Before you hire a PR agency or even consider PR, the first thing you need to understand is what you are trying to accomplish, what is your objective.  Second, you should consider whether that objective is right for the stage of your business.  If you are an early startup, pre Product-Market fit, or even pre “Sales and Marketing Roadmap,” you should not hire a PR firm.

Hiring an agency is wrong, because, generally:

• You do not need press releases
• You do not need a campaign blitz of articles and press mentions
• Your PR firm does not know how to do your customer messaging or positioning for you
• Your PR firm should be no where near your social media
• Most PR firms will tell you need all of the above, that they are the experts and you aren’t, and will try to charge you a retainer of at least 5K/month

You do not need press releases.

Do your customers read press releases?  Does anyone?   Press releases were originally intended to notify media of a newsworthy story.  In the high-tech world, releases have been so abused by businesses blasting trivial events on the one side and by media outlets writing “stories” that repeat the content without critique or judgment that the credibility of releases has diminished significantly.  And it’s getting worse.  Online releases are used not to provide notice to interested parties, but rather to generate external links in  order to boost PageRank.  If your objective is the latter, there are several online PR services that will accomplish your goal for a lot less money.

You do not need a campaign blitz of articles and press mentions.

An agency orchestrated analyst and media tour and blogger outreach program is called “awareness” marketing, is intended to create “buzz” about your product and company, and can indirectly lead to increased visits to your web site by prospective customers.  Hiring an agency to lead this effort is still the best way to go, because a good firm not only has a great rolodex of media contacts, but the principals have relationships with the media that mean increased credibility and better press.  The problem is that startups are not ready for the buzz.  You can only launch once and if you blow it, it’s blown.   If your selling process isn’t tuned to your customer’s buying process, if your target market segment isn’t finely tuned, if you product doesn’t provide enough value to retain users and you need to pivot, you’ve likely wasted your one chance at not blowing the Techcrunch bump.

Further, as you grow and learn more about the market, you want to cultivate your own relationships with key figures in your industry.  Since reporters and analysts participate in social media, access to them through your network without the assistance of a PR agency is pretty easy.

PR firms do not know how to do your customer messaging or positioning

I find this one particularly irksome, because PR firms often tout their ability to develop messaging and positioning.   And they can do a good job when targeting the media and analysts. PR firms do not know your products, customers, or competitors.  You do, so it’s your responsibility to learn what messaging and positioning works in your market.   The key verb here is learning. You should be testing your positioning through Customer Development interviews and A/B testing.  There’s a large pool of talented and creative people (including PR professionals) who can help you brainstorm concepts and wordsmith phrases, but outsourcing the effort to an agency is a recipe for bland, undifferentiated marketing-speak.  Further, wrong positioning, like placing you in the wrong market, could ultimately lead to your startup’s demise.

PR firms do not belong any where near your social media

Big companies hire PR agencies to manager their social media streams, because they don’t want to screw up their brand.  It’s spin, baby, spin.  It’s used as a continuation of traditional one-way communication from company to consumer or as a new (mostly) one-way communication from consumer to company black hole.  This is likely not your social media strategy.  Your strategy likely is to belong to a community through active participation (in ways that don’t directly benefit you), and to provide value unique to you and your business.  You might retweet interesting articles that relate to your industry, answer questions unrelated to your business, or even give props to competitors who have done something positive.  Such activity requires intimate knowledge of your products, customers and community and you cannot expect a PR agency to have that level of knowledge.

Most PR firms will tell you need all of the above, that they are the experts and you aren’t, and will try to charge you a retainer of at least 5K/month

PR agencies are in a tough place.  Online PR resources; reporters, analysts and influential bloggers easily accessible to businesses; decreased use of traditional (e.g., print) media; and a legacy of a high-priced retainer fee structure portents poorly for traditional agencies.  Hence the move to make their case as the natural purveyors of social media marketing.  For the reasons given above, however, I beg to differ.

Which isn’t to say, you should never do PR.

