What Startups are Still Doing Wrong and How to Mingle With Investors.
Over 120 events…
Five days of total mayhem…
And a fair bit of demos, keynotes, parties and after parties.
Sound like any conferences you might have been to lately?
Sounds like Startup Week San Diego to me.
Over 3,000 founders and entrepreneurs attended San Diego Startup Week this year and I’m happy to have participated as a track co-captain, speaker, attendee, and startup. I
ran around downtown San Diego for FIVE DAYS in the only attire that is appropriate for a Head of Growth whose company is looking for funding:
My company T-shirt…
After speaking at 2 events, hosting a couple more, handing out over 100 coupons and business cards, and tabling for Rebrandly at the Startup Fair, I can honestly say:
And I learned a lot from the experience.
So here are the 7 things I learned (and you missed out on) from Startup Week San Diego:
Being Funny on Stage is Hard
I prepared a talk… And usually I just put the bullet points down and wing it… But for some reason, I wanted to make a silly segment of my talk, which was pretty much word for word scripted. Skip to about the 8:30 minute mark in my talk titled “Hello (Startup), World”, check it out:
Hello Startup World. Opening event of San Diego Startup Week, live
Posted by Derric Haynie on Monday, June 13, 2016
And here’s the slide deck for the talk, to make it much easier to follow along:
I think I did pretty well with the talk in general, threw down some random knowledge and helped some people afterwards.. But do feel free to give me your thoughts in the comments, because there is still obviously a ton of room for improvement. I’m working my way up to being a key note speaker in the next 30 months, so good is not good enough. Criticize. Please. Your Takeaways: Your entire goal as a startup is to get to a spot where your LTV – lifetime value – is 3x your CAC – cost of customer acquisition. In general, if you can prove those numbers, you will have a profitable business and then the question is just how do we get more customers. Find your OMTM – One Metric That Matters. You need to have a meaningful metric drive your daily decisions. “Signups” is a bad metric. It always goes up and provides no context. Signups per week isn’t even a good metric, as you still have nothing to compare last week’s signups to… Now signups per week over week is a decent metric. It tells us weekly growth. According to Dennis Yu, you must always be comparing two opposing and quantifiable data points in a key metric, otherwise it’s a meaningless number. Think about how to track and report on your most valuable metrics on a weekly basis.
VCs are People Too
I’ve never seen so many investors in my life. I was fortunate enough to run into a few throughout the week and got to know more about their challenges and what they go through in daily life.
I mean, can you imagine every scrub with an idea coming up to you and asking you for money?
Every… Single… Day?
It’s gotta get old, right?
But at the same time, my company is raising funding right now, and there’s not a second to waste…
Where do you find the balance between being super annoying and actually trying to find a strategic partner?
For me, I specifically had more of an “inbound” approach to my conversations with VCs.
I talked with them, heard more about what they did (I was “authentically” curious), and the only thing I did that was a “push,” was to let them know that my company is raising funds.
If they asked for a pitch, I gave it.
If they asked for a card I gave it. If they didn’t push, I changed the subject or moved to another conversation.
Your first response to this might be, “But what if you missed a huge funding opportunity.”
And that’s the knee-jerk reaction: that you have to get your idea in front of them and sell, sell, sell.
But we’re at a networking event. Not a pitch. We’ve got drinks in hand and smiles on our faces…
I can’t think of anything worse of doing at that moment than annoying another human being in hopes that they will give me a 6 figure check. And it’s really just not going to happen.
I’d rather make a friend, start a long term conversation, and see what happens later. If they remember me then I’ve got a chance.
If I give them pitch #8 of the day, then I’m another flower on the wall.
Your Takeaway: Always be closing. Nah! Always be opening… Start conversations and learn from others, rather than shoving your business card down someone’s throat (and having it end up in the trash).
Mark Suster Likes Cheetahs
This guy is really quite impressive. I recorded part of his keynote here:
Mark Suster live at Symphony Towers for the keynote of San Diego Startup Week. #SDSW #StartupSD
Posted by Derric Haynie on Tuesday, June 14, 2016
Here’s one of my favorite lines (paraphrasing): “Outsourcing product development for your company is like outsourcing the kitchen at a restaurant. Don’t do it.”
It’s so true.
When I talk to entrepreneurs who are building a tech app and they tell me they hired a team in India to build out their prototype, their stock goes way down.
He also talked about the criteria VCs are looking for, and why it’s a lot more complicated than most entrepreneurs think.
One negative, he misused the word “Lean” which, if you know me, is a huge pet peeve of mine. It’s not cheap Mark, it’s structured learning.
