For whatever reason, this week the workshops focused largely on enterprise-oriented companies, and the Founder Stories happened to come from two people involved with an enterprise-focused company. From a general standpoint, this week has been about growth. Companies are spending a lot of time working out their strategy for the next 6-12 months, and which direction they will head after Techstars.Read More
Phil Libin has been tweeting VC pitch tips that are pure gold the last few months, and given we're coming up to Demo Day here at Techstars Boston (May 25, you're invited!), it seemed a particularly good time to highlight some of the best. This post is modeled on one from Stelios Constantinides called Paul Graham's Startup Advice for the Lazy, and curated with a Demo Day presentation in mind.
Demo Day VC Pitch Tips:
- Why this? Why you? Why now?
- Label your axes.
- When you're practicing the presentation in your head and you think you might apologize for some part of it, fix it instead.
- Put aside financial interest and describe what the world looks like if your startup is successful. Make us want to live there.
- Use your company name and logo intentionally and only when you want to have an impact. Don't waste them on your slide masters.
- It's ok to be nervous and awkward. We're looking for authenticity, originality, energy, infatuation and mastery; not polish.
- You won't get credit for hedging your bets; that's why we have portfolios. Build your startup around a sharp point of view.
- Don't read your slides.
- Even if this is the hundredth time, try to remember what you felt like the first time you pitched this idea. Do it like that.
- Humility > bragging > false humility.
- Clouds of random logos; whether customers, competitors, partners or previous experience; are not effective slides. Rethink.
- Try this: delete all logos, clip art and bullets from your deck. What's left is what VCs actually remember. Is it good enough?
- Retention better than growth as early predictor of startup success because it's less effected by hype. Engagement is 2nd best.
- Finish early.
- Bullet points often mask incoherent trains of thought. Rewrite as complete sentences t see where you're fooling yourself.
- Don't rely on partnerships to reach your early adopters. Maybe a good way to scale, but a bad way to start. Do it yourself.
- Try not to violate more than one long-established, conventional wisdom, unquestioned truth at a time. Or less than one.
- Unless you really, really know what you're doing, please stay away from the font menu.
- Speak at your normal pace. If you find yourself struggling to get through the deck on time, cut slides. Better than rushing.
- These are words you don't need to use anymore: "SaaS", "Cloud", "Mobile". "Blockchain" is borderline.
- It's really weird to add up the years of experience of each member of your startup team and present it as a single number.
- If you get knocked off your script, don't rush to get back to the slides; good opportunity to show you really know the problem.
- Be rigorously optimistic: Believe that the world will get better. Know that it’s your job to improve it. Have a plan to do so.
- This should go without saying, but please don't trash talk your customers... You know what? Go ahead. Makes my job easier.
- Hide the bullet marks from a slide. Look stupid? You wrote some jargo-gibberish and the dots were tricking your brain. Rewrite.
- Quick bursts from external events, like an AppStore promo, are great, but evidence of sustained growth is much more persuasive.
- Great products aren't neutral. They have a strong point of view inextricably tied to every design decision.
- Make sure your CAC ain't whack, yo.
- Eschew industry jargon, even when everyone else babbles it. It doesn't show mastery and it makes you blend in, not stand out.
- Anonymous customer testimonials feel dishonest. Ask for permission to use real names or omit.
- Products that help people do something good are generally more interesting than ones that try to prevent something bad.
- You don't have to open with a joke.
- When measuring retention, try to eliminate early noise. Something like: what % of week 2 users are still active in week 4?
- For just about any metric, an improving trend is more interesting, and predictive of long term success, than a single point.
- Every slide you show dilutes the impact of every other slide. Keep this in mind when deciding what to include in your deck.
- If you're going to list advisors on your team slide, be prepared to talk about what advice they're giving you.
- The world probably doesn't need more ads. Smarter, better, fewer: sure.
- Design your deck with the right empathy point: optimize for the experience of the audience, not the comfort of the presenter.
