. The thing is, it’s hard to sustain a true bubble for over 4 years. We definitely are also not in a normal valuation environment for high growth tech companies and we have not been in one for a while. The hit to the market over the past 6 months proves that.
So here’s how I have been answering these questions.
Any smart negotiator knows that people respond to baselines. If you tell me that your product is for sale for $190 a month, I’m unlikely to offer you $40. Your offering price is the baseline for the negotiation.
The thing is, we do this outside of negotiation as well, whenever we ask for or seek to gain an accurate and deep intuitive understanding of something.
If someone says, “can you review this pitch deck?” there are a bunch of baselines already built in. Baseline 1. There is a pitch to be made. Baseline 2. There are twelve slides in this pitch. Baseline 3. The slides have content.
Before we can even have a conversation about whether or not there should even be a pitch, or whether the content we have is worth presenting, we’re already at a baseline talking about pitches, slides and content. The right feedback may be: Do a presentation, but no slides. It may be: Use 36 slides, or even: let’s do a presentation a way it’s never been done before. But these things rarely come up because the entire discussion was based off a certain baseline from the start.
Great coworkers, great leaders, great friends–they’re generous enough and bold enough to take a step back from the baseline in conversations and get to the original why at the beginning of a string of decisions.
They help you understand that once in a while you have to start with zero, with nothing, instead of with what might be the standard baseline right now. So let’s take our knowledge of baselines and apply them to bubbles.
I’ve learned that in the media world there is an established baseline that the media has control to impose straight out of the gates. They throw their stake in the ground and establish a baseline that the world can’t argue easily with. To come straight out and fight against the baseline can be seen as childish. Or it makes you look guilty of the negative light the baseline may be putting you in or your industry.
So when it comes to bubbles the media has their baseline they are establishing and building off of.
- IPO’s are the holy grail.
- IPO’s are no longer popular.
- Unicorn’s are sprouting up all over the place.
- All the unicorns have been named.
- This isn’t a bubble.
- The bubble is popping.
Be bold enough to take a step back from the baseline and get at the real raw data, the truth, and the why of what you are doing. Don’t let others determine your baseline. Define it yourself. Rome wasn’t built in a day and the same goes for your company, your vision, and your future.