The Demo Day is Dead! Long Live the Demo Day!

It’s time we talk about how and why we do what we do

We need to rethink the demo day. Demo days are so accepted that we never question them. We sit through identical, standard-format, cinema-seating events where startups pitch investors without asking why.

If you’re like me, you’re not an enthusiastic demo day attendee. Unless I’m hosting the event, I’m at the back by the coffee or the beer, answering e-mails, and listening with half an ear. It’s time I got off the fence and proved my love for our industry by giving the format a swift kick in the backside. Here goes.

The format is past its sell-by date

What we do isn’t rocket science and as entertainment goes, it ain’t that entertaining. Television has evolved. Live entertainment has evolved. But since it’s introduction in Europe nearly a decade ago, demo day has not. You can’t sell innovation without innovating at least occasionally.

Let’s start by asking questions

Who are we pitching and why? We say investors, but really? How many investor matches resulted from your last event? And if it’s not investors, then who? And why? And is the cinema-seating, one-pitch-after-the-other the best way to achieve our goal? What if there was a way to let those who want to watch passively do so, while helping those who want to be more engaged?

What does your audience want?

Most of these events are more graduation ceremony than an investor matching. Acknowledge this. What is our audience looking for in our event? Have you asked them? I have and it ain’t what we’re giving them. How about we ask who else in the audience can help our startups? What other kinds of help do they need?

A/B testing, anyone?

Let’s test some assumptions. I say let’s design some of our events to enable the network match. Introduce our teams to as many people in our network as possible. Make as many connections as we can and see what happens. Investors are cool, but so are partners and customers. Lots of types of help can make a big difference for our startups – and for the people who support and pay for our programs.

Inspiration from elsewhere

The fashion industry knows a thing or two about presenting things. Theatre stages seldom serve their purpose, so they use runways. A runway does two things. It gets people as close to the clothes as possible and it gets people close to each other. VIPs get front row seats so everyone can see them – and so they can see everyone. Why not steal their good idea?

Let form follow function

Runway stages can do more to create connections. They help the audience connect. It is easier for the hosts to introduce people to each other when it’s easy for those people to see each other. The audience can also see each other’s reactions to each pitch. They can see who else might be interested.

I’ve tried it and it works

The Swedes are good about trying new things. Earlier this year, I hosted a medtech demo day. During the planning, I was shown around the ‘event space’, which looked a lot like their cafeteria… because it was their cafeteria.

I pitched the runway idea and they went for it. We had the audience face each other. We held a long break halfway through. The audience seized the networking opportunity with both hands and the teams made a lot of useful connections. It worked like a charm.

Let’s try something new

The demo day is a worn concept that needs some love. It’s time we try some new takes on solving the problem we’re trying to solve. Form should follow function, not tradition.

Know Your Business

It helps to know how you create value for your customer

Summertime is perfect for catching up with people and one meeting here last summer really stands out. An engineer and an astrophysicist came to see me with a fire safety device. I like fire engines as much as the next guy, but fire safety tech is a narrow niche of geekery and it ain’t my bag. This product, however, turned out to be much more than a fire safety device and potentially worth a lot of money.

Define cool

I’m a big fan of this Copenhagen-based engineer/astrophysicist combo and I knew they desperately needed to review their value proposition. What it is, what it does, and what that means can be very different things for almost any product. Their fire safety device project took an interesting turn when they shared their conversations with property owners. It turned out the device would remove the need for a second or back staircase in the older apartment buildings common in middle of European cities.

Revenue is cool

Removing the need for a back staircase means that space can be added to the apartments or used to install elevators. More square meters and new amenities both mean more revenue for property owners, a lot more revenue. And property owners are excited about that. Add in that the device could also make it possible to create penthouse apartments in the current attic spaces and it sounds even better.

A new value proposition

By the time we finished our coffee, the two entrepreneurs had a new value proposition. They were no longer in the fire safety business, but were firmly in the “increasing revenue for property owners” business. Adding 2-6 square meters to each apartment – usually in either the kitchen or bathroom – quickly turns into a lot of money. Potentially adding penthouses to existing structures adds even more.

Follow the money

Investors get pitched a lot of ideas and investors aren’t always super imaginative. Helping investors make lots of money catches the imagination in ways that helping them with fire safety does not. I look forward to seeing where the new value proposition takes the engineer and the astrophysicist.

Your Corporation Wants to Work with Startups? Buy Their Stuff

Corporates that want to work with startups could do worse than start by buying some of their product – and paying immediately upon receipt of the invoice.

A couple of years ago in the City of London, I walked into a medical technology innovation event hosted by a friend and got an offer I couldn’t refuse.

“Great to see you, Nick”, he said, “I need a favor. Someone just cancelled on a panel we’re hosting tonight and it’d be grand if you could stand in for them.”

“Of course”, I replied, “what’s the panel about and when does it start?”

“Startups and corporates, innovation, that sort of thing. We’re on in five.”

Say anything you want, as long as it’s interesting

It’s important to know your role on a panel. There was a government innovation expert and two senior pharma industry people. I was the only panelist in jeans and a scarf, so I was clearly there to be the startup guy. My role was clear: make things lively.

Sing for your supper

As the mike slowly worked its way towards me, my three colleagues all shared variations on how innovation was vital and they were working jolly hard at it. I was the wild card,  so when I got the mike, I asked the big pharma guys the obvious question. “What do you actually buy from startups?”

Show me the money goes both ways

There were cheers and applause from the startup people in the crowd. It was an after work event and startups love a free bar, so I had a vocal base of support. To their credit, the pharma guys were game. The conversation turned away from the all-too-frequent discussion of what startups need to do in order to be attractive to corporates. It became a more equal talk about what both sides need to bring to a relationship.