- Don't fetishize "disruption"; it's a side-effect of successful innovation, not the goal. Focus on creating big new value.
- Don't worry about raising too much; you won't regret more cash in the bank, even with dilution. Worry about spending too much.
This week at Techstars finally marked the end of Mentor Madness (hence the Mentor Madness hangover), and it was a relief for many teams. I don't think I've seen the office quieter, or more productive, than Monday, the first day without scheduled mentor meetings. That said, teams continue to meet with mentors they liked, some often for their fourth or fifth meetings. The Founder Stories and Workshops this week provided some brilliant content, which you can read about below.
Techstars Sponsor Visits
Though the formal Mentor Madness period ended, sponsors began sending their startup teams, and the personnel on these teams also fit the mentor role. Many have backgrounds in either starting companies or funding them via venture capital, and their experience shows.
While sometimes visiting with sponsors is optional, I've personally seen it be extremely valuable for more than one team over the past several weeks, and I would recommend always visiting with sponsors if given the chance.
The reason: some will be non-technical while others will be technical, meaning you can send different people, and typically only one or two sponsors visit at a time, meaning that you will likely only have half an hour of your day occupied. Based on the opportunities and connections many can offer (think customer introductions, hugely valuable perks, investor introductions), the potential for return is high for the time committed.
This week, in addition to the usual Founder Stories from within Techstars, we had a special guest courtesy of a sponsor, from a local startup.
While the industry wasn't one I was generally familiar with, there were some great takeaways:
- As a founder, you have to make progress every day.
- Raising a seed round is based on any one of three things: product, team and traction.
- Traction has a wide scope - things like customer interviews count.
- Seed fundraising mistakes: talking to big VC firms.
- Instead, talk to large angels.
- To get your valuation for your seed round, talk to people who have done similar size seed rounds recently.
- Getting investment from people you actually like should be a high priority - if investor meetings go badly, think about whether it's because of the person.
- Set personal meetings (like lunch) with investors to first check the fit, and make that one of the early interactions before you approach fundraising with that person.
Our own Founder Stories tend to be more personal, and this week was no exception. We had two very different perspectives and styles of stories, so I've broken the lessons from each in two:
From the first:
- Most obstacles just really aren't that big; whether it's moving countries, changing locations because of someone you love, or someone you've lost, it's all possible.
- The corollary to the above is that most obstacles we see are self-imposed. The barrier to accomplishing something is often within ourselves and the perceived obstacles, rather than reality.
- Businesses that are a result of your past, and/or tied strongly to your own life, are often the most powerful.
- The corollary here is that when telling the story of your business, it is much easier to make an emotional connection when the story is your own.
- Your story can be a recruiting tool. If you've experienced it, others likely have to; who are these people and how do you find them?
From the second:
- Switching study or career paths isn't something you should be afraid of.
- When thinking about which areas interest you, consider your interests outside of formal study - how can they be tied to formal studies or careers?
- Getting funded by your parents, living at home, and doing whatever you can to make your business succeed, is okay (personally, this resonated a lot for me).
- Great products take a long time to develop.
- The path to product/market fit is often a long one.
- Cofounder relationships are precious, and like real relationships, can be ugly when they finish; make sure to think and proceed carefully when considering who you found with.
This workshop forever changed the way I will conduct hiring.
- Gut instinct is only good for those who you shouldn't hire.
- The best predictor for success is previous behavior, NOT previous experience.
- "The average hard & productivity costs of a bad hire is 15x base salary" - Who, Geoff Smart & Randy Street
- You need a scorecard for hiring based on three things: behaviors, competencies, and outcomes. Hire for what you want the person to accomplish in THIS job, at THIS time.
- For behaviors, always ask "Tell me about a time in your career when you _____".
- Six behavioral essentials: grit, rigor, impact, teamwork, ownership, curiosity, polish.
- Competencies: technical, cultural.
- Outcomes: 3-8 specific examples of what a person must get done.
