Someone once said that any news is good news, but I’m not sure if Facebook would agree. In the last week the social media company has lost two key executives, live streamed the murders of innocent people in New Zealand, there are talks of criminal investigations into the data scandal, and its stock was downgraded by a Wall Street analyst. All of which resulted in a loss of approximately $37 billion in value.
By now most of you have read about the latest of three related scandals to hit elite academic institutions this year. The latest involves a fixer masquerading as a college admissions counselor to the rich and famous, Rick Singer. Singer claims to have helped more than 760 children of the privilege change test scores, pretend to be elite athletes, and outright bribe their way into top universities.
Back during the Internet Bubble of the 90’s I remember having a conversation with a friend who was considering an investment in Cosmo, the NYC food delivery business. He wanted to know my opinion and I shared with him that I had familiarity with grocery delivery and while I was a fan of the service personally, I was not a fan of the business model.
Yesterday, I was able to venture out on my own for the first time in more than 3 weeks because of my surgery. I settle into a nearby lunch spot and opened the Saturday WSJ and the lead article was, “Apps Send User Secrets to Facebook.” A few days earlier I turned on the news only to hear that Google shipped a product that included a hidden microphone, but neglected to indicate it on the packaging. To quote Vince Lombardi, “what they hell is going on here?”
I seem to be asked every week about lone entrepreneurs versus teams of entrepreneurs and what my view is on the backability of each. While I have not seen any hard data on the topic, the empirical evidence appears to support that investors prefer teams. Now, I’m sure that there are examples of where investors have done well investing in a sole entrepreneur. However, I would venture to say that even in these cases the investors worked diligently to build a world class team around the entrepreneur.
On the final day of The Entrepreneur’s BootCamp we have each participant deliver a three minute pitch. No slides, notes, or props of any kind are allowed. Just you and three minutes in which to engage the audience and explain the target audience and the problem, your solution and how it gets the job done, why it is unique, and how you make money. It may seem a bit unfair, but as it turns out three minutes is enough time to convey the value that your idea creates for the target market at the intersection of desirability, feasibility, and viability.
I had a conversation recently with an old friend who has joined a new startup. His company is considering making a pretty big investment in its employees. He had remembered that I started my career at IBM some years ago and often noted how good the training was. At that time, we’re talking mid 80’s, the company invested countless hours and dollars in fairly comprehensive sales, service, and technical education. I spent the first year and half attending monthlong courses in IBM’s Atlanta and Dallas education centers. When I was back in NYC the company paid for me to take classes at the NY Institute of Finance.
Many years ago I sat on the board of a company that made tiny suture anchors that are used to reattach tendons in the hands and shoulders. It was rare not to attend a board meeting where an ox tail would be sitting in the middle of the table awaiting a demonstration of a new technology to fix torn tendons or repair ruptured discs. Little did I know at the time that I would end up with 3 of these anchors in my right shoulder.
This is Part III of a four part series.
Approaching the Market
Preparation as described in Parts I and II of this four part series will help to improve your chances of success when it comes to securing money from investors. Here are a several items to consider as you begin to schedule meetings.
I field a lot of inquiries from founders wanting advice and assistance with their pitch. An awful amount of preparation and perspiration goes in to creating a presentation that most of the time no one ever gets completely through. Strategy development through PowerPoint iteration is a terrible way to attempt to build a business. Your time would be better spent on developing and testing the business model.