Sometimes being rude isn’t rude

There were claps on the back from a couple of folks after the event and talk of speaking truth to power, but the fact of the matter was much more straightforward. You can’t bridge the gap in understanding between corporate innovation and startups without helping both sides see the other’s perspective. The big pharma guys needed to hear my question.

Pro tip: Pay their invoice upon receipt

There’s a varsity-level follow up to the “have you bought anything” question, which is “under which payment terms?” If you’re a corporate and you want startups to love you, pay them upon receipt of the invoice.

But that’s not how we do it normally

Yes, that’s not how your firm pays bills normally, but your usual terms are asking a cash-strapped startup to wait three months or even longer for payment. What seems like a detail to you can cause serious cashflow problems at a startup. Be a hero. Do the right thing. Pay them when you get the bill.

Mind Blown

The power of perspective, an overlooked basic process tool

A couple of months back, I did a workshop for a group of senior engineers in Western Denmark who build big projects in the North Sea. The North Sea is rough, so the things they build are tough, but now their job is mutating in a way seen by countless others. Their customers want digital services to go with the steel and concrete. My engineers needed help.

I showed up from the big city with my scarf and my sneakers and I did my magic. Engineers and I generally get along well and we had a good afternoon. As we wrapped up, we did a round of lessons learned and their main take-away brought a smile to my lips. The big revelation for them was the need to look at their product from their customers’ point of view.

Your obvious is not everyone’s obvious

Startup people tend to shake their heads at stories like this, but the engineers’ lack of awareness is much closer to the norm than the opposite. Customer focus is a hard thing to create across an organization. We hire specialists for specialized tasks, but we rarely give them KPIs that ask them to judge their work by the customer’s standards.

It’s easy to imagine that rust prevention is a major issue in the North Sea. It’s just as easy to imagine an engineer over-engineering 100 years of rust prevention into something only meant to last for ten. Managing the expectations of both the customer and the product development team can be a challenge.

Make that challenge your product differentiator

An ounce of prevention can fix a lot of things. We can all look at our products from the customer’s point of view. From designers to developers to sales to HR, the whole team can contribute to a product’s development by looking from the outside in. This is a tool for everyone – and it ain’t complicated.

Look at your work the way the customer would

Have your whole team to look at your product from your customer’s point of view. Your experts can play the customers’ experts as well, so follow the first question with a second: “If you did what you do for our customer, how would look at our product?” The more complex something becomes, the greater the risk that we lose sight of the details. Your experts can help catch those missed details.

Don’t miss the obvious, just because you can’t see it

In college, a friend of mine edited the school newspaper, which came out twice a week. One night, something about a big photo on the sports page of two football players leaping for a header didn’t look right. Everyone seemed to notice it, but no one could put a finger on it.

It remained a mystery until someone’s girlfriend came by with pizza. She asked why there was a picture on the sports page of a guy with his penis hanging out of his shorts. The photo was edited promptly. She had looked at the newspaper as a reader, not a journalist.

Dealing With All-Male Panels in Tech

I ask male panelists to share how their fashion choices have affected their careers

One of my bugbears is how we treat women in tech. The issue is especially infuriating given that I work mostly in the Nordics. We lead the world in equality of all kinds. So why do we keep seeing all-male panels at events? It drives me completely nuts.

Speak up, and don’t worry about looking stupid

A couple of months ago I found an appropriate stock photo on the always amazing unsplash.com and posted the following on LinkedIn:

“The next time I’m asked to moderate an all-male panel, I’m going to ask the questions we all really want answered:

– How have your fashion choices affected your career?

– How do you feel your decision to work full-time has affected your ability to be a father to your children?”

As luck would have it, barely a month later, I hosted an event in Sweden and, you guessed it, there was an all-male panel.

Anger has its place

There are plenty of reasons to shout about the unfairness and inappropriateness of this happening in 2018 and they’re all good reasons. To my enormous irriation, I had help arrange this event and so part of the responsibility was mine. I had to react, but shouting is not always the most effective tool.

Try humor

My panelists all accepted that we had to do something. They were game, so we went with the above. The subject of the conference was low power, a topic that is absolutely, definitely geek central. Lowering power consumption to the absolute minimum is a key factor in making modern tech devices perform better, last longer, and do more – even if it doesn’t make the most exciting conference title.

Recognize and apologize

I opened the panel by apologizing for the all-male line-up. The panelists were mostly Swedes, who, to their credit, are pretty good at laughing at themselves. They tackled the fashion question with a smile and didn’t try to apologize for the fact that we had dropped the ball. We addressed the issue without getting sanctimonious.

Pappa Ledig

The Swedes take paternity leave seriously. It’s an integrated part of the culture. Men about to go on paternity leave get high-fives, not frowns. Jokes about men being bad at changing diapers fall flat. After all, what’s complicated about cleaning an infant’s backside? And what’s hard about asking your LinkedIn network for help finding female panelists? We can fix this.

Don’t pretend there isn’t a problem

Don’t accept all male panels. When they happen, address the fact and apologize. As luck would have it, the final speaker was the CEO of a hardware spin-out. Her presentation was the best of the day. Rock on. Let’s make the change we want happen now.

Finding Zlatan

Nordic founders can take underselling to unnecessary extremes

Our region spawns an outsized number of unicorns. What’s even more impressive is that we do it despite, to put it politely, a limited ability to pitch. There are a handful of natural showmen amongst us, but most Nordic founders have to work hard to learn to communicate effectively. When we do, we excel.