At Eric Ries’ Startup Lessons Learned conference last month, I participated on the Customer Development panel and we were asked if PR was ever justified.  While moderator Sean Ellis and fellow-panelist David Binetti rightly pointed you shouldn’t do PR campaigns, as I discuss above, I mentioned that there are ways to use PR activities in “small” ways to help you achieve discrete objectives.  Low-level PR can help build an “expertise reputation” for a Founder without compromising the company.  Low-level PR might help you access specific industry contacts who you feel may be early adopters. The distinction here is that you’re not trying to build “buzz,” but rather are taking discrete steps to achieve a defined objective within the context of the stage of your business.  For these tasks, you can do them yourself or you might hire a PR consultant and pay them by task or by hour.

Finally, some believe that buzz is required to raise capital.  I don’t know, but I have a hard time believing that’s true.  I do know that I’m not sure I would want money from someone who could not see through the ruse of manufactured buzz.

Comments welcome!

The Sean Ellis 40% rule-of-thumb was quickly invoked as were other ideas.  However, I thought it worthwhile to share one insight that came from an experienced start-up entrepreneur at the table.  While we were talking about triangulating on the various signals available to an entrepreneur as to what constitutes Product-Market Fit, he recounted a story — really an accidental natural experiment — on how he unequivocally learned his start-up hadn’t achieved Product-Market Fit.

To wit, his site had gone down for a few hours, and he hadn’t known about it.  In the interim, there had been nothing but silence.  None of his users had squawked or had made it publicly known that the site was down and they were angry/frustrated/furious/going to switch providers/fed-up-with-this etc., etc.

This lack of frustration/noise is a data-point.  In this case, it meant his start-up had a ways to go on iterating to finding Product-Market Fit.

As a contrast, we might choose to look at what happens when Twitter goes down.

So, for the more intrepid of you out there, perhaps try “accidentally unplugging” your servers and see what happens.  (Clearly, this has significant risks such as alienating users, but it may be a useful signal to know when you don’ t have Product-Market Fit, if you were wondering.)

BTW, I believe Dave McClure has advocated a very similar idea with regard to features.  If I recall correctly, he suggests removing features from a web app and waiting to hear if users complain loudly.  The intensity of the complaint is likely correlated with the usefulness of the feature.

Modern culture dictates that we claim to know, so we spend a lot of time knowing stuff. We expend much effort displaying our expertise.  If we personally don’t know something, we rely on designated “experts,” who tell us they know (despite their unimpressive track record). We know where the stock market is headed. We know how countries will respond to “liberation.” We understand the ins and outs of other cultures. In relationships, we do not hesitate to state unequivocally the others’ thoughts, intentions and motivations. At some point in the past, we have “known” the world is flat, the sun revolves around the Earth and that spontaneous generation exists. Collectively, we know both that “God Exists” and that it doesn’t. We know that the people in our tribe are more intelligent, moral, and civilized than in theirs. Of course, they say the same thing.

Everyday, millions go to work knowing what their customers need and know how to market and sell to them.  Getting feedback on business plans from a “panel of experts” is often an exercise of pure bloviatng.  Executive teams sit at conference tables playing “pass the conjecture.”

Einstein wrote about a lack of knowledge being the key to learning.

Approaching problems with a clean slate, allows one to view problems more objectively, to see things one might not see if filtered through the lens of what you know. His thought experiments were constructed from the perspective of an unknowing observer.

I don’t know.

It’s a powerful idea. It’s liberating.

First, it’s anti-delusional.  To admit that you don’t know (or to accept the premise that you don’t know) is honest.  Being honest with yourself is frees you to explore all sides to a problem.  Being honest with others from the outset instills credibility, even when that honesty means admitting a lack of knowledge.  Try one of these the next time someone asks for your opinion:

I don’t know, but perhaps…

I don’t know, but to find out we could…

I don’t know, but I bet your existing customers do…

Second, while no one is able to completely eliminate personal and cultural biases from thinking, increased self-awareness allows you to potentially minimize or at least account for them.  Denying them may shield  you from a more inciteful answer or more relevant result.

Third, “I don’t know” exposes what you need to test and learn.  If you know social media marketing is the best way to market to your target segment, say, low-tech, late-majority, senior citizens — hey, more power to you!