- CEOs: you are full-time recruiters. You should always be asking other people who they think is talented, and start relationships with these people.
- Selection process: filter [resumes], screen [with a call], interview [with multiple teams, for several hours], decide, reference.
- Use TORQ (Threat of a Reference Check) in questions (ie. "When I ask your old boss about ___, what would they say about ____").
- Look for STAR answers (Situation or Task, Action taken, Result).
- You should be listening more than talking during most of the interview (the end is for selling your company).
- A key interview might take 90+ minutes; make use of the scale and grade people.
- You should have multiple interview teams; only ask references once you've decided to hire.
- As usual: hire slow, fire fast.
Again, this was a transformative workshop; everyone here will probably hire like this for the rest of their careers.
Exploring Cofounder Conflict & Being Fierce
While this didn't provide the crazy mind shift that the first workshop did, it explored some issues that often aren't in entrepreneurship, mostly on the topic of emotional stability and overall happiness. The following were the main points for me:
- In general, make an effort to ask your cofounder(s) and coworkers "How are you?" and truly listen to the answer. Schedule a meeting if necessary. You should be looking to find out where they are in their personal and work life. Use a red/yellow/green scale if need be, and it's up to the person whether they elaborate.
- If you have an issue, use ONFR: Observation, Feeling, Need, Request:
- O: I noticed _______.
- F: That makes me feel ______.
- N: We need to agree on ______.
- R: Next time please ______.
- Try and get your whole team asking themselves the following, as they relate to both their work and personal lives:
- What are you not saying that needs to be said?
- What are you not hearing that's being said?
- What are you saying that's not being heard?
Emotional and overall stability is key for a person or team to function long-term. There is often a particularly masochistic culture in entrepreneurship as it relates to work-life balance, or whatever you like to call it. Regardless of the balance, make sure you know where both you and your team are on these issues.
The focus this week is definitely shifting. Despite still being busy with sponsor visits and events, there has clearly been a move back towards fast progress, and it will be fun to watch (and participate in) over the next few weeks. This also marked the end of the first half of the program. I expect the second half to be much different, though no less interesting.
This was the last week of Mentor Madness at Techstars Boston, and for the most part, everyone was breathing a sigh of relief. Usually investors are the last ones to participate, so despite being near the end, you still have to on your game. That also meant that Workshops began; Workshops are often lead by mentors on topics in their area of expertise, and generally follow the focus of the program: Build Team, Build Product, Growth.
This week we had two:
- Customer Interviewing: this was a detailed presentation of how to set up customer interviews, the right questions to ask, and the questions to avoid, with an example interview done in the middle. Super useful.
- The Power of the Network: a summary of how to leverage the Techstars network, and the associated tools, which include LinkedIn. Again, super useful, and Techstars does a great job of utilizing their network in general. While the opinions I've received on the topic are obviously biased, many would argue it's the most valuable network for entrepreneurs globally.
So, we'll start with those.
I think this is probably one of the most overlooked skills in the entire of entrepreneurship. Not only can customer interviews help chart your product development, sales strategy, and basically every consumer-related aspect of your business, but this is where you can find out if your startup idea is worth something in the first place.
The key takeaways:
- Surveys can serve as validation tools, and that's about it.
- Be as vague as possible to start - don't tell them what industry you're in, even remotely what your startup does.
- Good interviewing is good listening - you want them to tell stories.
- Stay away from 'shallow' (yes/no) questions.
- Avoid "have you ever had ____ problem".
- Always go for more "tell me about the challenges you've had with _____" (ex. note-taking).
- Interviews should be conducted with two people, one who is clearly in charge and one who is taking notes - can enter conversation occasionally by asking "do you mind if I ask a question?".
- You always want to dig deeper and get the stories; good follow-up questions include things like "why?" and "how often does this happen?".
- Wait for the other person to speak and elaborate themselves - using silence is important.
- Get people to demonstrate their stories and experiences if possible - you can then ask questions based on the demonstration.