We don’t do “Show-and-Tell” at school

For many Nordic founders, pitching is our first taste of public speaking. Schools in the English-speaking world seem to start teaching presentation in kindergarten. Tiny tots bring favorite toys to present at “Show and Tell”. “This is my teddy bear. I like him very much. Etc.” This is unknown in the Nordics.

Nordic Founders can drive you nuts

We seldom brag, even when we have plenty about which to brag. Take the pair of game developers I met two years ago in Malmö. They planned to launch their game on Steam, the dominant platform for indy games. When I asked how they would stand out amongst the dozens of games launched every day on Steam, they were disconcertingly vague.

Who did you say they were?

Imagine my surprise when, moments after our meeting, I was told they had been on the team that built Mindcraft. And that one of them had 400,000+ followers on Twitter. “Hey, you! Come ‘ere!” I yelled, channeling my very un-Nordic inner New Yorker. I was polite, but made myself very clear.

More Zlatan, less…

I’m glad to report that they now introduce themselves as part of the original Mindcraft team. Their pitch has more Zlatan Ibrahimovic “how do you like me now?” swagger and less Swedish modesty. Saying that you built Mindcraft and now you have a new game is also relevant information your audience needs to know.

Sometimes it’s the setting

I met a raw bar startup at a pitch workshop I held in Malmö back when raw bars were strictly for vegans and crossfit enthusiasts. The half dozen other firms in the workshop were all early stage and many were pre-sales. My workshops are hands on, so they were all creating or rewriting their actual pitches. As we went along, the raw bar people struggled to explain their traction.

The challenge of consideration for others

The Nordics are famous for our consensus and it relies in great part on not making other people feel ill at ease. It took me most of the day to figure out that they didn’t want to make the other workshop participants feel bad. They had plenty of traction. They had sold hundreds of thousands of bars and just landed a contract with 7-Eleven. Today they’re huge.

Modesty can almost be dishonesty

You don’t want a Boy Scout trying to save your life, just because the trauma surgeon next to him is too modest to intervene. It may sound harsh, but pitching is serious business. Being modest or overly considerate can be very counterproductive.

Nordic founders can be modest to a fault. Our lack of public speaking experience can confuse or even misinform. Once Nordic founders understand how much pitching matters and we have the tools to learn how to do it well, we tend to do great things.

Fear and Shame Kills Corporate Innovation

How well do your people deal with failure?

Most corporate innovators I meet happily point to the Apples and Ubers of the world when they talk innovation. They don’t mean the Apple that launched the Newton or the Uber that treated female engineering staff scandalously.

To talk of success without discussing failure misses a vital ingredient in creating innovation. It almost guarantees they will fail in their attempt to innovate. How do you treat failure? I’ve met it and I know. Do you? Do your people?

Luck can be fickle

We don’t like to admit how much we owe to luck. It’s uncomfortable to think that we might be where we are because of who our parents knew or that we were at the right spot at the right time. Fortune isn’t always random, but sometimes it is.

We embrace failure for a reason

Some see our embrace of failure in startups as arrogance, but this completely misunderstands the case. We understand failure is unavoidable. No amount of analysis can predict the future perfectly. We believe that experimentation is necessary to prove or disprove a business hypothesis. We think real arrogance is believing that proper attention to detail can separate good prediction from bad.

Look to Fuckup Nights

One of my all time favorite event series is “Fuckup Nights”, where startup people retell some of their biggest failures. I’ve spoken at the Copenhagen event twice. Last time it was within an hour of admitting my latest project wouldn’t make it. We do it in part to share the lessons learned, but just as importantly to take the sting out of failure, so we can use the failure to build what we do next.

Startups learn with childlike fearlesness

I have a theory that little kids are great at learning because they’re rubbish at everything. They consequently don’t stress perfection. My four-year is more interested in playing with his monolingual English-speaking cousins than in correctly conjugating their verbs. His mission is to play with them and at this he succeeds wildly. My eight-year old can be a shy English-speaker, but with her cousins, she’s more eager to play than she is shy, so she chatters away.

Guess who the self-conscious teenagers are?

Startups are fearless little kids and corporates are cautious teenagers. When young kids learn to speak a second language, their grammar is just as imperfect in the new language as it is in their mother tongue. Teenagers are self-conscious in all things and struggle with foreign languages, especially because their peers laugh at their mistakes.

Mistakes get you fired

A teenager’s fear of ridicule is real, because the pain of social exclusion is acute. The cost of a mistake in a corporate is just as real. You don’t get hired to make mistakes. You get fired for making mistakes. Couple this with the fact that most corporates hire very selectively, and the fact is that very few corporate employees have ever made a mistake.

If you want your corporate warriors to think innovation, teach them to manage the shame and embarrassment that comes with making mistakes. Teach them how to fail.

Innovation Theater People

Don’t get sucked into someone else’s ’dog and pony show’

The tinfoil hat segment of the innovation business has always existed. The new crazies that I see in the innovation business work at corporates. They may lack the wild-eyed look, but many hold equally improbable beliefs – and create just as little value. Beware of becoming too entangled with them unless you have a clear value proposition like, for example, they’re paying for the drinks.

Innovation is a big tent and we give away a lot of love, including to some who may not deserve it. I have a hard time figuring out how lots of these people add value. There may be method to their madness though, and I am straight up envious of much of it. They seem have a ball, make good money, and not be judged too hard on results. Respect.

The Hipster

Everyone’s got a Director of Innovation these days. The young-ish, sneaker-clad corporate head of innovation is on stage everywhere, talking about their company’s digital transformation. When pressed, they struggle to name anything specific that’s been implemented or sold, but the sneakers look good and, hey, their employer is embracing disruption. Mind the gap between the slideshow and reality.

