Authenticity as an Entrepreneur

booksThe buzzword in big venues today is Authenticity. Authenticity is praised in TED talks, self-improvement programs, and more recently business. But what is the value of authenticity in your startup? Jeffrey Pfeffer, Professor at Stanford’s Graduate School of Business and world expert on power dynamics, says “Your job as a leader is not to be authentic or genuine or true to yourself, your job is to be true to what the situation requires of you.”

Many view authenticity as disclosing their deepest emotions to others. That’s what Pfeffer implied in his talk. And according to Pfeffer, signaling your doubts and fears to investors is the last thing you want to do. So is authenticity worth pursuing, or is it best to discount altogether?

To understand if there’s value, let’s explore the root of the word. Authenticity derives from the Greek word authentikos: original and genuine. How similar this sounds to another word we know: authorship.

Authenticity in startups is authoring your vision. Although feelings make up a portion of your genuine self, so do your dreams, drive, and ambition. Great investors like David Rose and Marc Andreessen look for visionary entrepreneurs fueled by dreams and drive.

Authenticity has many facets. Be authentic with emotions around friends and family: we all need emotional support to enjoy success. But when you stand in front of investors, be authentic with your drives. You establish credibility and open floodgates to funding.

Powerful Pitch Intros

Pitch IntroLast night Dr. Phil Zimbardo, famous Stanford Psychologist and TED speaker, captivated his audience with a pitch about Heroic Imagination. The company literally helps save lives, but Dr. Zimbardo didn’t start his pitch with the service; instead, he first acknowledged investors’ need for social impact, then he said his company could help them achieve impact.

The best pitch intros appeal to investors. This hook either precedes the problem or is the problem. For social ventures like Heroic Imagination, you can acknowledge investors’ need for impact, then position your problem and solution as the means to achieving that impact. That was Dr. Zimbardo’s path.

For private ventures, the investor hook is low risk/high return. Last night, investors identified three things that immediately captured their attention:

Products that were already deployed.
Paraphrasing the words of Guy Kawasaki, an investor would rather see a product without a pitch than a pitch without a product, in part because a product lowers the risk that your team can deliver. This is not about describing your product, which comes later. This is simply about saying your product is already up and running. Following this short statement, you’re free to outline the problem.

Traction. We all know it. The insight for you is that when you show you’re already engaged with customers, investors will engage with you to understand why. This is not about describing your market or going into the business details upfront. It’s as easy as starting like this: “Today we have 20 customers. Through our pitch, we’ll show you why.”

Relating to the audience. Most great pitches dive into the problem immediately after hooking the audience. The problem can also act as the hook if you make it meaningful to investors. For example, it’s one thing to start your problem by saying, “sometimes people collapse on the street and no one helps them.” It’s entirely different to start with these words, “imagine if your son or daughter collapsed on the street and no one helped them.” When the problem becomes personal, investors are more likely to tune into the value of your product.

Investors want to invest in products that achieve their goals. These goals are high impact and low risk/high return. The next time you step into a meeting, make your first couple sentences appeal to these needs. When you do, you’ll engage them.

Win Investors in Startup Alley

Will you pitch at TechCrunch Disrupt next week to meet investors? If you’re interested in learning how to rock the floor at any startup conference, read on.

In 2011, we pitched in Startup Alley. We made a strong run for the top spot, and later took our learnings to win the floor competition at Founder Showcase. Below are the lessons to help your startup stand out in this year’s Startup Alley:

Engage Them: The best way to engage attendees is to get away from your booth! Take a few steps into the walkway and greet them. They rarely come to you. And to really capture attention, read their badge and greet attendees by name as they walk by. They always stop!

Your booth can also engage attendees visually. At Disrupt and Founder Showcase, we brought a 32-inch LCD screen and played our (very flashy) demo video. Like a net, it caught those who stopped to watch, giving us the opportunity to engage them. We also had a 6ft banner showing a graphic of our solution. Both worked (the video worked better).

Finally, the ultimate engagement mechanism: free stuff. During day two of the conference, one company handed out cupcakes. Needless to say, everyone stopped.