- Approach interview as "how can I disprove my core assumptions?" - don't be married to your value proposition.
- Try and find the current way this person is solving your problem.
- Can source interview people from Craigslist, Taskrabbit - you should be getting valuable information after 2 or 3 if you're doing it right, and you shouldn't have a problem filling more than 45 minutes.
Power of the Network - Techstars & Otherwise
While some of this workshop spoke about how to best leverage the Techstars network specifically, there was a lot to be gained from the LinkedIn and general networking advice:
- Spend 10 minutes every day responding to points of contact (on LinkedIn) - congratulate people on new jobs, introduce them to someone you know in their new city, comment on their post, etc. (Go to My Network > Connections to see updates).
- Publish blog posts on LinkedIn - particularly if you post elsewhere too; it's a great way to show off your skills to people, and to dictate your own specialties and positioning.
- Little-used feature - you can keep notes that are private to you on first-level connections - just look at their profile and you'll see the option below their header.
- Use Conspire to get introductions. Look for lowest number of people in pathway, not necessarily strongest.
- Go to My Network > Connections > Settings to integrate with other services.
- University affiliation is a great way to turn a conversation from cold to warm, and is underutilized; check out the Advanced Search in detail.
- Use My Network > Find Alumni to source talent, or VCs/investors.
- Search former employees of a certain company to get intelligence and background information.
- Look at who has viewed your profile - if you don't have the right people viewing it, change your profile.
- Use your skill endorsements as a gauge for how other people view your skill set and expertise.
- Look at who is the most-viewed in your network - they have the highest social influence and capital; utilize this.
I won't say much about the Founder Stories this week, since they were so personal and emotional. That being said, they did really drive home a few key points for me:
- There is more to life than startups, or career success, or pretty much anything except family and loved ones. Never lose perspective.
- Desperation is a great motivator; use it as a tool (and by this, I mean implement it artificially whenever possible).
- The arguments against immigrants in any country are stupid. From an economic standpoint, they create disproportionate value. Aside from that, see point 1 - these are all people seeking the same things as you are.
- Obstacles are just that - obstacles. And yours are probably much less daunting than many that many, many, other people have faced and overcome. In other words, if you think your life is hard, it probably isn't.
- People are amazingly resilient.
I'll use the opportunity to point back to one of my favorite articles from Paul Graham, titled Life Is Short.
The end of Mentor Madness is a net positive for me, and I'll probably dedicate a separate post or two to the whole process. In the meantime, you can refer to Deb McGargle's post about it.
Founder Institute Experience
I think the first time I went to a Founder Institute (FI) information session was in the spring of 2014. I had just started a company with a friend from McGill, and we had gotten as far as competing in a couple of pitch competitions and creating a business plan. Founder Institute sounded interesting, but, to be honest, it wasn’t going to fit my schedule. I’d already made plans to go back home for the summer and work with the Coast Guard for the fourth summer in a row. But, my cofounder applied, and I helped him a bit with the application process. He didn’t get in.
That was about the last I had heard of it, until the fall came around, when I had made the decision not to attend graduate school, and instead pursue the venture we had started in January. I was back in Montreal, and attending just about every networking event I could, one of which was a Founder Institute informal drinks meetup, where there would be some previous founders and the program directors.
I decided to apply, and got my application in nice and early, including the optional short video.
Fast forward a couple months, and I’d also applied to The Next 36, a summer entrepreneurial program in Toronto targeted specifically at undergraduates. I’d been selected to attend Selection Weekend, for the second time (I wasn’t selected the first year). I spent quite a bit of time during December and January networking with others going to Selection Weekend. Sometime in mid-January, I received notification that I’d been accepted to Founder Institute. It was nice, but I didn’t think much about it at the time.
Well, the outcome of Selection Weekend for The Next 36 (at the end of January) was about the same as the year before – a great weekend, and great people - but I wasn’t one of the ones selected. So Founder Institute it was.
