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[Also published on Yourstory.in]
Earlier this week, I was invited to mentor the GSF Accelerator’s startups on Pitching & Investors Decks. I thought I’d summarize what I said there.
I certainly don’t claim any special knowledge on what makes for a good first investor presentation. There have been many books and blogs written about this. However, I’ve seen hundreds of investors pitches over the past several years of coaching CEOs on IPO roadshows, raising capital as a founder and listening to pitches as an investor. Heck, I’ve even been involved with investing in the leading presentation sharing company - Slideshare - which has helped accelerate a trend toward storytelling in presentations.
The first meeting is not about getting investors to agree to invest (although perhaps it is when you are looking at angel/micro-VC funding). The key is to start to develop the relationship and get them excited enough and intrigued enough to want to dive in deeper in a subsequent meeting.
You can greatly improve the odds of having a productive first meeting by telling a compelling story in a concise and hard-hitting manner. Make it personal. Hit the main high points first to generate and assess interest. Then provide backup to your claims to cement the story.
Click here to see the 4 key slides (on Slideshare) that you need to nail.
After these four slides, stop and assess your audience by asking them what they think, their key concerns etc. You should then be adept enough to address these concerns as you continue with the familiar series of slides on traction, product overview/roadmap/differentation, market sizing, business model, go-to-market, financial projections and funding requirement & milestones. Finish by showing the Investment Highlights slide again and summarizing the key points. Leave this slide up while you go through any final Q&A with the investors.
Some other guidelines and pet peeves:
- The point of the slide should be the title of the slide e.g. don’t say “Team” as the title of the slide. Instead, say “Extensive Team Experience in Adtech” if you are doing an Adtech startup.
- The meeting is not about reading out the presentation, it’s about your conversation and engagement with the investors, with the presentation as support material.
- No more than 2 minutes per slide. I’ve seen 30 minutes spent just on the first slide where the whole pitch is given with that one slide.
- You should be able to run through the presentation by yourself in less than 30 minutes.
- Place yourself between the investors and the projected or laptop-based deck. Otherwise you’ll have the tennis match effect of spectators swiveling back and forth between the presentation deck and you.
- Don’t leave the meeting without asking investors: “What do you think?”, “What are your main concerns?”, “What did you like specifically?”
- Know what your investors have invested in or said about your space before you meet them. The Web is your friend.
- Please don’t take the slide deck I’ve embedded above as an example of the colors, fonts or layout that you should use.
[Also published on Startup Weekend Delhi]
Founders start companies for many reasons. They want to build something useful. They have identified a specific pain point in their personal or professional lives and the status quo causes them pain. They have analytically spotted a specific business opportunity. They are inventing something that is a leap forward in their industry or disruptive in general. Or perhaps, they see everybody else doing the same thing and want to jump on the bandwagon!
No matter how small or big the initial idea is at startup, the best founders step back and ask themselves what the high-impact success scenario is for them and what the purpose and vision of their project is.
Yet, why is it that, time after time, many founders fail to communicate this high-impact scenario and sense of purpose and vision? Time after time, the first words uttered by founders to the press or investors or recruits is what they did in the past month or the recent milestones that they have hit or the numerical goal they have in mind. I believe these things are necessary, but not sufficient, to drive a company to high-impact greatness.
Having been a founder myself, I know that the day-in and day-out focus on getting things actually done (considerably higher friction in India than in many other countries) is all-consuming (and appropriate). Yet I think it falls on the founders and management team to have a deep sense of purpose and vision and communicate that to the whole company, through words and through translation into what-does-it-mean-for-me for their team. And I believe this translates into better decision-making and execution through your startup.
My goal with this post is not to drive you to spend a bunch of time creating vague marketing-speak vision statements like “Invent” or “The best technology services provider in the world” or “The largest ___ in the country.” My goal is to drive you to think through your high-impact scenario and actively drive toward it with a vengeance.
So, consider the questions below early during the life of your startup and perhaps weave the answers into your execution as well as the (hopefully reality-based!) story you communicate to your stakeholders, whether they be the press or investors or recruits or regulators or others:
- What is the purpose of my startup and how does this connect to the impact I want to have?
- If my startup achieves its purpose and vision, how will my industry or people’s lives have been meaningfully impacted?
- How do I work backwards from this purpose and vision to instantiate a specific execution plan?
- Why is my team the best team to deliver on this vision? If not the best team, how do I build this purpose-focused team?
