Pitching Your Idea to a Heavyweight
Q: I came up with an idea that I think a Yahoo! might be interested in, but I don't know how to go about getting their attention so I can pitch my idea to them.
A: Entrepreneurs often have ideas that would interest an already established company. There's no magic to contacting such a company, but there are dangers to consider. First, the easy stuff: getting access.
The simplest answer is to pick up the phone and call Yahoo!'s business development office. Find out how they accept pitches (you probably aren't the first), and submit your pitch accordingly. If you want to increase your chance for success, learn as much about Yahoo! as you can. Read their Web site. Scour their annual report. Read recent news articles. Know who they want as customers, how they appeal to those customers and what their goals are (New customers? Getting existing customers to pay more? etc.) When you make your pitch, show how your idea will help them reach their goals. If all you do is talk about how great your idea is, your speech will probably fall upon deaf ears.
A better way is contacting Yahoo! through personal contacts. Start asking your friends and associates if you know anyone who knows anyone who knows anyone who works for Yahoo! Even if it takes several introductions, personal contact makes it more likely your idea will get heard. But once you're at the meeting, you still need to understand how your idea fits Yahoo!'s goals. Functionality takes programmer time and money to develop, servers and bandwidth to run, and technicians to support. Before Yahoo! will take on the new service, they need a compelling reason why your idea is worth the trouble.
Once you have your contact, consider that there may be no way to protect your idea once you've presented it. In the early 1990s, I was the contact person at Intuit for anyone with an idea for a new product that would work with Quicken. Everyone always asked: will you sign a nondisclosure? And we always replied no. Why not? Because the company might already be considering the very same product idea that you want to propose. If they hear your idea and then release their product, you might sue them for stealing your idea. But they can't even tell you if they're already working on the same idea, for competitive reasons. So if you plan to present an idea to them, be prepared to do so completely at your own risk.
If you present your idea to Yahoo! without a nondisclosure, Yahoo! may or may not implement the idea. If they do implement it, they may implement it because you suggested it or because they were already working on it. If they actually took your suggestion but didn't tell you, they are obviously under no obligation to pay you anything. So you could be opening yourself up to substantial risk.
Yahoo! has purchased products before. For example, Yahoo! groups was the acquisition of the company eGroups.com. The eGroups founders created the Web site and gathered the user community of several hundred thousand (if not million) users. Yahoo! purchased the entire company because the concept was proven, and even if Yahoo! had it under development, eGroups already a user base Yahoo! wanted. So one strategy that would increase Yahoo!'s willingness to purchase you is to launch the service yourself, then sell the entire service as a business to Yahoo!
Whatever you decide, best of luck!
Stever Robbins is a venture coach, helping entrepreneurs and early-stage companies develop the attitudes, skills and capabilities needed to succeed. He brings to bear skills as an entrepreneur, teacher and technologist in helping others create successful ventures.
The opinions expressed in this column are those of the author, not of Entrepreneur.com. All answers are intended to be general in nature, without regard to specific geographical areas or circumstances, and should only be relied upon after consulting an appropriate expert, such as an attorney or accountant.