The Dealmaker

The dealmaker is looking for startups that have product-market fit, a great team, billion-dollar potential, and a good cultural fit with their company. On a personal level, their preferred mate is a supermodel with a Stanford PhD, who, in the immortal words of  the boy band One Direction, “doesn’t know she’s beautiful”. Beware of the long distance and many cups of coffee between meeting them and cutting a deal.

The Community… Something

This person doesn’t exactly have a seven-word description of how they create value. Despite this, I’ll admit to anyone that cares to ask that this job sounds awesome. The KPIs seem to be ‘keynotes given’, ‘cups of coffee drunk at conferences’, and ‘LinkedIn connections added’. It looks like fun, but beware of anything they’re giving away for free.

The Garage Boss

Apart from workshops and events, I haven’t quite figured out what these people do, but garages are hot. The crowds trekking through Silicon Valley on innovation tours have seen the Hewlett-Packard garage and decided they need one too. “Innovation labs” and ”creator spaces” are also garages and a rose by any other name still smells as sweet.

The architecture is a key identifier. Look for plywood walls, primary colors, cool light bulbs, and bookshelves full of work by the right authors. The garage boss seems to hold a lot of workshops and those books don’t read themselves. Beware of panel invitations to be the ‘fun startup person’ aka the only person not in a suit.

Slide on up to the bar

The Innovation Theater Crowd can steal a lot of your time, if you’re not clear about how they can add value to you. Don’t be an extra in someone else’s show. Once you can see the value, however, make sure they’re paying for the drinks – and enjoy!

Uncertainty is an Innovator Superpower

Uncertainty is kryptonite for corporate managers, however, and that needs to be addressed.

In this, the buzzword apocalypse, we’re all innovating, being disrupted, and boldly marching into a future where everything will be new, different, and better. Except that we’re not. CEOs may be talking the talk, but most organizations aren’t ready to risk walking the walk. This, unfortunately, makes sense.

There are two key barriers: a lack of training and an aversion to risk. Career success in a big organization is usually tied to performing clearly defined tasks well. Successful innovation is often random and messy.

The future is hard to predict and there are a lot of things that can go wrong. Too many folks think working with innovation is either a matter of trying hard enough – or something to be avoided. It is hard to blame them.

The “trying to plan your way out of uncertainty” trap

A big corporate recently announced the launch of a startup accelerator with a difference. Their innovation: they will choose the participating companies carefully. They will devote all of 2018 to selecting the right handful of startups so they can avoid picking the wrong ones.

Any intern at an accelerator could tell the corporate in question that they’re wasting their time, but the trap they’ve fallen into is difficult for many corporates to avoid. The media make it sound like there are great startups everywhere, but startups are really hard to build. My guess is that there are more startup accelerators than great startups.

The gap between the C-Suite and middle management

The brave speeches CEOs give about innovation often mention the need to push decision-making further down into the organization. But their employees aren’t stupid. They know how big companies work. They know that innovation is a risky business with plenty of opportunities to guess wrong. They also know that mistakes get punished.

Did you really say Steve Jobs?

Poor Steve Jobs gets named over and over in these speeches, but no one ever talks about the Newton. (The what? Exactly. Go Google it.) They seldom mention that his own board of directors fired him. They assume that no one in the audience has read how he could be a nightmare as a boss.

Acknowledge the lack of incentives for the people taking the risks

Middle managers aren’t stupid. They know the odds of hitting a homerun like the iPod are absurdly long. They know innovation often requires working in a minefield of conflicting stakeholder interests. They know success takes time – and that any success produced by the risks they take likely will come on their successor’s watch.

Acknowledge their fear that innovation is dangerous for their career prospects. Give them room to make mistakes. Praise them publicly for taking risks.

Train them

Teach your middle managers to make decisions on the basis of imperfect data. Few of the people who will have to do the innovating have any training in innovation beyond the occasional magazine article. Send them to hands-on workshops. Have them work with actual startups.

Network them

Expand their personal networks to include people who effectively manage uncertainty. Most of the people they know work at the same company. Startups and innovators are used to uncertainty, to not having all the answers. Have your middle managers work with them as mentors, startup competition judges, and at corporate-startup matchmaking events to familiarize them with uncertainty – at a safe arm’s distance.

Let them self-select

Let your innovators volunteer. According to the Kauffmann Foundation, the most successful entrepreneurs are over 40. Every firm has a few risk takers hidden amongst the risk-averse majority. They often leave big corporations that can’t or won’t innovate to create the innovation they wanted to see.

If you train them, network them, and give them the opportunity, they may turn uncertainty into a superpower for you, instead watching them walk away to use their superpowers for themselves or someone else.

Customer Feedback Rocks

Why guess what people want, when you can ask them and know?

A team of engineers from a big corporation recently pitched me a device that helps you take the perfect selfie. They planned to market ‘the smart mirror’ to women, so I asked what women thought of the product. They replied that they’d asked a colleague and she liked it.

I took a deep breath. The moment was a learning opportunity. I may have gotten a little poetic on the topic of knowing your customer. On the practical side, I got out my phone and gave them a few people to call. One of them was Simone Moelle, an influencer I know in Copenhagen.

Time spent in reconnaissance is seldom wasted

They started our second meeting by telling me how many women they had asked for feedback, that their data indicated men take more selfies than women, and that Simone, the influencer I told them to contact, had taught them a lot. It was amazing what a bit of customer feedback could do.

Our discussion changed from “why do this?” to “how can you turn this into a big business opportunity?” It was a completely different discussion, made possible by knowledge about the customer. You can argue for or against options based on data. Informed assumptions can replace guessing.

