Below are three analogies on how to prepare and pitch your startup better.
TLDR: Don’t focus on being right. Don’t rush the sale. Find believers.
I recently got my startup funded. It was an extremely, extremely challenging exercise. Today’s post is short; I’ll save the funding journey for another time. Today, I wanted to talk about pitching. I’m going to focus on three big, often overlooked issues.
1. Friend-speak: “That’s an awesome idea!” => “Good luck, bro.”
Friends tell you what’s wrong with your idea, but they often say it nicely. Listen to your friends carefully, and recognize that “That’s a cool idea, but what about blah-blah?” is a veiled criticism of your idea. Listen and understand their concerns. A good pitch patches up these holes before they’re even asked. Often, when an idea is criticized, it’s natural to want to be defensive. It’s important to take criticism as something to solve for, not something to “be right” about. Ok here’s the analogy:
You’re a pirate. You’re practice fighting with your buddy pirates when they accidentally shoot a hole through your hull. But you’re smart so you win the argument with them that there is in fact NOT a hole there (Uhhhh). You decide to go out and challenge some Brits to a battle to the death without first addressing the damage your buddies left on your idea — er, I mean — ship. Oops!
2. You need more time to sell
I haven’t pitched that many people specifically to get money (a lot of pitches were over partnerships), but when I felt rushed there wasn’t a second meeting. When you are trying to convince somebody to give you — a nobody — enough money to buy a few cars (or a house), they need time to digest things. Here’s the analogy:
Your startup is like a restaurant. First you lure in a customer to try out your food. Once inside, you serve your customer what they are going to eat. It’s a game changing meal, so they’re naturally skeptical. They start to nibble on it. Maybe it’s good. Maybe it’s not. But you’re in a hurry so you jam the food down their throat, ask for money, and remind them to leave a good review on Yelp. They throw up and get major indigestion.
Like with any good meal, make sure you have a full hour to pitch. Your pitch should be 30 minutes max. Leave 30 minutes for questions (which will be sprinkled throughout your presentation).
3. The Crazy Idea Train needs passengers
You’re the conductor of the Crazy Idea Train. You built it, actually. It’s a little rocky, but it’s speeding along! But there’s no passengers. Your friends say they’ll get on the train later. Strangers say you need to pay them money for them to get on board (it looks really ghetto and unstable, after all). And nobody really knows where it’s headed. Maybe it’s going to Billion Dollar Land; maybe its going to Unemployment Mountain. You think it’s the former. But it looks like most people believe it’s the latter.
I’ve thought about this a lot, and I’ve decided that this is actually super duper important not just from an investor’s point of view, but from a founder’s point of view. If you can’t convince one person to join your Crazy Idea Train, then is it really a good idea? Finding a co-founder is social validation that your Crazy Idea has legs. Without this, investors are left to imagine the worst.
I’ve also heard cases of people unsuccessfully looking for co-founders. Again, this to me is a sign of a crappy idea or worse. There’s a lot of reasons why somebody would be unable to find a co-founder, and most of them are bad signs. Are you arrogant and un-friendly? Do you seem untrustworthy? Do others have no confidence in your ability? Are you a terrible leader? Are you all talk? Are you no fun to be around? Do you kill kittens for entertainment? Maybe. Maybe not.
Your number one job as a founder is to sell the company to future investors, acquirers, and employees. If you suck at this, that’s a death sentence. Start with selling to a co-founder.
Summing it up
Don’t focus on being right. Don’t rush the sale. Find believers.
Bonus pro-tip: make sure your lawyer doesn’t put your cell phone number in the SEC filings. Yeah, that happened.