The just completed inaugural TechCrunch40 conference provided a great opportunity for entrepreneurs with startup companies to demonstrate what they are creating and developing. Regardless of the size of your business or whether or not you are in technology, there were many lessons worth learning which emerged from the conference.
- First solve a problem
- Listen to your users and then use what you learn
- Hone your elevator pitch
- Don't speak in jargon, speak in human
- Put things in context
- Understand your audience
- Respect your audience
- Don't be so defensive
- Don't turn down free research
- Decide if the opportunity is right for you
On a panel titled: "Humble Beginnings" a few wildly successful entrepreneurs offered a few thoughts. Chad Hurley, a co-founder of YouTube, encourages entrepreneurs to focus on solving a problem versus creating a business. He says you should be able to use your product to solve your own problem.
Even if the problem you solve isn't your own, you should feel somebody's pain or seek to make their life better with your product and service so David Filo, a co-founder of Yahoo, urges entrepreneurs to stay close to consumers, gather data about what they like and dislike and then use that information to evolve and improve your offering.
As I watched the presentations, checked out companies in the "demo pit" and spoke one on one with entrepreneurs, some additional key lessons stood out to me.
You need to be able to both know your business thoroughly as well be able to step away from that knowledge enough so that you can make a tight, clear presentation of what it's about and why it would be of interest to anybody else. I noticed that some people did a great job of showing off their business if they had 15 - 20 minutes to explain and then couldn't get the same message across in their 8 minutes on stage. Others had the opposite problem and made energetic and showy demonstrations but left you wondering exactly what it is that they do.
Lose the jargon. Nobody needs to hear that you are going to exploit the long tail or allow the ability to monetize anything. Potential users and investors alike are human beings with needs, wants and problems and they have friends and family with these issues. I was struck by how often the expert advisers prefaced their comments about presentations with lines like "as a father" or "this service solves a real problem I have." Having a business model is important but meaningless unless you solve a problem or offer a recognizable benefit. Speak to the heart as well as the head.
Stop insisting your idea is original unless somehow it actually is. Even then it still has to solve a problem or provide value. Being unique is not in and of itself a benefit. And, probably someone has tried something like what you are doing before. It's better to explain the history of what has gone before you and how you are better or serve an under served niche. And worse, when it is pointed out to you what other businesses have offered what you appear to be offering, is to defensively claim that you are completely different and will succeed where the others have failed. Be proactive rather than defensive if you want people to listen and have an open mind.
Know your audience. Many of the companies were from outside the United States and I would hazard a guess that most of the audience was American. However, with several of the companies it was clear that their pitch was either very US centric or they did not highlight the utility to the US market. Mobile phone services are a example of where this is a problem. Services, phones and standards are very different in the United States and everywhere else so when describing your services you need to make it clear that you understand the distinctions and explain who the consumer target is and how it will benefit that target. Mobile services that involve SIM cards are going to target a different audience in the US where many consumers carry phones that don't use SIM cards than outside the US where popping in a SIM card is common.
Don't underestimate your audience. It is important that you demonstrate that you understand who the target buyers and consumers are for what you are offering. If you are not the target it is extra important that you convince the audience that you know what you're talking about. If you are a middle aged man offering a product or service targeted at teenage girls you need to show that you understand real teenage girls and not some cartoon version of them. One company demonstrated teen girl avatars named "Moonbeam" and "Giggles" who spoke in a way not heard out of the mouths of any living breathing teenage girl I've ever known. I was a teenage girl, I have a just out her teens niece and I have been in the real life presence of teen girls post "Valley Girl." And so has everyone else in the audience and on the judging panel. When the presenter was called on this, his response was that he used a dumbed-down voice over talent for the benefit of the conference attendees rather than what would be used with actual teen girls. That said to me that he didn't trust or respect the audience enough to show us what his product actually is but rather just wanted to sell us on the perception that he could make money.
Don't fall so in love with your business that you can't answer legitimate questions. One of the great values a conference such as this offers is the ability to network and learn from both your peers and those who have gone before you and failed as well as succeeded. Several of the entrepreneurs lost opportunities to learn when they busied themselves defending their business model rather than shutting up and listening to outsiders. Angrily insisting to MC Hammer and one of the key players from Napster that you better understand the music industry revenue model and opportunity rather than listening to what they are saying is probably not useful and is a waste of the time you have at the conference. Expert adviser/judge (and BlogHer 07 Conference keynote speaker) Esther Dyson made an excellent point when she noted that before she would actually make a funding decision she would want to know if the entrepreneur had ever failed before and what they had learned from it. So don't throw away an opportunity to learn from people who've already failed (and failed spectacularly) and have lessons to teach you.
Don't ignore potential customers. One company offering an email organization/productivity service was asked by Esther Dyson if they were considering expanding their offering to her email client of choice. The impertinent young whippersnappers said that her client would be low on their priority list. Aside from the spectacular hubris of dismissing a question from someone who a) is spectacularly more successful than you are ever likely to be and b) someone who could give you funding and advice so that you could conceivably be a fraction as successful as she, to ignore valuable free consumer research is folly. I think the correct answer should have been that the young entrepreneur would look at that portion of the consumer market, determine if and when they could financially and logistically add and support that service and when that determination was made he would be happy to follow up Ms. Dyson's inquiry and let her know.
I heard many conversations throughout the day drawing inevitable comparrisons between TechCrunch40 and the upcoming Demo Conference. Both conferences have similar aims to provide an opportunity to new technology companies to demonstrate their offerings. So what's the difference and how do you choose between similar opportunities a week apart? Stacy Higginbotham at Tech Confidential has an excellent summary:
For entrepreneurs who face this dilemma in the future, or those without the money to attend both events, expect more unfunded startups at TechCrunch, with a focus on Internet companies. At DEMO more companies will likely have money but will also cover a broader range of technology.
Previously: TechCrunch40: It's the Idea that Counts
Coming: A look at some of the companies at TechCrunch40 that I think will be of interest to BlogHer readers