Here are some purpose/vision statements that resonated with me. And lest you think that these are just purposes dreamed up after the companies had succeeded, please think otherwise. These companies had this in mind from day one.
“Our mission is to connect the world’s professionals to make them more productive and successful… Our solutions are designed to enable professionals to achieve higher levels of performance and professional success and enable enterprises and professional organizations to find and connect with the world’s best talent.” ~ LinkedIn Annual Report
- Indian Energy Exchange (a Lightspeed portfolio company):
“We envision an India where the quality of life of the common citizen, rural or urban, is not compromised as a result of power shortages. We indeed envision a power-surplus India and a concomitant healthy competition in the electricity market for the ultimate benefit of the consumer, domestic and industrial… We will help accomplish the above vision by providing the nation with – and enhancing the utility of – our robust, scalable, and customizable electronic trading system with integrated solutions for trading, clearing, risk management, surveillance and counter-party trade guarantee.” ~ IEX website
“Several years ago, PayPal pioneered a new method of person-to-person transactions. Square takes this to a new level of personal accountability by enabling card present transactions with known payers. This is the next step in the cashless society.” ~ Jack Dorsey speaking
[Published in Pluggd.in]
Several of our portfolio company founders and I have recently been debating whether to launch a new product/company quickly (and sometimes prematurely) or instead take more time to launch with a ‘fully baked’ product. The most compelling reason FOR launching early is to expose the product to real customers and begin the cycle of learning (and sometimes also to establish a first-mover advantage if relevant and important). The principal reasons AGAINST launching early are that you deliver a half-baked or imperfect user experience and worse, you risk failing to meet basic user expectations.
Through discussions with other CEOs it became clear to me that many entrepreneurs struggle with different variations of the same question. For example, while we’ve been debating this trade-off in the context of when we should launch a new company and how ‘perfect’ the product should be, other entrepreneurs whose companies are already in market wonder whether they should begin to scale-up aggressively or first invest in their infrastructure (provided they have validated product-market fit).
Clearly there is no generic answer to this question as many factors play a role – the nature of the business, competitive dynamics, user expectations, regulatory requirements etc. For example, Indian Energy Exchange (IEX), a Lightspeed portfolio company, operates a national, electronic market for power. The company’s platform is used by state utilities and industrial buyers to buy and sell power as well as ensure payment integrity and schedule power delivery. Given the company’s mission critical role in the power market, it is essential to launch with a pressure-tested product that works flawlessly at scale. However for many consumer internet or mobile companies that do not serve such mission critical use-cases, there is a strong argument to launch early with a minimum viable product and begin the learning cycle as soon as possible. The key question we’ve been debating is how early?
My current thinking is that entrepreneurs must focus on getting to market quickly with a lean or light-weight version of the product (note that this is different from an incomplete or half-baked product), PROVIDED that:
- The product supports the core customer use case,
- The company has a level of technical and organizational readiness that will enable them to iterate, innovate and improve the product post-launch rather than engage in months of fire-fighting because the product or service was launched prematurely and fails to meet basic customer expectations, and
- The company is ready to track user behavior, engagement, funnel metrics, cohorts etc so that iteration and improvement can be done in a data-driven manner – and the insight gained from an early launch can be actioned
Note that this does not require the product to be perfect or ‘complete’ but it does require that the limited set of features and functionality work well and support the core use case. For example, an online retail company need not have full product selection, support every payment method or offer a full feature-set on day 1, but it should offer a frictionless user experience and be able to accurately ship an order to a customer within a reasonable time frame. If the company has made appropriate investments in its organizational and technical infrastructure, it will be able to layer on additional products, functionality etc on a continuous basis post-launch and will be in a position to accelerate growth going forward. Flipkart is a great example of a company that did this the right way – by focusing on getting the user experience right and establishing product-market fit before aggressively investing in marketing to scale rapidly.
Conversely, a company that launches prematurely, simply to get to market quickly, runs the risk of demonstrating early success, only to have to pull back later in order to fix a long list of ‘bugs’. This can lead to unsatisfied customers, demotivated employees and a compromised competitive position. Worse, this type of company wont be in a position to run experiments, learn from its customers and make rapid product improvements.
Companies with purely ‘virtual’ business models such as social gaming or music streaming can launch even more quickly with very lightweight minimum viable products to help establish product-market fit. Once they see positive signs around traction, usage and engagement, they must prepare to handle scale prior to ramping usage. After all, what would have happened to a company like Instagram if the system buckled under the tremendous growth?