As a mentor at MIT Venture Mentoring Service, I very often see entrepreneurs at the concept stage. One common issue I have found is that often they aren’t clear in their own minds if they intend is to create a product or build a business.
Often it’s one of the first questions I ask them, because this basic decision will have a great influence on the myriad of other decisions they will need to make if they decide to build a business.
With all the tools available today to developers one person can develop an app or other product themselves, and fairly quickly, without much capital. And there is nothing wrong with that ambition. Products can be sold or licensed to other companies, that can take on all the responsibilities for making the product successful, including sales and marketing, customer support, maintenance and enhancements, and much more – freeing the entrepreneur to focus on creating new products or services.
The bottomline is: if you want to build a company you need to think as much or more about building your team as building your product and acquiring customers. And virtually all VCs will tell you that they invest in teams, not in products. (I believe Don Valentine is one notable exception to this rule.) The common wisdom is that VCs will take an A team with a B plan over a B team with A business plan, because plans seldom become reality and an A team can pivot successfully, a B team can not.
Organizational design, recruiting, and compensation plans are key to building teams and topics for another day.
I consider to be one of my responsibilities as a mentor to be providing entrepreneurs pointers to helpful resources .
The Presentation Secrets of Steve Jobs: How to Be Insanely Great in Front of Any Audience by Carmine Gallo is a book I highly recommend.
I saw Steve launch the Mac in 1984 at the Boston Computer Society and launch the NeXT Machine in San Francisco, along with watching virtually all of his product intros that Apple has made available on video.
Carmine Gallo has gone through all of Steve’s presentations and extracted the principles that help make his presentations so effective.
Just so my biases are clear: I consider Steve to be the best presenter, sales person, marketer, and product visionary ever. I only met him once and briefly, when he came to MIT because we were selling the NeXT machine in the MIT computer store, which I was responsible for building. But I can understand how people who worked with him talked about “his reality distortion field”. He had more charisma than the next ten charismatic people I’ve ever known.
Reading this book will not enable you to present as if you were Steve Jobs, but it will certainly help you create presentations that are clear, simple, concise, engaging and memorable.
Journalists tell stories in their articles for the media. Traditionally every story had to answer the following six questions to get by the editor’s desk: Who?, What?, Where?, Why?, When? and Where?, not necessarily in that order!
I’ve found that asking an entrepreneur to put the story of their company into this framework can really help them clarify their thinking and improve their ability to communicate the story of their business to others.
Here’s what I’ve added to those six questions to make them relevant to telling the story of a business.
What is it you do?
- What problem do you solve?
- What opportunity do you create?
- Are you a pain pill (must have!) or a vitamin (nice to have …)?
- What are the benefits to customers? to the company?
Who do you do it for? Who are the:
- End users
- Economic decision makers
How do you do solve the problem or create the opportunity?
Who are you? The team
- Why it your team best equipped to do what your company does? Experience? Education & Training? Expertise?
- Gaps to be filled?
- Others involved: Board of Directors, advisors, consultants & contractors
Why do you do it?
- What is your mission?
- What motivates you and your team members personally? (Money? Fame? Impact on the world?)
When is it your product or service used?
- Is this a service or product that is used once?
- Used occasionally?
- Used regularly?
- Used only for a fixed period of time?
Where is it used?
- In business
- In schools
- In the home
- In the car
More companies die from indigestion than starvation.
David Packard.Co-founder of Hewlett-Packard. His simple rules for business helped develop the powerful H-P culture that drove a successful company for decades and influenced many Silicon Valley founders, including Steve Jobs.
I use this quote often when faced with an entrepreneur who is having trouble focusing and in my opinion is trying to do too many things at the same time.
Wee Willie Keeler was a Hall of Fame baseball player in the 1890’s. When asked the secret of his success he replied:
Keep your eye on the ball and hit ‘em where they ain’t.”
Willie manages to get two important startup principles into one short sentence! Focus is critically important in startup companies – thus “keep your eye on the ball”. Scope creep is the enemy of focus, watch out for it.
The second part of the sentence pertains to finding the so-called “white space” in a market, the unoccupied niche you can dominate. It also relates to the “blue ocean” theory (red oceans are bloody with competition, blue oceans are blue with opportunity). Here’s the book, which is well worth reading:
Blue Ocean Strategy, Expanded Edition: How to Create Uncontested Market Space and Make the Competition Irrelevant by W. Chan Kim and Renée Mauborgne
My other Willie quote comes from bank robber Willie Sutton. When asked by a reporter why he robbed banks he replied, “Because that’s where the money is.”
Entrepreneurs sometimes forget that not all customers are created equal and can benefit by being reminded that given the same cost of customer acquisition going after deep pocketed customers can deliver a must better ROI than those who are not so well off.
This relates to the concept of lifetime value of a customer, a subject for another day.
One of the recurrent problems I see with the startups I mentor, and even with established companies, is that their presentations are far too complex. There really are two types of “presentation” documents: those meant to be read and those meant to support a speaker. The former can be more complex as they need to standalone, but the rules of simplicity still apply.
These quotes apply to presentations, products, organizations and virtually everything else, but since I see so many pitches I tend to use them most during pitch reviews.
Everything should be made as simple as possible, but not simpler – Albert Einstein
Perfection is achieved, not when there is nothing more to add, but when there is nothing left to take away. – Antoine de Saint Exupery
As a good example of the value of team mentoring, when I used the Einstein quote in a team mentoring session the other mentor brought up the Saint Exupery quote, which I had not heard. So both the entrepreneur and I learned something.
Quotes like these are a powerful tool in mentoring, as the credibility of the source lends weight to the insight and such classic quotes tend to be memorable.
For an entire book on the subject of simplicity I recommend John Maeda’s The Laws of Simplicity (Simplicity: Design, Technology, Business, Life).
I find a large part of mentoring activity at both MIT VMS and SIF is helping companies prepare investor pitches and reviewing their pitches. Companies, even established ones, are always pitching, to investors, potential partners, analysts, and others.
The attached document was developed in collaboration with Bill Warner, one of Boston’s premier entrepreneurs and angel investors. I had the privilege of working for Bill at Warner Research. Bill is a great mentor and I learned a lot from him about pitching, the need for alignment of the founding team, about intentions, and much more.
Warning this is a long document, it will take longer to read than any pitch will to deliver. But while it was done years ago I think it’s still valid.