So close to perfection Mark…
Your Takeaways: While it can be OK to get to MVP status with an outsourced team, it’s less than ideal. VC’s are only for highly scalable, truly disruptive technologies that face massive markets. They probably aren’t for you.
Startups Still Haven’t Figured Out Customer Before Product
I came to this conclusion at the Cofounders Meeting Cofounders event, where I listened to 5 people that had phenomenal ideas and were domain experts, tell the room how they needed someone to build their app.
It just reminds me of the line I said in my talk: “We’re all on our way to becoming unicorns… We just need $10Mil, a great team, and a whole lot of traction.”
Bad news: Your ideas are still worthless!
The ideas in that room were great, but why should anybody believe that you can actually get it done.
If you start with traction – getting users and paying customers – and prove out your minimum viable market, then talent, and investors, will come flocking to you.
To be fair, the beginning is very hard.
You have no name…
It might be your first time…
And you “know” you’re going to succeed.
Just as I thought in the beginning…
Your Takeaway: Get customers, talk to them, get them to pay you before your product is built, build an audience around the idea of your solution, when possible, and prove out a minimum viable market.
Do not come up with an idea, hire a developer, and think you’re going to build an amazing product. This is a recipe for failure. And even if it does work, it would have worked better the smarter way.
Running a Nonprofit Gets People To Do Things For You
When I talk to people as an agency owner (at my old job at SplashOPM), and ask them for an upvote or social share, I hear crickets…
As a marketing tool here at Rebrandly, I get some responses.
After all, it’s a pretty cool product.
Even as part of Startup Socials, a global events company I organize events for, I get slack and hesitation from people when asking for help with sharing content, pitching in, or donating space for an event.
But at Startup Week, people really come together.
And I think this speaks a lot to the authenticity behind a brand. When you know everyone isn’t getting paid, and we all have one mission: To unite the San Diego startup community
Venues will donate their space, world class speakers will donate their time, and people come out of the woodwork to volunteer.
Without getting too sappy, it really is something special to see. (And my evil side gets a little frustrated at how easy they make it look.)
Your Takeaway: Authenticity initiates virality. You can’t fake it, buy it, or outsource it. You just need to “be” authentic, whatever that means for you.
Startups Still Can’t Explain Their Business Simply
I watched 7 demos and 7 idea pitches, as well as talked with dozens of entrepreneurs…
Getting that “elevator pitch” down is crucial. You’ve only got 60 seconds to impress someone, make it count.
In my opening talk, I made fun of Startup Week San Diego’s own phrase of empowerment:
And the truth is, this is a good tagline for the company.
However, it has nothing to do with what people, as individuals, would ever say to one another about Startup Week.
Which is why I made my own definition (censored): Do you see the difference between the two?
One is corporate and probably helps get sponsors, but not signups.
The other is customer facing and should engage the average attendee a lot better.
Your Takeaway: Explain your value proposition simply. Avoid buzzwords when possible. If you need to have a “corporate” facing tagline (like maybe you run a marketplace app with end users and service providers), try to only face that towards the proper audience, and not towards the whole audience. Think about who you’re speaking to, and speak their language.
Facebook Live in a Group Is a Bad Idea
Obviously it depends on the group…
But I went live for over an hour on the Growth Marketing Conference group – a group I am a frequent contributor to and that is sponsoring the talk I was giving – and only got 64 views:
Startup Socials San Diego workshop on user acquisition. #sdsw #sdtech #startupsd
I usually get around 200 when on my personal account (that’s not a brag, it’s actually not impressive at all considering I’ve been published on talking about Facebook Live).
I think the problem is the group size. This group only had about 500 members in it, while my personal page has about 1200 friends.
Your Takeaway: Carefully consider where you go Live on Facebook and don’t underestimate the value of staying on your own personal page.
Bonus: Create a “Business Contacts” List in Facebook and grow that list aggressively so that you have a niche audience to go Live in front of.
San Diego Startup Week was a ton of fun, but also a ton of work.
Rebrandly got some great exposure and we were even able to do some user testing and videos, which gave us phenomenal feedback.
Conferences can be great events to get volunteers to try out your product and learn what’s broken with your UI/UX.
I enjoyed speaking and sharing my thoughts with so many entrepreneurs. The state of the San Diego startup community is growing fast.
Companies are getting funded, and products are being built. I do think we are still a ways behind in terms of growth and traction, but that’s why Rebrandly let’s me stay down here in San Diego – so that I can help grow this community alongside our product.
What about you? Did you attend San Diego Startup Week? Do you have any takeaways you’d like to add? Or questions? I’d love to hear your thoughts in the comments below.