Open your mind to all possibilities and then use your experience to test.  Hunches are great, but accept being wrong and have a test B (and C, D, etc.) in place.

People, language is for communication and marketing terms, abused as they are, fall somewhere within the scope of language.  To communicate you need to learn the terms.  To practice marketing or to hire a marketer you need to grasp some basics. Please.

Marketing Help Rule 1.

(<> means “not equal to”)

Blogging <> PR <> Brand <> SEO <> Logo <> Advertising <> Tagline <> Messaging <> FaceBook <> Positioning <> Twitter <>Lead Gen <> [Enter mktg term here]

Marketing Help Rule 2.

Trust me, you don’t need all the marketing tactics listed in Rule 1.

Marketing Help Rule 3.

The right marketing tactics for you, right now depend on WHO your prospective customers are and WHAT stage your company is in.

Marketing Help Rule 4.

All Marketers have a core competency (or two).  Regardless, (almost) all Marketers will sell (almost) all marketing services.

Marketing Help Rule 5.

You need marketing to grow your business.  And more likely than not, you need or will soon need help marketing.  Admit it.

For a moment, forget everything you know or think you know or have heard about marketing.  Start with a clean slate.

Now imagine you are a new customer of a particular product or service.  You just finished buying.  You are a bit giddy:

• You’re eager to get started.
• You’re excited at the prospect of reaping serious value.
• You’re determined to at least get your money’s worth.
• You have a small fear in the back of you mind that you spent too much or made the wrong choice.
• You both want to show it off and hide it from view until you’ve proved it’s worth.

Now like a bad movie flashback, go back to this morning right before your alarm clock sounded.  Better yet, go back to the moment BEFORE you realized you had a NEED that you MIGHT eventually purchase SOMETHING from SOMEONE to RESOLVE the need.  Your experience from this moment –pre-realization –to the moment of sale is marketing.

Your maybe want to tell me it’s sales.  But no, the seller sells.  The buyer experiences marketing.  Whether you agree or not, analyze all the marketing advice you’ve received in this context.  Think about all the people telling you that you must use social media marketing.  Think about magazines, news, commercials, blogs.  Think about your logo and your clever slogan.  Think about “your brand must be consistent!”  Think about your color palette.   Did any of these things affect your path from pre-realization to purchase (as far as you know)?  No, yes, maybe?

Ruminate on this concept:

Ms. pre-realization will eventually buy from me because:

• I’m a good person
• I try hard
• My technology is the best
• I don’t oversell
• I’m ethical
• General Haig interviewed me on some TV show on a plane somewhere, sometime.  I think.
• I tweet

Marketing feels daunting because you are being shown a dozen yellow brick roads that weave off gloriously into the colorful horizon.  That and the promise that the chosen path is flowering with ROI poppies.  Walk forward in your customer’s shoes from before purchase; from pre-realization.  How do you get to you?

A technical CEO learning marketing is the equivalent of a sales/marketing CEO learning development engineering.

Not.

I am not a developer.  If push comes to shove, I can code in PHP, or develop shell scripts, and truth be told, I did take a couple of ECE courses in college; courses which inexorably told me I was not going to be a developer.

My path to becoming a marketer was unusual, I think, which has had both its advantages and disadvantages.   I like to think I’m a “technical marketer,” rather than what I call a “Madison Ave” marketer; not to dis the later, since they have their role to play in the grand scheme of marketing.  By technical marketer, I don’t mean one who only markets technical products, or who does only “product marketing” in the industry vernacular, but rather a marketer who uses processes and actionable metrics to achieve near term business objectives that lead to realizing company vision.

IMO, development is harder than marketing.  The phrase “everyone is a marketer” is a mocking one, but it contains a granularity of truth.  Most people at one time or another promote themselves (to get a job), or reflect on messaging (e.g. self-awareness that an advertisement hit home), invent pithy, creative phrases, etc.  These things are not unique to marketers.  I am not going to claim that technical CEOs learning marketing is the equivalent of marketing CEOs learning development.  They simply are not.