Until that point, I hadn’t really researched Founder Institute a whole lot – I did this during the few weeks leading up to the program start instead, and I began to be more and more intrigued. The program is targeted at professionals who have work experience; it now has chapters in over 40 cities worldwide; the attrition rate is around 60-80%. As we got closer to the start date, it was revealed that this cohort of the Founder Institute had received the most applications of any cohort, worldwide, ever. Things were getting interesting.
After being read the riot act by the program’s director, Sergio Escobar, on the first night, I wrote down my goals for the program, as I do with most things, professionally or personally.
They were as follows:
impress mentors with work ethic
be one of few to make it through program
establish relationship with some top entrepreneurs
gain network that could lead to jobs with their startups or others
jump start new business
gain network of potential co-founders
All pretty reasonable I think. I thought that this would be a quick jump into the entrepreneurial scene in Montreal, and perhaps address one of the biggest problems I was facing as a young, new, entrepreneur – finding good cofounders. I was also seeking some structure, after spending four or five months living in Montreal making completely my own schedule, and doing the things I thought best to move the company forward, without any real experience.
As it turns out, the Founder Institute was all that and more, and if I sat down now to consider the goals I should have set at the beginning of the program, they would be much different. More on that later.
My first few business ventures, have been, without a doubt, failures. I was going to say ‘complete failure’, but if that’s the view you have on any failure, then it actually was a waste of time – mine certainly haven’t been.
The attrition rate for Founder Institute is usually mentioned at being somewhere around 60-80%. I know for our cohort, we started with over 50, and we are now down to 14. So it’s not an exaggeration.
So why do so many people fail to reach the end of the program?
The first reason: it’s hard.
Some assignments seem initially impossible, unreasonable, foolish even. A large number of dropouts will rationalize dropping out because of them, saying things like “well, this isn’t the best thing for my business right now”, or “I should be spending my time on other aspects of the business”. The analogous situation for me growing up was the guy on every sports team I ever played on that always seemed to have an injury – he couldn’t play that day because of a hip flexor, the next because of a knee tweak, and he didn’t want to make it worse; you really knew that he was just looking for a rationalization not to face something tough.
The solution: find a way to get things done, no matter what, and be conscious of rationalizing your decision to get out.
The second reason: life gets in the way.
I hated to see some of the founders in this cohort drop out. They were great people, with great ideas and the skills to execute them. I probably would have invested in their company (if I had the money, or the time to follow up). But the Founder Institute is not a part-time commitment. I think they bill it as a 30-hour-per-week commitment; that’s just not true. If you have a full-time job, expect to work less on that than on your Founder Institute work. If you have kids, prepare and plan to schedule time with them, likewise for a spouse or girlfriend.
Out of 14 founders about to graduate the program, only a few still have full-time jobs, and of those, I don’t think any have a family, and most, as far as I know, are single.
Solution: if you want to finish Founder Institute, you had better be ready to commit full-time to your company, and the program, before the end. The old “quick, cheap, fast: pick two” cliché could be applied here in a new form: “FI, family/social life, full-time job: pick two”.
The third reason: your idea isn’t good.
This is probably the most difficult obstacle to overcome. In theory, you should be able to figure this out in the first few weeks – the program is set up so that you actually start with three ideas, and through talking to potential customers you figure out which one is interesting. But what happens if none of them are interesting? Then you’re behind. And you have to come up with new ideas, and complete the customer validation again, and still keep up with the assignments, and then re-do the assignments once you find a new idea, and then finish the special assignment you got because you’re behind, and…you get the point. Once you get behind in the program, it’s a struggle to get back in front. The upside of this happening? You’ll be able to re-enroll in the program next time, and until then, you’ll have a ton of time to think up new ideas, and test them.
Solution: spend time prior to the Founder Institute coming up with ideas, and research customer development methods to try and get some feedback. Ask for a coffee with the directors to chat about ideas – usually their intuition for idea quality is valuable.