Data is key

Some of this data had been harder to get than others and it taught several interesting lessons. Their cold calls to Swedish influencers went unanswered. I assumed influencers would pick up the phone when a big corporation called, because there might be money to make. The only reply, however, came from the Dane to whom I had introduced them.

The team knew plenty of women. Plenty of women work at their company. They’re not the first product team to forget to include the user in their process. It was good to see was how quickly they corrected their mistake. People are capable of change.

Invest in people, not products

You don’t have to watch a lot of “Shark Tank” to see why people say, “invest in people, not products”. It takes a lot of hard work to turn an idea into something people will buy. That hard work involves correcting a lot of mistakes, like forgetting to include the user in the product development process. You need to know how to make and correct mistakes.

For some, asking for feedback is hard

They brought their prototype to our third meeting. We were in Sweden, so I asked the obvious question. Yes, the mirror was from Ikea. I asked the obvious follow-on question, whether they had contacted Ikea’s product development people just up the road.

Five minutes later, one of the team admitted that his wife worked for, you guessed it, Ikea’s product development team. Based on the team’s prior performance, I have faith that their next pitch will include feedback from a certain furniture company.

Misunderestimating Women Has a Price

A tale of opportunities missed – and what we did about it.

I prefer to work with people I like, and I really like the team behind Hooves (hoovesapp.com). There’s no guessing where Hooves will end up, but they work hard, have a great idea, and the last year has been a lot of fun. They also happen to be women, so last year I taught Hooves not to smile.

Ninety percent of mentoring women in startups is the same as mentoring men. The last ten percent is not. I don’t have to mentor men on how to deal with investors who don’t take them seriously because they’re men. I don’t have to mentor men on how to present their product or service to investors who don’t understand men.

Misunderestimation is a common mistake

Alina and Suvi, the two founders of Hooves, fit a lot of our stereotypes about horse people. Both are young, female, outgoing, and blonde. Danes would call them ‘hestepiger’ – or ‘horse girls’. A lot of investors they met dismissed them to talk instead to introverted young men with glasses or overconfident fast talking salesmen types.

We changed the pitch

Just before the summer, we changed two things in their pitch – their focus and their delivery. Many pitches spend either too long on the problem or focus too specifically on their initial solution. The first Hooves application matches people who own horses with people who want to ride horses. The big opportunity the company presents, however, is digitizing an industry more than three times bigger than golf. That’s what they pitch now.

They also changed how they pitch

The world expects women to smile, so Alina and Suvi stopped smiling. You don’t have to be Harvey Weinstein to be a jerk to women. Too many investors of both sexes we spoke with referred to Hooves as the “horse girls”. A wardrobe change to black helped, but I think the big shift came when they stopped smiling.

Now people listen

My data is limited, but an investor recently said that half way through his meeting with Hooves he started wondering what he had done wrong. “They’re so serious”, he told me. I let him in on the secret and he nodded. Hooves are getting more meetings and, as of this week, have raised half of their next round.

Investors have been throwing money at golf concepts, because they know it’s a rich sport and it’s one they play. Hooves isn’t about innovating part of a sport, it’s about making lots of money and that’s what they pitch. Plenty of people seem to be able to find the opportunity in imperfect pitches, so why couldn’t they see the play in Hooves?

Stand back, the ladies are coming through

At an investor event where the pitching companies got access to the stage an hour before, I watched them practice their pitch over and over while other presenters just wandered around. They knew exactly where the sightline was between offstage and on stage and when the audience would first see them. They work harder.

Life is short and we spend a lot of time at work. I prefer to work with people I like. These ladies are kicking it.

What Exactly Do You Do?

Too many people don’t explain their product or service when they pitch – and it makes them look bad.

I may not be on the Nobel Committee’s shortlist, but I hear a lot of pitches and I’m really good at deciphering what people are trying to say. Sometimes, however, a five or even ten-minute pitch leaves me confused – and often utterly ignorant.

This matters because it makes both you and your company look like you don’t know what you’re doing. Far too many people see pitching as an add-on or ancillary task. It is a core task. If you can’t explain what you do clearly so that even I can understand, you’re doing something wrong. The cause is usually structural and the following rules can help.

Statement

Describe what you do in seven words. For example, “our platform connects auto dealers with customers”. Do not use these words to explain how it works, what it’s like, or the benefits it provides. Do not confuse this with your tagline. Say what you do.

Use a use case

Explain how your product or service does what it does for a single user or customer. This is especially useful if you have many different types of users or customers. Pick one. Show me how your product works for that one user. No pitch can explain every facet of your product. It doesn’t have to. A pitch is there to ‘get the next meeting’, where you can go into detail.

Use personas

Let’s say you’re explaining AirBnB. “Jane lives in San Francisco. She travels a lot for work and wants to rent out her apartment while she is on the road.” “Tom and Sarah want an alternative to staying in a hotel.”

In a few short steps, walk us through the process of how it works, from Jane putting her apartment on the platform, to how Tom and Sarah find and rent it, to how Jane gets paid, and how the transaction ends.

Explain the value

Don’t make me guess the value you deliver. Tell me the insurance the platform provides makes Jane worry less about renting out her apartment. Tell me the guarantee of a place to stay makes Tom and Sarah more likely to rent through the platform.

Stick to your statement

Repeat your seven-word statement so I have a chance to remember it. Repetition is a powerful tool. Don’t be tempted to explain what you do in different ways. The more times you rephrase what you do, the more chances I have to misunderstand it.

