Any investor or venture capitalist quickly learns what to look for as he or she considers making an investment. After one sees a batch of deals, pattern recognition takes over. Investors are looking for big returns and want to hear about ideas but also want to know that the entrepreneur is not naive when it comes to what it will take for success.
Certain triggers will make for an immediate reaction, and not in a good way. In the spirit of cheering for entrepreneurs, here are a few pointers – both what to do and what not to do.
On the “what to do” side I have only one piece of advice: GET ATTENTION. Over the course of my investing career, I have heard phrases like the following:
“Our technology will detect autism in children at an early age.”
“Our technology will disrupt the college choice process.”
“As PayPal is to payments, we are to passport control.”
It doesn’t matter whether or not the money was invested; these entrepreneurs had big ideas and had my attention. The rest was due diligence.
The “not what to do” bucket is a big one but here are a few obvious mistakes that entrepreneurs are prone to make:
- Telling me what I already know. I know the Internet changed the world. I know that big data is big. Don’t start there, start with what I don’t know.
- Pronouncing there is no competition for your idea or technology. It is never true; there is always competition. To say otherwise shows a naive entrepreneur. Go back and do research to identify the competition.
- Proclaiming that your idea will go against Google, Apple, Facebook or many others and make a dent in their growth. It’s too late; don’t say what you will do to those big successful companies with billions in assets. Even if that is your intent, it is not credible.
- Failing to answer the question, “What Is It?” Investors don’t need suspense. By page two or three any investor should know what your idea or product is and understand the space in the world it occupies. Is it software, a drone, an app, a flying car? Just blurt it out early.
- Confusing an Advisory Board with people who will build the company. Having famous people on your advisory board makes for a good PowerPoint but investors know that most advisors don’t help with day-to-day operations. The team that is running the company is more important than eye candy advisors.
Entrepreneurs complain that if they talk to ten different people, they will receive ten different pieces of advice about an investor pitch. My advice is to listen to all ten but make sure you are comfortable with your end product.
Oh yeah, did I mention that listening to feedback is a big part of being a successful entrepreneur?
A little boy rang the doorbell and asked if he could give me his elevator pitch about why I should support his basketball team. Yes, elevator pitches are still all the rage and not about to go away. The concept probably started in Silicon Valley, which is ironic, since most of the buildings in Silicon Valley don’t have elevators. And like lots of other things that start in Silicon Valley, the concept has spread for better or worse.
An elevator pitch is a crisp and tantalizing description one can give to a potential investor or employer in the time it takes to get from the lobby to their appointed floor or vice versa. In other words, “You don’t have much time, so make it snappy, entertaining and compelling.”
Most times I am on an elevator, no one talks to anyone else. Even if anyone did talk, I don’t think the rest of the occupants want to hear a pitch. But here we are with elevator pitches coming from kindergartners about acquiring puppies; jilted boys explaining why girlfriends should take them back; authors pitching books to publishers; and complex policies reduced to Twitter blasts.
As a sometimes investor I have heard my fair share of elevator pitches, good and bad. The best elevator pitch to give to an investor will answer two questions:
- What is it? Is it food, software, a device, a drone or a movie?
- What do you want? Is it a huge idea that requires millions or is it a pet project that requires a little advice?
Answering those two questions might be enough to get someone to linger in the lobby where you can go into more details.
Everyone needs an elevator speech about something. Questions like what do you do or tell me about yourself are prime candidates for an elevator answer. To not have one might show poor communication skills when you most need them. And most employers will say that the one thing that hurts people’s careers more than any thing else is poor communication skills. Knowing the key message that you want to convey is more important than all the fluff around it.
Some will say that the concept of elevator pitches is shallow, rude and ineffective. Remember that an elevator pitch is just a metaphor to emphasize how important it is to have a short interesting message, and I am all for that. Sometimes a little more time is required to explain the passion and importance of an idea.
Make sure you have a short, concise, well thought out pitch, but don’t confuse it with communication skills or heartfelt discussions. We need elevator pitches but remember that some elevators only stop after a long ride.
The next time the office reeks of those reheated burritos and the leftover chicken chow mien, don’t just complain that you can’t work under smelly conditions, say a prayer for the restaurant business. The Wall Street Journal and other media outlets are reporting that the U.S. restaurant industry is in big trouble. And the reason can be summarized in one word: lunch.
Americans are not going out to restaurants for lunch and it’s showing up in their bottom lines. Restaurants are reporting the lowest level of lunch traffic in over forty years. Before you think this fact is yet another sign of the apocalypse, think again about your own habits and schedules and you won’t really be surprised. Consider this:
- We all need a moment of solitude during the day as the meetings and expectations and pressures mount. That turkey sandwich at your desk might be all you can muster. It’s not unusual for people to put on headphones and enjoy a chicken Caesar and relax with visions of beaches for just a few minutes.
- Offsite meetups are more likely to take place over a coffee – not lunch. A coffee is much less of a commitment than lunch, and you can do a bunch of them in a day. We may get the caffeine jitters by the middle of the afternoon but there is no doubt that coffee is detracting from the lunch crowd.
- Working from home means your chances of going out to a restaurant for lunch are almost nonexistent. When working from home you will probably dip into the fridge for that burrito or chow mien too.
- More and more companies are providing lunch onsite to make us more efficient. It may not be the chef prepared meals like Google or Facebook but any lunch provided will be good enough if it’s free.
Lunch isn’t going away. Like so many other parts of the workplace, it is just changing. You can pick and choose what kind of lunch person you want to be. Probably even better is to go with the flow of your workplace and do the lunch thing that others do. If everyone goes out to their cars at lunch and eats alone you might want to find another place to work.
For me, I like lunch. I have lunch every day. It’s the break that shouts half way home.
What is your lunchtime routine?