That being said, the recurring theme that CEOs and entrepreneurs should avoid hiring marketers, that a marketer only “creates web sites, corporate presentations and sales materials… [and] hires a public relations agency to refine the positioning and to begin generating early “buzz” about the company,” and that in the end, CEOs should formulate marketing strategy themselves, is misguided.

This is not the 1990s.  High tech marketing people don’t have backgrounds in retail window displays.  High tech marketers’ primary ambition is not running a Super Bowl ad.

I am the first to admit that marketing can be a nebulous concept, a vast space that includes smarmy hucksters, spammers, tin men, and all those “want 16K followers for free” tweeters you have in your DM bucket.  I get that.   But I also get this:  1) specialization of labor was fundamental to the rise of capitalism; and 2) you can’t scale if you don’t delegate.

The point is this:

CEOs and technical entrepreneurs need to be better educated about marketing not so they can formulate strategy or do it themselves, but rather so they can make the best hiring or outsourcing decisions and know how to evaluate performance.

When formulating a problem team and solution team, or otherwise rejecting traditional “product development” process for sales and marketing (concepts I heartily recommend), a decision to not hire a marketing (or sales) executive is arbitrary and reflects a fallacy of cause and effect reasoning.

Not hiring a VP of Marketing because all marketing professionals practice antiquated marketing methods is equivalent to not hiring a VP of Engineering because all engineering professionals practice waterfall development methodology.

Don’t conflate titles with roles; hire the right person for the job.  Technical CEOs are confident in their ability to either direct engineering themselves or to hire the appropriate executive to lead that team.  Likely, the CEO will choose to hire someone who is  philosophically compatible.   The same approach should be taken with sales and marketing executives.  A CEO, however, doesn’t need to be able to do marketing or formulate marketing strategy, but must be able to espouse his or her philosophy and in order to do so, needs to understand something about marketing!

One purpose of this blog is to help educate CEOs and technical entrepreneurs about marketing.

Let me know how I’m doing.    Tell me what you’d like to learn more about in comments.  Or Ask me a Question.

Everyone has heard of the “elevator pitch” and all entrepreneurs know they need one. Right? I’m talking about the ability to tell your business story in the time it takes the elevator to get the floor where your audience will egress. While everyone knows they need one, the confidence imbued in entrepreneurs — necessary to be an entrepreneur — often results in the overconfident belief that the pitch will magically flow when the time comes.

While I’m sure this sometimes works, the strategy is a mistake. A good elevator pitch can mean the difference between getting funding or not, forming a relationship with a key ally, or even closing a customer. Frankly, you simply don’t know how valuable that person you’re talking to might be.

So how to develop a great elevator pitch? Surprising, too, is the lack of familiarity with Geoffrey Moore. Amazingly, Moore’s Crossing the Chasm is still relevant, is still considered the “marketing bible” 18 years after its publication. I highly recommend this book to all entrepreneurs.

[There are, of course, significant criticisms of the Chasm model. As its name suggests, the book focuses on the "Crossing the Chasm" stage of corporate development, when businesses must transition from selling to early adopters to selling to early mainstream customers. As Steve Blank points out, most businesses would be happy to ever achieve the level of development where the chasm was in sight. See this earlier SANDIOS post for an introduction to Blank's customer development methodology.]

In Crossing the Chasm, Moore provides a positioning exercise, with examples, that helps produce an elevator pitch. A powerful elevator pitch must include these components:

• Who your customer is
• Why they need your product, i.e., the pain you are solving.
• The name of your product (or web site)
• Your primary benefit to the customer, i.e., the compelling reason to buy, and
  
• Where you fit in the marketplace vis-a-vis the competition
  

It seems straightforward, but is harder than it looks. People often confuse benefit with differentiation and want to restate the “why?” when stating the compelling reason to buy. Here it is in Moore’s parlance:

For (target customer)
Who (statement of the need or opportunity)
The (product name) is a (product category)
That (statement of key benefit – that is, compelling reason to buy)
Unlike (primary competitive advantage)
Our product (statement of primary differentiation).

