A lot can be learned when you shut up and observe impressive people do their ‘thing.’ I know this because I did just that last week when I had the pleasure of sitting in on Techstars Boulder’s highly confidential screening committee
Every year, hundreds of entrepreneurs apply to be a part of the coveted Techstars Boulder program. From those hundreds of applicants, only 45 make it to the second round called screening committee. Its screening committee’s job to listen to each of those 45 entrepreneurs pitch their businesses and ultimately choose 10-12 to participate in the Techstars Boulder accelerator program.
If you’ve seen the show Shark Tank, it’s kind of like that, but more badass.
So there I was, sitting quietly in the corner, making sure all of the product demo videos and conference calls went off without a hitch. In between trying my best not to screw up my job in front of respected movers and shakers in the Boulder community, I was able to observe a process that only a handful of people have ever seen in full.
I sat, I listened and I learned. The process for each team was the same:
1) Arrive at Techstars Boulder 20 minutes before your scheduled time to pitch.
2) As your time draws nearer, you are brought from the reception area to a conference room and ultimately to a set of couches.
3) 1 minute before your scheduled pitch time, you are escorted next to the room full of screening committee members – Boulder Venture Capitalists and Techstars staff – sitting in a semi-circle watching your demo video.
4) S**t bricks.
5) Walk into the room, say a quick hello and start your 4-minute pitch, followed by 5 minutes of questions from the committee.
6) Done. You are whisked out a back door into a hallway, have your picture taken with a life-size cutout of Chewbacca and then you’re shown to the elevators to take you downstairs and out onto Walnut Street.
After hearing 45 pitches and the subsequent comments from the screening committee, I began seeing patterns in what did and did not resonate with the committee members
1) Having a difficult concept.
This may sound counter-intuitive to some, but having a hard idea means that there are relatively few who are going to try to do the same thing, which equals less competition. You can think of “having a difficult concept” as feast or famine. If you can’t execute on the concept, you’re done and out of business; but if you stick it, you could corner a market.
Time and time again I heard, “I like their team, they’re scrappy.” Scrappiness is that ‘do whatever it takes’ mentality some entrepreneurs possess, when they would rather beg for forgiveness than ask for permission. Teams that are scrappy shatter expectations; Techstars likes those people, I like those people, be one of those people.
As any investor will tell you, its all about team, team and team. Companies change, they pivot into different markets and alter their product offerings, but amongst all of that change one thing remains constant, the team. You could be sitting on a goldmine of a concept, but unless you have the team to execute on that concept… forget about it. For Techstars, coachability plays a huge role in gauging whether or not a founding team is up for the task of launching a company. Remember, nobody wants to work with people who refuse to listen; it’s ultimately the difference between confidence and cockiness.
1) Not crunching your market numbers.
Know your market numbers! That means figuring out your total addressable market, or the number of customers who could feasibly use your product or service. Ultimately you use those numbers to extrapolate how much revenue that means for your company if you capture X% of that addressable market. Not knowing those market numbers and what that means for your revenue is bad in and of itself, but it’s also indicative of something much worse, incompetence. Avoid looking incompetent at all costs.
2) Lack of a large market or need.
Sticking with market issues, lacking a large market or need is probably one of the single most prevalent issues with startup concepts. For entrepreneurs, their startup concepts generally grow out of a problem that they have personally experienced. That’s all well and good, but Techstars is in the business of accelerating high-growth startups with huge market potential, not lifting small lifestyle businesses off the ground to chug along at $500K per year. So before walking into screening committee, ask yourself these two questions: A) do I have a large addressable market? And B) is there a compelling need in that market for my product?
3) Failing to communicate your concept clearly.
If at the end of your pitch, “so… what do you do?” is the first question from the committee, you messed up. Before even starting work on your full pitch deck, it is vitally important to nail down your value proposition. A quality value proposition is a one-sentence description of what you do. For my company QuintEssentials, our value prop is, “we are an online, subscription service that delivers personal care items to college students.” Quick, dirty, and most importantly, clear! If you can’t even explain what your own company does, trust me, no one can.
Sitting in on Techstars Boulder screening committee was one of the single most informative experiences I’ve ever had. I feel honored to have played a role, albeit small, in that process. There is no single word of advice that can ensure the success of a startup. That said, being a fly on the wall and listening to highly respected VCs and Techstars staff weigh in on 45 different startup has informed me of hot-button do’s and don’ts to consider on the path to startup glory.