Conclusion

Many pitches fail to explain the product or service. This failure can reflect catastrophically on you and your product. Explain what your product is. Then show me how it works with a use case. Finally, tell me why that matters. Fixing the rest of your pitch is just hard work and practice.

Show Them The Money

It pays to know more than one language: Speak numbers.

I hosted a case competition called the CBS Finance Competition a while back at Copenhagen Business School and it was an eye-opener. The case was the Danish manufacturer Danfoss and the focus was their acquisition of startups. Two things stuck out: it was a boys club and it was all about the numbers.

It’s a pickle party

Do not confuse the society we want with the society we have. All twelve of the participants in the competition were white men in dark suits. There were only two women in the first two rows of the auditorium. Both worked in HR. All of the men wore dark suits, except for the professor, who wore a blue blazer, and a member of the Danfoss merger team, whose suit was gray.

Plan for today. Change tomorrow.

By all means be depressed by the current gender-gap and work to change it, but plan based on fact, not aspiration. Danfoss is an impressive company and they’re socially engaged, but facts are facts. If you’re looking for a corporate acquirer, know that the odds are overwhelming that you’ll be talking to a white man who studied finance. The ratio will change in the future, but plan for the ratio that exists now.

Your focus isn’t their focus – and this makes sense

Startups often focus on team and product. Most corporate investors focus on the numbers. They are buying for very specific reasons and usually have very specific KPIs. They may be how many customers you have or the size of the markets to which your product will give them access.

Like the jury in the competition, you’ll most likely be talking to finance people. Their degrees, surprise, surprise, are usually in finance. The exceptions work in an environment dominated by finance. To them, your product is not something that does A for B, but something that can generate X revenue over Y time. Know how to talk their language.

It’s all about the Benjamins

I ran into an old friend shortly afterwards who used to run an accelerator. After a year off spent working for a corporate, he had spent a couple of months helping a handful of his companies raise money. It had gone well. Why? He’d spent a year working on the other side of the table from the startups.

“You can talk about team and product,” he said, “but it’s all about the money.”

 

Be Different

Sometimes you need to break with the herd

I’m a big fan of different. I like different types of food. I like different types of music. I like living in different countries. I also like mentors who take different approaches to a problem.

As well as being a mentor, I run mentor panel sessions. Mentors don’t take to managing much, and some sessions go sideways. One of the toughest mentor situations I’ve ever seen involved two people who I really like.

There’s a storm coming

Five years ago, Navid was an entrepreneur. We humans are flock beasts and his company was one that we saw a lot of five years ago. Their platform helped small stores connect with customers by helping them advertise, sell, offer discounts, and more. Their journey was an all uphill battle.

Cometh the hour, cometh the man

The other person was Peder. He’s an ex-corporate finance guy who did well with a startup he founded and now he’s an active mentor. I introduced them to each other at a mentor session where a panel was going to try to help Navid solve his company’s problems.

Game over

The meeting was brutal. Navid was late. His presentation was not good. Worst of all, none of it was really his fault. Most people who try Navid’s concept, and there have been a lot of them, find out that it’s incredibly hard to execute. The two-hour session ended after just an hour with the panel unanimously declaring that the company should close.

Startups are personal

Navid was crushed. A lot of the feedback had been personal, some of it unfairly so. The session had been hard to manage. ‘Tough love’ has its place, but sometimes mentors try harder to impress the other mentors than to help the startups. Peder used the final round of feedback to reset the mentoring session and fix the balance.

This will be hard, let me help

Peder zigged when everyone else zagged. Six mentors in a row said that Navid should close up shop. Peder agreed and then pointed out that Navid now faced the task of telling his team that the game was over. This was going to be tough, Peder said, and then he offered to help Navid with that conversation.

Sometimes people need more than tough love

It was the first helping hand had anyone had offered Navid since he walked in the door. The panel had scented red meat and gone for it. Yes, the concept was flawed and everyone including Navid knew it. The panel did him a huge service by getting him to see it was time to cut his losses. But now he needed a little humanity.

Startups are about people

Peder saw the person who was going to have to tell his co-founders they had to close the company and offered to help. It was a big moment. You could see almost everyone in the room lean back in recognition of the kindness in the gesture and think,

“Damn, I wish I had said that”.

Penetrating The Corporate Immune System

Startup mentors can be great executive educators

I was on a mentor panel at a big event once with a corporate executive who was really organized. Unlike the rest of us, he’d actually read the startup profiles. He had a tidy list of questions. The questions were mostly common to all and were along the lines of ‘Do you have a patent?’ and ‘What are your profit margins?’

He quickly caught on that many of his questions weren’t relevant in the given context and that he was applying big company, established product KPIs to products and services that were only just being developed. As the day progressed, he discretely put a line through one question after the next. He probably learned more than any of us that day.

What matters and what does not

We didn’t care about patents. (One question crossed out). We talked to customers before we had a finished product. (Another question crossed out). We didn’t worry if all the bugs were fixed before showing a product to customers. (Another question crossed out). We didn’t put much weight on projections that went past two years. (Another…).

Learning effect

The panel was a great example of the power of peer teaching. Our corporate panelist was obviously competent. His insights on how big businesses work were concise and crystal clear. At the same time, his shrinking list of stock questions was clear proof that he was learning plenty about startups and innovation from us.

Having trouble embracing failure?

CEOs who want their managers to use failure productively first need to help them learn when and how to accept failure. A day on a panel of peers who accept that some failures are inevitable, and even laugh as they tell stories about their own failures, can do more to change perceptions than a lifetime subscription to the Harvard Business Review.