Completing Founder Institute
So why do I think I was successful in completing the program (bar an improbable exit in the next two weeks)?
Most of it has to do with the few points on why people failed.
First of all, I have a chronic fear of being someone who leaves things unfinished; it’s probably unhealthy actually. I’m still hoping to finish, this summer, the remote-control sailboat I started building 7 years ago. But it is going to be the best damn remote control boat around; and the best part – next time I build one it will only take me a tenth of the time, and probably a tenth of the money too.
The result of this fear is that I will do whatever it takes to finish something that I’ve started and committed time to. I also have a competitive streak, so when they told us the first night that 60-80% of people drop out, I took that as a challenge. The combination meant that I never saw an assignment as impossible, and I found a way to get everything done. Sometimes entrepreneurship is about finding a more clever way of doing things – cynics would perhaps sometimes call this cheating – but finding a way to get things done is what entrepreneurship is all about.
Second, I didn’t let life get in the way. Going into the Founder Institute I put all my focus on completing the program. I ended the previous startup I was working on. I traveled home and then didn’t plan any significant trips in the near future. I sorted out my living situation for the next few months, and I accepted the fact that I might not see my friends as much.
Now, I’m in a pretty fortunate situation to not have any commitments that can’t be shoved aside – good friends, and soon-to-be-graduates in the Founder Institute have wives and/or multiple children – you can’t just sit them down one day and say “right, well, I’ll be back in four months”. But they’ve still had chats with their partners and kids about what they are undertaking and why, and have their support. They make a conscious effort to schedule time to spend with them, and I do the same with my family and friends. But you have to be ready for that.
Third, I spent a lot of time prior to FI coming up with, and evaluating, ideas. I’d like to think my nose for good ideas is getting better – I don’t think I’ve experienced a steeper learning curve than the past 10 months, part of which is related to idea evaluation – and I managed to come up with some good ideas before heading into Founder Institute.
How do you get good ideas? That’s a topic for another post, but quickly, my guidelines would be try and stick within your areas of interest or passion, think about emerging markets, and most of all, get outside input. I sat down multiple times with friends, other entrepreneurs and family to brainstorm and evaluate ideas.
Founder Institute Benefits
Now that I’m at the end of the program, I can reflect a bit about what the program gave me, and whether or not my goals at the beginning of the program made sense.
Some did: there is no doubt that the program gives you relationships with top entrepreneurs, a great network in which you could definitely find a startup job, and a network of potential cofounders, as well as the places to find them.
But it also gives you so much more. Instead of just relationships with top entrepreneurs, I now have relationships with top entrepreneurs, venture capitalists, angels, bankers and lawyers from the top firms in Montreal, and further, even Silicon Valley. If I don’t, I probably know someone who does.
I no longer want a startup job – I believe it’s totally possible to build my own company. If I did take a startup job, it would be because I believed very strongly in the company or product, and I’d want to play an important role.
The value of the network of like-minded individuals and entrepreneurs is huge. I can’t overstate how important it is to surround yourself with great peers, and that’s become so much more evident over the past four months. The days when you feel overwhelmed, someone else just closed a sale, or added a new hotshot mentor, or released a beautiful product revamp, and all of a sudden, your motivation is back and you figure things out. And vice versa. And at the end of those brutal days, you can all go get a beer, or a whiskey, or maybe a few tequila shots if it was a really bad day, and laugh about all the dumb things you’ve all done so far, and once the hangover goes away, you’ll feel much better.
Perhaps the biggest benefit of the program, however, is raised expectations. Personally, professionally, from your peers – everything is higher. I’m no longer thinking about whether building a successful company is possible – I wonder whether we can build it to a hundred million or a billion. I wonder if we are going to raise a million or more for our seed round. I wonder about which person in the cohort is going to be the first to get acquired, or go public.
And even if we don’t manage to raise a million dollars, or we do fail, I know that one day I will reach those milestones. After all, if the Founder Institute taught me anything, it’s that persistence, above all else, will create success.