What is the most important factor in successfully pitching for investment? Having some proof you have customers interested in your product. Most startups skip over this step and go to investors unprepared. Why is this a bad idea? Here are some radical thoughts that will be discussed in our workshop:
- Most investor firms want startups to focus quickly on a product launch date and scale up. This is deadly advice. Ignore it. It leads to early bankruptcy if the startup has not discovered who their customers are and what they want.
- There’s only one reason for a business plan: Some investor who went to business school doesn’t know any better and wants to see one. Startups get focused on doing a business plan too soon. Once the business plan is delivered it is fundamentally useless at best and dangerous at worst.
- A startup is not a small version of a big company. What works for product development at a big company will not work in a small company.
- Unlike existing companies, startups go from failure to failure. That’s not bad if (1) one learns from failure, and (2) the failures are not expensive. The only way for a startup to find a good path is try lots of experiments and take a lot of wrong turns. Failure is a part of the process. The key is not to waste a lot of time and cash on the experiments. They have to be done on the cheap and done fast.
- A startup is a faith-based enterprise built on its founder’s vision and a notable absence of facts. The founder’s job is to translate this vision and assumptions into facts. Founders can’t do this by huddling at their desks. They have to get out of the building and go see customers.
- Market research firms are great at predicting the past and coloring their conclusions to fit what they think clients want to hear. They are no substitute for a founder’s getting out and testing ideas with actual customers in person.
Intrigued? Then sign up for the workshop either January 28 from 6-8:30 pm or February 4 from 9:30 to noon at Hacker Lab (2533 R Street). A $20 donation is requested, but don’t let that be a barrier. If you are serious about creating a startup, you need to come regardless.
ABOUT THE AUTHOR
Gary Simon is the Chair of CleanStarts Board. A seasoned energy executive and entrepreneur with 45 years of experience in business, government, and non-profits.