Even experienced managers hate mistakes

They usually focus on efficiently doing something they already know how to do. They’re used to incrementally improving performance. Step change improvements require bold experiments whose outcomes cannot be known with certitude beforehand. Mistakes are common in rapidly iterating startups because they focus learning by experimentation.

Like scientists, startups do experiments to create the data they need to find the answers they need. A negative result is just as important as a positive result. Mistakes that teach you something are valuable. Alexander Fleming’s failure to keep a tidy laboratory gave us penicillin. In most firms, he would have been fired.

This makes perfect sense

You can read about the benefits of learning from mistakes, but a career in a climate that punishes mistakes makes it hard to accept them in practice. Companies that want to change their view of failure need to help their leaders’ change their view of failure. We can’t expect people to learn this on their own.

Mentoring can take the edge off learning hard lessons

Entrepreneurs, investors, and startup mentors appeal to corporate types for a number of reasons: the dynamism, the perceived freedom of action, the innovation, and the hoodies. It’s also a world where, for once, they’re not expected to have all of the answers. They can lower their guard and be open to suggestion.

Like a lot of corporate people new to startups, he wasn’t used to being in a stuation where he didn’t have all the answers. Unlike some, however, it didn’t take him long to see what he had to offer startups and how to present it. Our panel’s corporate guy was a quick learner – and it turned out he also had a lot to teach the rest of us mentors.

”All Your Bases Are Belonging to Us”

Relationships fail. Breaking up can be ugly. Get a pre-nup.

I recently went through a founder bust-up of my own. As a mentor, I’ve seen hundreds, and I disagree with Tolstoy. He famously said that all happy families are alike, but each unhappy family is different. I think founder bust-ups are banal in their similarity.

Founding a company requires faith and founder alignment. No amount of preparation, however, can predict or replace the experience gained from events. Some relationships survive events. Some relationships grow. Other relationships do neither. Be prepared.

Dating vs. Being Engaged vs. Being Married

Everyone needs to be clear on which status applies. I’m an enthusiast. This can be dangerous, so I have a partner, Peder, who keeps me on the straight and narrow. Peder made sure we all were just dating. We talked a lot about what it would take for us to tie the knot with the other guy and how to quantify the decision. KPIs work the same way that the concept of breaking distance does, so you can stop or change direction in time to avoid a crash.

“Get a pre-nup”

We advise founders to write pre-nups. Like Peder, one of my recurring concerns with the project was probably always that we saw the business differently from the other guy. In this, we were completely normal. It’s utterly common for one person to be more invested in a relationship than the other. The trick is ensuring that there isn’t a major imbalance.

Things didn’t work out

It didn’t go the way we hoped. The concept we had hoped to map from the other guy’s city to ours proved to need a lot of adjustments. The list of compromises both sides had to make got longer and longer. The other guy started handing out ultimatums.

We all want to be respectful and mature, but…

Founder bust-ups are usually emotional, much like romantic bust-ups. We said something along the lines of “it’s not you, it’s me” and “let’s just be friends”. Perhaps unsurprisingly, that didn’t go over so well.

Game over

Our friend was furious. He immediately blocked our email and social media accounts. He demanded all the assets. The situation was just like founder bust-ups everywhere. It could have been a big mess. The fallout has been minor, however, because we kept our breaking distance.

Lessons learned

As a mentor, it’s good to have first hand experience and to occasionally renew old lessons learned. It was interesting to be in the middle of something we see startups wrestle with all the time. We never reached the pre-nup stage, because we never became full-fledged co-founders. There was plenty in the break up, however, to remind us why an agreement on how you manage a founder-split is a really good idea. It’s good advice to take and to give.

Give Me Three Good Reasons

Scaling things is hard and ideas matter less than execution

”By the end of dinner, I want you to give me three good reasons why you’re building someone else’s brand instead of your own.”

The challenge came from Mikkel as we walked to a late dinner at Tommi’s Burger Joint. It was one of those questions. The kind you knew had been on the way for a long time and that once asked really needed no answer. We all need friends like Mikkel.

“I can’t think of a single one.”

I launched my last business in a niche that I knew well, tech and startup events, doing a variation of something I’ve done for years. I decided to work with a guy who developed a concept I really liked. I’d open it in my city and together we would see how far we could scale the concept. Over coffee, it looked like a great plan, but everyone knows the proof is in the execution.

Execution is hard

For years, I’ve told startups that execution has value, but concepts are worthless. A patent is only one piece of a business model for turning an idea into money. There are a lot of good reasons why repeatable success is so highly valued and one is it’s really, really hard. What works in one place often doesn’t work in another.

Don’t love your idea, love the results

Things didn’t work out. Mapping the concept to Copenhagen took a lot of adjusting. This took time and effort that we couldn’t spend on things like sales. I loved the idea, but making it happen sucked up huge amounts of time. The more we had to invent solutions that didn’t exist to deal with situations that didn’t exist, the less it looked like the original concept.

Franchising looks simple. So does golf.

Franchising only looks simple to those who’ve never tried it. It’s really hard if the concept is new and the product is new. It’s harder still, if the brand is new to the market as well. It takes a lot of support, great tools, great marketing, and a really clear road map to roll out a new franchise. As a mentor, I now give much more specific feedback on franchising.

The concept is dead. Long live the concept.

Eventually, I realized we were working in parallel instead of together. The synergies we had hoped for didn’t appear. Discussions turned into criticism and the criticism got personal. Cultural note: if a Swede curses at you, things are really, really bad.

Sometimes you need a push

I know I do. Hindsight is a clear, but distorted lens. Some things you know at the time and some things you don’t. I’m not going to beat myself up about the mistakes I made. I’m trying to learn from them. I overlooked things I shouldn’t have. Luckily my friends pushed me.