Let’s try an example:

For blog readers who like to follow embedded links in the articles they read, Que-It is a bookmarking site that provides a 2-click method of saving links to articles you haven’t seen yet. Unlike existing social bookmarking sites designed to save articles you’ve already read, Que-It creates a simple “que” of links for users to read later.

Initially, the pitch may come out clumsy and a bit unwieldy. Your final pitch emerges once you are able to incorporate all the components into your manner of speech.

Give it a try and if you’re brave, put your example in comments!

Presumably if you are committed to the principles of customer development, you are already committed to “getting out of the building.”  Before you can interview potential customers, however, you have to find potential customers to interview.  Unfortunately, there are no magic bullets.   This is painstaking work.  Just as with other portions of the customer development model, to find early adopters you make assumptions, test, and iterate.  If you are having trouble getting started, try these steps:

Step 1. Profile your Customer

Write up a description of your ideal mainstream customer.  Are they male or female?  How old are they?  What do they do for a living?  Are you targeting them as a consumer or professional?  Are they online?  Where do they hang out?  Where do they congregate offline?  How do they spend their day?  Describe their personality like?  What are their hotbuttons?  Where do they fit on the technology adoption curve?  What technologies do they use?  Late adopters of social media, for example, may just now be heavy users of e-mail.  Include as much detail you want, letting your creativity guide you.

Re-read your description and remove attributes that are not unique.  In other words, if they are male or female, then their sex is not a differentiating characteristic.

Step 2.  Brainstorm Locale

Brainstorm how to reach these users.  To state the obvious, users who are not active online, are not likely to be reached online.   This is the whole point of “getting out of the building.”  Don’t build an online strategy for reaching offline users.  If your potential users attend networking events, then that’s where you’ll have to go.  You have to be clever about finding them!

Andrew Chen has a great post on using surveys and Craigslist to talk to customers.  Note, however, that posting on Craigslist or buying ads on Facebook won’t work if your potential customers don’t use Craiglist or Facebook.

Don’t consider your method yet, consider where they are.  Have you thought of:

Your network -> Some here may also be biased, but those 2 or 3 degrees away are likely to offer real answers.

Social networks -> For b2b, have you considered LinkedIn groups?

Your blog readers

Networking events

Web surveys

Customer registration cards (ha ha)

Store fronts -> stand out in front of Trader Joe’s with a clipboard!

Talk to your customer’s customers

Database, e.g., Hoover’s or Lead411

Initially, the idea is to cast a wide net, because you really don’t know the best place to find your prospective customers.  There are no wrong methods, if the end result are users who understand the problem you’re trying to solve.  I was speaking with a colleague in Shanghai on the recent Geeks on a Plane tour, who expressed some consternation over the fact that he had found early customers through PR (actually a newspaper interview), which is verboten according to the customer development model.

Models are only that.  There are no rules, only methods to acquiring answers from the customer.  If a magazine article (not, BTW, the result of a PR campaign), puts you in touch with hard-to-reach potential customers (in this case the Chinese government), then that is valid customer development.

Step 3.  Who determines how

Your endgame is an interview.  You want to speak to your customers in order to confirm your assumptions about their need for your product.  You’re not selling, you’re listening.  You are not gathering feature requirements, you are gathering understanding of their pain.  You do not ask leading questions, you ask open questions.  You not to cajole users into contributing to or beta testing your product, you learn what it would take for them to pay you for your product.

The method you use depends on the person.  Surveys are used to provide you a sample, from which you cull early adopters.  Remember, your objective is to interview the early adopters.  Though it may provide you valuable information, the survey is not the endgame.  The interview is what you are getting to.  For potential customers whom you have identified via phone call or through in person networking, you need to setup a meeting, preferably in-person.  Tell them that you would like to conduct an informational interview or you are doing research and that the meeting will only last 15 minutes, and that no selling will be involved.   Be sure to keep yourself honest!

At this point, you are satisfied to be speaking with any potential customer, whether or not they represent early adopters.  Remember, you are testing each of the assumptions comprising your profile.

