by Seth Temko
I've been running around speaking to a lot of startup people lately and I'm starting to really see a "text booking" trend happening. Everyone is trying to write a textbook for a successful company and then write their own strategies as if it's some sort of playbook. It all starts with "the" crappy investor standard 5 minute pitch.
I was running through something I was working on with a practced angel investor and he said I wasn't following the script. "Script?", I asked. "Yeah", he responded, "You introduce about yourself and 'why you'. You hook me emotionally early with a one sentence summary of your business. You describe how huge your opportunity is. You tell me how much you need." Puzzled I just stared at him. "You didn't do that," he said.
Well, I wasn't looking for money from him. I was looking for constructive feedback. Apparently there isn't a script for that. But curious I started speaking to those I know looking for money from investors and they are ALL following "the pitch script". It's required by all the angel groups and investor pitch forums.
And I think this is where it all starts to get stupid because it has opened my eyes to the bigger issue. I think the new round of startup jockeys think that after 20 years tech startups, everything must be kind of formulaic.
So if you have to summarize your business in one sentence you are forced to compare yourself to another company. "We're a virtual McDonald's with digital burgers. We're Facebook meets pro wrestling. We're the Ebay of pure breed dogs auctions." And if you're getting validation from comparing yourself to another company - why not just copy their business model and growth history.
I know it sounds far fetched but I've talked to a couple founders in the past 5 months who are doing just that. They literally have researched their target comparatives to the point of being able to document not just stats on users, conversion and growth trend but company history and trend events related to it. They then compare literally how they are following that path or at least intend to.
My thought is - "REALLY you think that will work". That is just text booking all the successful strategy. That is like reading a history on wars to determine strategy but without all the bad stuff. And it ends up the guys doing this are really struggling. I'm not surprised at all. If you're doing this yourself here's why I think you're dooming yourself to failure.
1) Overcoming Your Screw Ups is Key. A key to startup's success is addressing missed strategy. Large successful companies normally don't document the "shit they did wrong" (if it was before they went public). How we deal with "the shit" is half the battle in startup success.
2) Tech is Measured in Dog Years. The environment that your target company was in at their early stage of develop is going to be very, very different from your current environment. You need to stay in the here and now. Tech moves fast so the past can rarely help you plan the future.
3) Bold is Beautiful. Startups are about doing something new and different. Investors are interested in bold statements, missions and goals. Bold rarely starts with "We're going to be just like..."
4) Quirky is the Next Mainstream. Trends in tech change fast. By the time you build up a business in an already existing "pocket" of accepted "normality" it's probably already peaking. You need to stick with something different and work like hell to get it to go mainstream.
5) Screw the 5 Minute Pitch. If someone says they'll only give you 5 minutes then screw that meeting. This isn't America's Top Model. This is about opportunities, strategies and finding meaningful partnerships. If all you have is 5 minutes then you're wasting hours of my time to just prepare, commute and un-commute from a pitch meeting... fuggedaboutit. They can go "text book" someone else.