Deliver Your Elevator Pitch: Once you win attention, turn on the charm with an elevator pitch. How to deliver an elevator pitch: Problem-Solution-Benefits. In one sentence each, state the relevant problem people face, how you solve that problem, and the benefits. To learn more, download How to Nail the Startup Pitch.

Remember to focus on the attendee. Make the problem and solution relevant to them. The use of the word you is critical. For example, “Zooskers is a great way for you (or your wife or kids) to share internet experiences.” Then launch into examples of how they might use the product, tailoring examples to the attendee’s life.

After you deliver the pitch, show them the demo. Between three of us, we always had demos going on our two laptops while the third person engaged a new attendee.

Master the Ask: There is one last step to the perfect day. After your demo, always ask for something. Like a date, you approached them, charmed them; now get their number. If it’s an investor, ask for a followup meeting. We made our way into a few conference rooms after these events. If it’s a fellow entrepreneur, ask for advice. Every conference we attended yielded a plethora of business ideas and valuable contacts. If it’s Joe Smith, invite them to download the product.

Finally, ask for a vote. At a conference like TechCrunch Disrupt, if you collect enough votes, you get the opportunity to pitch onstage. Few things are more rewarding than stepping in front of an audience of investors and entrepreneurs to share the product you dedicated yourself to.

With the techniques above, you’ll pull in a steady stream of visitors and woo them to your world.

10 Tips to Win Disrupt Battlefield

TechCrunch Disrupt battlefield

Want to score major investment and massive PR? Just win TechCrunch Disrupt next month in New York. The winner walks away with the $50,000 grand prize and often millions more from investors. But how do you win the top spot?

As author of The Startup Pitch, I identified a pitch formula that over 90% of funded startups use to win investment in the boardroom.

Could a similar analysis of past Disrupt winners also yield the perfect Battlefield Pitch?

I ran the data analysis on TechCrunch conference winners dating back from 2007 by using a set of quantifiable variables. The analysis included companies such as, GetAround, and UberConference. The results: there are powerful guidelines you can use to make your pitch great.

Here are the top 10:

1. Follow the 30/90 Problem Rule. Intro your problem in 30 seconds if it’s simple, 90 seconds if it’s obscure. In 2011, GetAround succinctly described the problem of idle cars in only a couple sentences; later in 2013, Enigma outlined the esoteric issues of public data access in 90 seconds. 10 of 11 winners followed this rule.

2. Give a relatable demo. Show your demo in a way that the audience can personally experience. Some winners walked through the demo as-if they were a customer, including RedBeacon in 2009 and YourMechanic in 2012. Others like Lock8 in 2013 simply created scenarios that showed (not told) the functions. As an aside, winners on average demoed two scenarios. 11 of 11 winners made their demo relatable.

3. Deliver at least 3 benefits. Translate features of your product into value for the customer. When Layer presented their open communications platform, the team said they provide the UI as an open source component (feature) so “you can get started really quickly with messaging and calls” (benefit). 10 of 11 winners delivered multiple benefits.

4. Establish credibility. Show you’re the right team to run your startup either because you’ve experienced the problem (as showed in 2007), you have a great technology background (as Qwiki showed in 2010), or you have awesome partnerships (as GetAround showed in 2011). It’s not a team slide, it’s spoken. 8 of 11 winners did this.

5. Don’t discuss competition. Only 1 of 11 winners discussed competition, and that was for half a sentence. ‘nough said.

6. Traction is irrelevant. This is supposed to be your launch day! Only two companies, GetAround and Shaker, discussed traction briefly. 9 of 11 winners did not mention traction.

7. Highlight market size using 1 data point or not at all. The best way to show market size is to give data on the size of the problem as UberConference did in 2012 and Layer repeated in 2013. That’s not to say you won’t be asked about size during Q&A, but minimize market discussion in your presentation. 6 winners delivered one short data point on the market, the other 5 ignored market size altogether during their pitch.

8. Make it memorable! Why not make the audience remember you with a stellar demo? That’s what RedBeacon did when they used their product to deliver cupcakes to the entire audience; that’s what GetAround did when they unlocked a Tesla roadster in the conference room with their app; that’s what YourMechanic did by bringing a live mechanic onstage. 6 of 11 winners had memorable moments, and it’s worth mentioning that all 6 took place before 2013. Will you restart the trend?

