This week was the last "normal" week in Techstars, before the pitch practice madness begins. The final week was full of workshops, with the last workshop on Friday, and the topics varied from selling techniques, to common VC (venture capital) pitch mistakes, to PR (public relations) strategy.
Workshop - Selling to Prospects
This workshop was given by someone who has years of experience selling all over the world, and was very interactive. The interactive section, which involved practicing elevator pitches with multiple judges, provided a lot of the value, but the workshop itself provided the framework for that section. The highlights:
- There is a huge difference between nice to have and must have; sell to the people who must have it.
- A salesperson wants to make money; they will only join you if they think they can make more money.
- Sales is a science, not an art, and can be learned.
- Close big customers 2-3 months before end of fiscal year to get rolled into their budget for the next year.
- Don't start with a demo; demonstrate mastery of their business and domain, and how you can help them.
- Don't mention things like 'tech', 'app', 'software'. They don't care about your "innovative SaaS software solution" - they care that you can improve their business or life.
- Look for published material (speeches, blogs, etc.) from your decision-maker (the person you need to close) about the challenges in their industry or space. Often they will give you the answers ahead of time.
- Everyone in the company should have 3-4 insightful questions for the decision-maker in each vertical you're targeting, and be prepared to bring them up whenever they meet someone relevant.
- "Do a few of the right things very well" (in other words, focus).
- "Delight" your customers; if your customers aren't "delighted" by your product, you don't have a long-term business.
Workshop - Common VC Pitch Mistakes
This was given by an entrepreneur-turned-VC, but was presented as the things that VCs are looking for when they see teams pitch. Awesome info:
- The things we look for, in order of importance: who (team), product, market, business model, competition.
- Additional items of importance: necessity, tech, financing (current), ask.
- We are looking to figure out how people think, and what their personality is like.
- Team is the most critical aspect of convincing a VC.
- The most experienced entrepreneurs evaluate their VCs as well; they are building their team, and VCs are a part of that team.
- Product and need has to be crystal clear:
- How much pain are they really feeling?
- Can the product solve that pain?
- Ideal business model has: high volume, low touch, high margins.
- "Touch" in this context is how much you have to interact with customers (support, onboarding, etc.) to get the sale.
- If the above business model doesn't exist for you yet, you need to show how you're going to get there.
- Market: top-down or bottom-up is fine, but you need to make sure you know how to clearly segment your market.
- Innovate in how you get your product to market, not just in the product itself.
- How are you going to win? Team? Tech? Innovative business model or go-to-market?
- Looking for time to break even less than 12 months, LTV:CAC > 3, churn break-even.
- Where is the money you're getting going to get you? This is not a timeline question, but rather what milestones or success metrics will this let you reach?
- Follow your slide deck, otherwise you lose control of your message and the meeting.
- Do homework on the person before coming in, and send a follow-up email.
- Get to your point and be concise.
Workshop - PR Strategy
Presented by both a reporter and a PR specialist, this workshop gave lots of insight into the unwritten rules in PR:
- Working with the press is a relationship - don't expect them to write about you the first time you contact them.
- Build a spreadsheet of your relevant reporters and their contact information.
- Try to figure out the interests of each reporter; best way to do this is by checking their recent stories.
- What are the goals of your PR? Make sure you have targets.
- Email pitches to reporters need to be short, and show benefit for the reporter.
- Don't take it personally if you don't get a reply.
- Never send template pitches, and don't blitz everyone.
- Email pitch format: mention similar article, brief sentence or two about who you are, mention why now (ie. what's the story?).
- Plan ahead if possible - reporters have editorial calendars.
- Nothing is ever off the record, but if you have a relationship you can potentially trust people.
- Having coffee, chatting, etc. (like with an investor) is very important - not always oriented around you, but rather more on building the relationship.
- Reaching out on LinkedIn, Twitter, at events (they're usually at all the relevant local tech events) is a great way to start relationship.
- Follow up by email: "Met you at....".
- Don't forget the local reporters who cover you early and always take the interview (reporters change jobs often).
- Bullet points for emails are good.
- Reporters love numbers.
- You can reach out to multiple outlets, but have a different angle.
- You can use deadlines to provide incentive to reply, but be careful - don't make it a habit, or you'll annoy reporters.
- Embargo: no one can publish before X date and time; you have to ask someone to agree for an embargo OR an exclusive.
- Only offer embargoes to reporters you trust.
- Embargoes should be used for things all publications will likely print (and make sure to add time zone).
- Use exclusives to help relationships or if certain publications could make or break the PR goal.
- Definitely include a link to your company in your email.
- You can't look over the article/story/etc. beforehand - don't ask.
- While you can't change quotes/facts after, you can send a follow-up email with facts or things you want to request being changed.
- Reporters are not your friends - be careful what is said, and where you work or talk about things (ie. plane, public places are all fair game).
- Trend stories are possible to pitch (ie. trends within your industry).
- Be very careful with PR agencies:
- You likely don't need one as a startup.
- Call reporters and ask who, within what agencies, they like working with.
- Continue to be personal (don't switch to a PR person) with those reporters who supported you early.
- Email subject examples: "Today launching [X]" or "Hey [reporter name], launching today".
- Don't call - pitch by email.
- Wait a week to follow up. If it's pressing, add that to subject line.
- Be online - AngelList, Crunchbase, etc.
- Send a follow-up email with results of PR to reporters, and also share, link, etc. the posts; reporters have metrics too, so help them however you can.
This Founder Story was from a Techstars alumni company who is doing fantastic, in a non-traditional space for startups and innovation. They've raised a lot of money and grown significantly (100+ employees), so there was lots of interesting advice:
- Raising money is all about selling the vision.
- One of the toughest moments in building a startup is firing your first major employee.
- Start asking for people to invest one month before Demo Day.
- Complaints can be indicative of a great problem - you likely have a poor product but they want want this problem solved enough to complain.
- Sales rule: answer 5 questions and then ask them to buy.
- Avoid having the sales team dictate the whole product roadmap - you still need to move towards your vision.
- Technical debt can turn off engineers.
- Finding a person to be your advocate within a VC firm is 90% of the battle.
- Building a startup is a "maze, not a marathon".
- "Even bad employees have friends".
- Relationships with founders from other companies are extremely important - make sure to try and join a CEO group or stay in touch with friends from accelerators, etc.
- When you encounter problems, give them a name, and then have a "retro" tomorrow.
- You can save customers if you overwhelm them with updates when things go wrong and put energy into your correspondence.
- Always ask when you don't understand within a company - this will perpetuate the attitude throughout the company.
- Add processes intelligently, and look for opportunities (times) to add processes.
- Vote with your attention - make sure meetings and decision-making is concise. Be present and be involved.
- Read: Venture Deals.
A lot of content this week, and most sections probably warrant a post of their own, but that will have to wait. Until next week!