Profile 1 -> has pain? -> if no, iterate to Profile 2

->Locale 1 -> if yes, I can reach them through Craigslist?  -> if no, iterate to Locale 2

-> if yes, etc.,

You must have a concise set of objectives for the first interview.  Remember, you only have 15 minutes.  You must learn:

• is problem assumption valid
• are current solutions insufficient
• does your solution sound plausible
• is the person I’m speaking with a potential early adopter

Step 4.  Identifying the early adopters

Simply put, early adopters have these three determining characteristics: they understand the problem you’re trying to solve are passionate about finding a solution, and if your model calls for it, are willing to pay.   They do not have to be passionate about your solution, but recognize that nothing out there today adequately solves a problem that is very important to them.

You learn valuable information from all your interviewees, but are happiest to discover early adopters.  Hopefully you can establish a long term relationship with them, since they will help you build the right product and teach you how to market and sell to them.  More on that later.

Where have you found your early adopters and how did you find them?   Let me know in comments!

The two key principles that tie the threads of my career together are customer development and project management. (One could probably look at all of life this way, too.)

Two epochal moments happened in my career at one company, Tumbleweed (now part of Axway), that helped me consciously acknowledge these two principles.

• I learned from CFO Joe Consul that what I had been doing for years was actually called project management.  (Yes, some of us are slower than others.)  I was able to structure and formalize what I was doing, which allowed me to become more efficient, teach others, scale, etc.

• I learned from marketing that although I was an IT Manager, my views on how to sell to IT Managers (our target market), was not necessary.

(I should mention a third moment, because it was a pivotal for my learning.  I learned from CEO Jeff Smith that passion is a key (though not sufficient) ingredient to success.  Jeff was out to change the world and he in infected us with his enthusiasm.)

Tumbleweed was an interesting ride; it reached the highs and suffered the lows that all businesses that last 10+ years endure.  A lot of mistakes were made, and a lot of lessons learned.   There were many success stories, too, and, unsurprisingly, lessons learned there, too.  I saw evidence of certain elements of Geoffrey Moore’s  Chasm, as well as in retrospect, a lack of customer development.

Not to fault anyone, but the late 90s saw a lot of customer defumblement.

Steve Blank’s presentation of Customer Development is persuasive.  Eric Ries’ Lean Startup, combining customer development and agile development principles is even elegant.

The simplicity of necessity masks the complexity of execution.

Whether internal or external, formally defined or not, no matter what you are doing, you have a customer.  Whether explicitly defined or not, you also have at least one objective associated with your customer, e.g., make them happy, accept their money, increase their market share. To reach objectives, you must execute on a carefully-crafted plan; a carefully-crafted plan that you must defenestrate the moment you conclude it doesn’t work.  Hopefully your plan includes post-defenestration steps.

Steve Blank @ startup2startup joked that, to put it mildly, The Four Steps to the Epiphany, is a difficult read.   But customer development isn’t hard because Blank’s book is difficult to read.  Customer development is hard because the answers to the questions that will test your assumptions are difficult to come by.   As any project manager who has ever had to “gather requirements” knows, customers don’t know what they don’t know.

The customer is not always right, but they do have the last word.

It’s your job to empower and persuade customers to act in a way that achieves your objectives for them.  But how do you know how to get them to act? You can guess. You can hard sell. You can ask. You can lie.

If you go about empowering and persuading the wrong way, you will lose your customer. You will lose your customer because of some combination of:

• You never actually located your customer.
• Your objectives for the customer were not clear.
• Your tactics for achieving the objectives did not match the  customer’s behavior.
• Your process for “listening” to the customer was wrong or incomplete.
• You failed to execute.

A disciplined approach for web-based products allows for faster learning, but for “offline” products, customer development is a particularly meticulous and  time-consuming process.

Here are some customer development hurdles entrepreneurs and executives need to overcome:

• A dislike of “cold-calling” potential customers;
• The propensity for selling, not listening;
• Habitual requirements gathering, instead of learning the pains;
• Over dependence on surveys;
• Reliance on focus groups, not interviews;
• Belief that past experience guarantees future;
• Basing conclusions on personal narratives.

I’m sure there are more; feel free to share in comments.

Failure breeds success. Fail fast, Fail often, or fail early, but just fail!  That way, you can be sure VCs will respect you in the morning.

