Last Friday I was fortunate enough to be one of the evaluators at the Impossible Pitch along with Peter, Maria and Tasos – an awesome group of people that I loved working with (that includes the other Maria who was in charge of everything)
Our job was simple on paper. Watch 20something 2 minute pitches, and select the top 4, and then the next top 3 that would compete for the final spot.
I am happy to say that the teams did their best to give us a hard time with our decision – I personally believe that at least 11 teams did a good job and were good enough to go through the next stage.
The most important thing in such events are not the results, but the learning each individual and team gets from the experience.
I am very grateful for the feedback I received when I was in a similar position and thus I am writing this blog as a pay-it-forward thank you.
So without further ado, here are the top things I wish I could tell to all the teams before their presentation (based on recuring elements in most presentations).
As always, these are just my thoughts which should be taken with a grain of salt (and preferably with a laugh or two)
Most teams feel more comfortable telling that they will have more than 1 revenue streams. I used to do that myself – I would say that AtYourService has 3 distinct revenue streams.
While having many revenue streams might impress an uneducated audience or someone who does not know your market, if/when you are talking to an educated audience/investor it will only tell them that you are not confident enough in your basic revenue model and you are throwing Plan B and C in there in case you are wrong – never a good sign.
When talking about your revenue stream you should say:
I will make money this way, for example via a Freemium model.
And then you need to present data that shows how much money you will make.
Ideally your revenue model is a straightforward one, i.e. if you are making 20% commision you can say we will have Sales of 1M so we will make 200,000 – easy peazy.
If its not as straightforward – let's say you have a freemium model and you haven't launched yet to have real data, then you have to use comparables or Industry standards.
So for example, the current freemium conversion is about 2% (but varies based on industry)
If you have 1M monthly active users, you can expect 2% to pay you the subscription of lets say 10 per month, that's 2% x 1,000,000 = 20,000 x 10 per month = 200,000 per month.
Now this is usually one of the most challenging parts of your presentation. If you use numbers that sound reasonable to you, you will not be making a ton of money and it will not sound impressive.Not good.
Which leads me to my next point
Knowing your shit at the beggining is really really tough because… well, there is a ton of shit to know and you don't even know when to start. So when most people are not sure about a figure instead of doing exhaustive research about their industry or real life tests , they fall back to common sense.
Sounds reasonable right? I mean it kinda works for life in general.
Unfortunately it doesn't work in Startups. Let's take the above example about a Freemium service.
If you make the assumption that 10% of the users will be paying you and you do not explain in the next 20 seconds why that will happen despite the industry average being 2% then any person who knows your market will stop listening to anything you say. The reason? You haven't done your homework – you `re not ready for the big leagues yet.
Fortunately or unfortunately any investor (or at least the good ones) that would be willing to invest in your market knows the market well.
Every time you are trying to raise an investment, you are asking for Money that will help you do X , Y , Z and willl result you going from A to B.
If you are asking an investor for 10k/100k/1M/10M of their money you got to be able to tell them exactly what you will use the money for, how long it will last, and where will you be at the end of that period.
Here is an example of what you should say:
We are looking to raise 100 000 that will enable us to hire 2 Programmers in our team for 18 months. At the 8th month we will launch our MVP, gather feedback and then on Month 14 we will launch our full Product.
Our goal from Month 14 to the end of Month 16 is to have 100k downloads and grow at least 10% week to week.
When we hit our goal, we will proceed to raise another investment round to focus on growth.
If there was one mistake almost every team made it was saying that they will do too much and asking for too little money. In most presentations I don't believe that even a great team could achieve what was promised with 10 times more money.
So I suggest you go back and read the stories of other startups, see how much it cost them to get things done and go from A to B and adjust your plans.
In general most teams had well rehearsed presentations -kudos for that. However, in the question section each answer took waaaaaay tooooooo looooooooooong, which was bad because:
a) You confused us
b) It showed that you did not which bits were important. Trying to say 1000 different things does not show that you Know your shit – it shows that you don't know how to differentiate between what's important and what's not.
c) It prevented us from asking you further questions that would help illustrate your points.
In such events, when the judges/audience ask you questions, the best answers are direct, short and confident :)
So these are the main points that most presentations shared. Below I will also share some additional points which I will not expand on but I believe are worth sharing
– We are the first/only/biggest company doing X. That's either bad, or shows you didn't do your homework. Simply don't use it,or if you want to use it, explain why you really are the first/best/biggest
– In order to have a business you must allow your customers to make money
– A low price shows a lack of belief in your product. We made that mistake like a trillion times with AtYourService till an investor sat me down and explained it to me in so many words :)
– Really Bing? A number of teams in their marketing activities mentioned bing. There are 2 possible explanations. They either heard the first team saying it and repeated, or i momentarily jumped into a parallel universe where Bing is a thing.
Sooooo that's it! Once again let me say that you should take my advice with a grain (or preferably a ton) of salt . These are just my thoughts and probably a lot of them are wrong – your job as a founder is to filter them, learn from the good ones and discard the rest.
P.S. I have detailed notes on my thoughts on each team. If you would like to get my thoughts on your presentation just shoot me a message and i`ll share my honest feedback :)