9. Invite the audience to try it out. You’re onstage, you’re there to win customers and funding, why not take advantage of free PR and wrap up your pitch by inviting the audience to use your product. Go a step further and provide the audience an incentive to use your product as YourMechanic did with a signup bonus. 8 of 11 winners invited the audience to try out their product.

10. Share your vision. Imagine a better world where your product is successful and everyone is happy. That’s what Soluto and Shaker presented during their pitch. Some winners chose to introduce the vision at the beginning, but the majority wrapped up their pitch with a vision near the end. It only took 1-2 sentences. Follow suit. 8 of 11 winners presented a vision.

The 30/90 Rule for Pitching Problems

Best startup pitch of 2011 NYC

Getaround wins TechCrunch disrupt using the 30/90 Rule

When over 90% of funded pitches share one thing in common, your pitch better include the same. Successful startups like, airbnb, and ZocDoc all began their pitch with the problem. To win funding, so should you.

But many startups present the problem so poorly that they destroy their pitch. This has led at least one prominent investor, Bill Reichert of Garage Technology Ventures, to coach startups against presenting the problem!

The key to pitching the problem successfully is to follow the 30/90 Rule. If the problem is simple, explain it in less than 30 seconds. If the problem is obscure, explain it in less than 90 seconds.

Case in point: In 2011, GetAround pitched onstage at TechCrunch Disrupt and started with a familiar problem: “We’re here to share our vision for solving a problem we call Car Overpopulation. We have over 250 million cars in America that sit parked 22 hours each day. Our solution to this problem is Getaround, a new way for people to share cars.” Simple, clear, and it required less than 30 seconds. This simplicity not only contributed to GetAround taking home the $50,000 grand prize for best pitch; today the company has over $19 million in funding.

Two years later when Enigma pitched on the same stage, cofounder Marc DaCosta had to explain the esoteric issue of public data access via online databases. DaCosta gave a short description of public data, then outlined the difficulty with data access, including “restrictive web portals to messy FTP sites to 1970’s database formats.” It took Enigma 90 seconds to set up the problem before they introduced their solution, and in that time they successfully oriented the audience to the issue and highlighted the need. Enigma would take home the $50,000 grand prize that year.

Don’t waste time explaining familiar details like the number of cell phone users in the U.S., and avoid long exposés on the importance of fashion in the modern world. Limit yourself to 30s for simple problems, 90s for complex problems. When you do, you maintain investor interest while highlighting the needs that your product fulfills. That wins funding.

For more on how to pitch the problem, read Chapter 2 of The Startup Pitch.

Q&A – Stay Curious!

Nothing can feel more intimidating than stepping into a room to meet investors. After all, they can be rich, they can be famous, and they can be key to your success. When you feel intimidated, you become defensive. If you respond to investor questions defensively, you will fail.

PartiePoche pitched their product on SharkTank in 2012.The two young founders delivered a strong problem-solution pitch, but when one investor asked a simple question about the valuation of the company, the pitch fell apart. After trying to dodge the question, the founders said the question was crazy. There was some argument back and forth, and then one founder said “bring it on; let’s do it,” illustrating a classic aggressive response. After every question, the founders immediately attacked the question with a terse answer. This led one investor to say “you’re not listening to us,” and another investor to say “you didn’t even take a breath there [after I finished my question]… I don’t feel listened to.”

When you notice yourself feeling defensive, consciously shift your frame of mind to be curious. Listen to questions. Pause and consider the investor’s words as if they were spoken by someone on your team. Then and only then position your answer appropriately. You can use your curiosity to even ask questions yourself, thereby reducing the feeling that you’re under interrogation.

Investors constantly assess whether they can build a cooperative relationship with you to make your company successful. Next time before entering the meeting room, ask yourself: are you open to hearing the inevitable doubts that investors will share? It’s important to position yourself well, but never forget that relationship is equally important. Stay curious.
For a detailed review on how to be successful in Q&A, read Chapter 4 of The Startup Pitch. You’ll get insights and examples of exactly how to manage questions and appear more confident.