It is interesting to me that a concept that seems precise – failure — can actually have a variety of meanings.  A story passed around a campfire loses its original meaning because words have different connotations depending on context.

Failing fast, early and often without learning from your mistakes — without a process for learning — is merely falling flat on your face.  The cheer “failure breeds success” is a self-help gimmick, typically called by MLMers leaning upon metaphysical beliefs that have nothing to do with iterating toward success. One doesn’t learn from failure per se, but rather from mistakes.   (Only “mistake fast” doesn’t have the same ring to it.)

Compounded mistakes may lead to a business failing. I would never wish a failure of one’s business on anybody.  (Or at least on any true entrepreneur.)    Though as Steve Blank said last night @startup2startup, the main reason businesses fail is due of a lack of customers. It is true that if your business is going to fail, you may want it to fail fast.  (Like before it’s even started.  Hence customer development gut check #1.)

Otherwise, you don’t really want your business to fail fast.  You don’t want it to fail at all.

A product feature not implemented correctly?  “Fail fast” and fix the feature.

A buyer who doesn’t have budget for your product?  “Fail fast” and find a different customer.

A landing page form with high abandonment?  “Fail fast” and fix the form.

A VC who advocates hiring CEOs with a good track record of failure. “Fail fast” and invest your funds elsewhere.

Can we change the mantra to Fail fast, fail smart?

First, even if you are not seeking funding, go through the exercise of creating a pitch and presenting it to others.  The process of creating a good pitch forces you into highly focused, critical thinking that can only serve you and your business well.  At the very least, it’s the beginning of a sales pitch, or a partner pitch, etc.,   In fact, it’s not a bad 1st exercise for gut check #1.

Second,  If you have a product idea and your are sharing it with people — whether your family, MBA buddies, ex-CEOs, angels, or VC’s, here are a couple of pretty solid rules of thumb to keep in mind.  Some say there are 1/2 dozen major religions in the world, some say there are 10s of thousands of religions in the world; in fact there are several billion religions in the world.  Which is a long way of saying:

• the number of distinct ideas for how to improve your business idea = # of people in room – 1;
• most people will focus on your business model, not your vision;
• the more important your audience, the more likely they’ll interact as if they’re contestants on Funding Jeopardy!  (“What is, have you considered the complete opposite of what you’re proposing?”)

Next, while trying not to repeat the same “top 10 investor pitch faux pas” you can find elsewhere, I want to share some of the most common problems I see.  But first, here are ones that you’ve probably already seen but are worth reiterating:

• there are too many slides;
• there are too many words on each slide;
• there are too many fonts, to many different text sizes, too many colors;
• there are too many random photos or graphics, shrunk too small, that don’t say anything relevant;
• multiple complicated graphs on one slide are a multiple too many.

Okay, now onto some finer points:

• Each slide has an objective.  Don’t stray from the objective.  I recently worked on a slide that listed a mixture of benefits.  Problem is that it was a mixture of stakeholders:  customers, influencers, and even the business itself!
• I work harder, been there done that, we’ll work smarter, I’ve done it before, etc., are all great bona fides, but none of them represent a business strategy.
• Complicated ecosystems require a simple illustration.  Trying to describe a value proposition for a myriad of players, most of whom will never give you one shiny penny may be relevant, but is, to say the least, really confusing. Paint the big picture!
• You know that jargon you’ve been using for the last 1/2 dozen years with your colleagues deep inside your technology clique?  Uh, no one else gets it.  So don’t use it.
• Go-to-market plan means the specific things you and the resources you can afford will do to find customers, convince them to part with their money, and accept their payment.
• If there’s anything you want your audience to understand, it’s this:  [Before you] must be more painful than [after you + your cost + risk of change]*some inertia coefficient.  (Your inertia coefficient is highly dependent on your segment.  Is your buyer class resistant?  Late adopter?  Politically influenced?  Powerless?  Masochistic?)

There are some good templates out there, some of which, however, you may want to share with discretion.  : )  My template is below.  Let me know what you think and also, reach out if you’re struggling with your pitch.