Photos by Brian Menda
A group of successful, tech-minded individuals with varied career experience explained everything one needs to know to achieve greatness within a startup. The fear that’s accompanied with any entrepreneurial effort was first discussed, but that quickly gave way to empowering advice and lessons learned through a combined 76 years spent in the industry. I literally just looked up the panelists on LinkedIn to compute this figure and think it’s interesting to note, because other industries like to boast in this loosely quantitative manner. {These are all people who are still working in tech and giving back to the community by supporting and encouraging others.}
The panel was moderated by Amy Larrimore, and some of the following questions were prompted by her, others by the attendees via twitter using #ptwpc. This was a talk created by and catered to women. Nonetheless, the valuable information shared and discussed is beneficial to all.
What is the most important part of building a company?
Julia Shapiro says it depends on the stage. If it’s very early on, you must find people who are the same kind of crazy and willing to take that leap of faith with you. There’s “a very different type of fit you need at the very beginning. I found fellow quirky people. Some people have come and gone, and it’s different when people haven’t been there since the beginning.” She suggests the book Slicing Pie for guidance and mentioned cliffs in contracts, which was obviously a new concept to many in the audience, including me. I stopped the conversation to ask her to explain. It’s a way to give someone a slice of the pie only if and until a certain goal has been met. If that goal or milestone is not reached within a certain time frame, the other party no longer has equity.
Tracey Welson-Rossman says it’s like going to war, “If this person doesn’t have your back, there’s going to be crap politics, so GET OUT!”
Kathleen Cohen says it’s important to “Establish your DNA early on, but you can’t copy the DNA and culture from another company.” Ellen Weber once tried to build in culture from a lax online company to a more corporate structured one and eventually learned that what works for one company won’t necessarily work for another.
How should you pitch your ideas?
When asked about Alex Osterwalder’s Business Model Canvas, panelists surprisingly deconstructed how to efficiently formulate and write a plan to present to investors. “You can do it with power point. I’m not going to read a 35 page business plan anymore,” said Ellen Weber. She went on to state that parts should be left untested, but enough to give a potential investor a clearer picture.
Are you in a very early stage? If so, an investor may fund you to test your first hypothesis, but you have a much stronger case if there is some data available. Another option is to ask for funding for different milestones. Break up your goals into phases.
Be as clear as possible. Sometimes, when you’ve had an idea in your head for so long, or worked on a problem, you might not get your product across to someone who’s never heard of it before. Also, entrepreneurs don’t always understand that investors are putting money into the company with the hope that they will make money. Remember this and be prepared for the question, “What’s the exit strategy like?”
How do you get the money?
Not too shockingly, this question came from someone in attendance. Ellen was clear about persistence, valuing introductions, and going where investors are. Succinctly and clearly present the problem you’re trying to solve, how you will solve it, and why you are the person to solve it. “It’s all about metrics, credibility, and proof of concept.” Data is key and knowing your minimal viable product like the back of your hand is absolutely necessary. Be able to explain it in and out.
Another valuable suggestion was to practice pitching your business model to someone not in your market or space. Running it by others before officially pitching will help work out the kinks and provide pertinent feedback.
Cast a wide net. One of the Julia’s biggest investors came from a cold email. They were shocked when they got a response from someone in Silicon Valley, but they learned the importance of not limiting themselves.
How do you make sure your idea doesn’t get stolen?
The topic of NDAs came up quite a bit and it was clear that the panelists unanimously agree that a non-disclosure agreement is unnecessary when pitching an idea.
Tracey says, “I will sign your NDA, but don’t send me 3 pages of one.” That’s a redflag and indicates that the founder is not going to go out and talk to a lot of people about it, which is how you get the best feedback.
Julia says, if this is your very first pitch, “unless you have the cure for AIDS or cancer, no one’s going to steal your idea.” People tell her all the time that they had the idea for her company years ago, and she’s gotten some accusatory stares, as if she stole their idea. The fact is – it’s all about execution! They never did anything with idea, but she has. Check out Hire An Esquire and you’ll see how well she implemented and developed an idea into a functional, financially-backed company.
“On the investor’s side, if we ever stole it, no one would EVER come to us again, so we would NEVER do that. NO idea is so new and different that they’ve never heard of it,” says Ellen. Although she warns not to “give away the very secret sauce.”
When asked what not to divulge, Julia says, “if they’re in your space, downplay anything you’re working on if someone else is on similar footing to you,” but Tracey disagrees.
“There’s nothing [to keep secret]. We’re looking to partner. We are like your priests. We have to know everything that’s going on, so that we can advise you. Is this something that you can do? A lot of folks that come to us are not technical, so they don’t know what they really can [accomplish], so we can build the right thing. If you’re not giving me everything, it’s gonna be harder for us to help you.” She gave an example of someone who wanted a product similar to Netflix in 3 months. Umm… Anyone with experience building something from the ground up knows this is not possible. “Once you hire us, we will sign a master services agreement with an NDA in it.”
“That’s good business,” and the entire panel nodded in agreement.
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