 

“They Didn’t Do As I Said!”

Action shot of me facilitating an investor panel and explaining what not to do.

A pitch doesn’t have to be perfect to work

Startup mentors spend a lot of time giving pitch advice. The advice given spans everything from format and content to delivery and even personal wardrobe choices. Some of the advice is good and a lot of it is not, but in defense of the well-meaning mentor, it is worth noting that the target – the right message delivered the right way to the right audience – can be hard to hit.

“Thank you for a really good pitch…”

Take for example, a pitch I heard recently while running an investor panel in Gothenburg, Sweden. The pitch was awful, and yet it really caught the panel’s attention. The pitch was vague. It was long on the problem and short on the value created, but Swedes are unfailingly polite. Each investor started their feedback by saying ‘thank you for a really good pitch’, before asking some rather revealing questions.

The first investor said he didn’t understand the product. The second investor agreed with the first and said that she didn’t understand the business model. The third agreed with her predecessors and said that she didn’t understand how the product was sold. The pitch looked like a disaster.

Sometimes ugly works

The fourth agreed with all of his colleagues, but then said that he wanted to meet with the company after the session. Why, you ask? Because they had 10,000 B2B customers, that’s why. He said he wanted to know what the customers understood that the company had been unable to explain to the investors. The other three investors all agreed.

Traction is king.

Mentor Archetypes – Academic – Resources and Access

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I don’t meet many startups that aren’t looking for money and all of them could do with introductions to people that can help them. Academics are an overlooked source for both.

Tired of giving away equity for cash?

Try grants instead. Lots of us don’t bother to apply for grants because of the administrative burden. Academics are often expert at exactly this discipline. They also often need partners to apply for the amazing variety projects and programs offering funding.

Labster.com is one of my favorite examples of startups that substituted grants for equity funding early on. I’ve worked on projects with several universities who handled the admin for the project partners. You want people with these skills to advise your startups.

Access to talent

Hiring is a bear. Qualified staff are hard to find and hard to sign. Networking is one of the best tools for solving both the problem of finding talent and convincing them to join your company. Academics can help with both tasks, especially if you’re looking for specialists or fresh graduates. Cultivate them.

Access to visiting VIPs

All sorts of interesting people stop by universities. Some come to see other VIPs. Some come looking for the next big thing. This goes for individuals, be they experts in specific niches or big name gurus, all the way across the spectrum to delegations from other universities and innovation-seeking corporates. The academics are often good at the matching game.

Access to test subjects and partners

Need data? Ask someone with access to a large, interesting population of potential test subjects for help. Need test partners? Academics are all about tests and testing. I think academia seems like an obvious place to look for help finding both of these, but I’m always surprised by the trouble academics have finding someone with whom to dance. Go ask them.

Ignoring academics is a mistake

Academics have access to a lot of what startups need – and what other mentors need as well. They can give you access to resources, talent, and network. They need partners, data, and network from outside academia. They may not look like the startup people you’re used to dealing with, but don’t discount them.

You may think you know what’s happening on campus, but remember, so did Myspace.

“Your Value Proposition is Unclear”

0iijeltgvzm-marc-guellerinThere are many ways to be a mentor, but basics are easy. Try to help and don’t be a jerk.

It’s almost Christmas as I write this. A few miles north of where I sit, my namesake is checking his list to see whether each and every one of us has been naughty or nice. Most of us could do with some help on the nice side, so if you’re a mentor, remember the first rule of mentoring: Don’t be a jerk.

We like being right
I meet loads of people who call themselves experts. A surprising number of them are actually quite knowledgeable. Quite a few of these even manage to translate this knowledge into something that provides value to others. Many, however, don’t help at all.

Translating knowledge into words that can be communicated, understood, and applied is hard. The temptation to play the know-it-all is overpowering to some. Far too many of us can’t help ourselves. We feel the need to prove we’re right. Our quick tongues can’t resist the urge to put down or ridicule. Our desire to help loses to a need to be recognized as clever.

Any fool can point out the problems
Too many mentors think our role is to point out all the problems. Entrepreneurs know startups are hard. If they don’t, time will teach them soon enough. They may have missed some nuances or completely missed something vital, but when they come to us, almost all of them come for help.

They’re looking for answers
They need help getting stuff done. They need solutions. There’s nothing wrong with helping them identify the problems, if that’s the phase they’re in – or if they’ve missed something big. Usually startups have a specific pain. It may be assistance in pinpointing where exactly they need help, but then they need the answer – or our advice on where to find it.

Answers that help, delivered so they can be used
Too many of us spend more time tearing down than building up. The American practice of sandwiching bad news in between good may seem superficial, but it can make advice easier to absorb and accept. Entrepreneurs are touchy about their startups.

Sometimes it’s not all about you
Half an hour of being told you’re an idiot makes people defensive and unreceptive to new ideas. Who knew? Sometimes dialing back the criticism makes it easier for us to make our point and provide help that makes a difference. No matter what your approach, follow the first rule of mentoring. Remember that we’re here to help. Don’t be a jerk.

Keep The Ball Rolling After Demo Day

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Help your startups after graduation and give your most engaged mentors an opportunity to shine

All startup programs face a common challenge: how do you help your startups after graduation. One of the obvious tools is to leverage the strength of your mentor networks – and one way to do use the mentors is to have them recruit advisory boards for your teams.

Startup programs struggle to help their graduates

Once they’ve flown the nest, graduates are hard to help. They’re busy trying to grow. Neither party is great at keeping in touch and often both struggle to see the point. The clear win for the program is that they benefit when their graduates do well. The downside is cost. Graduates, meanwhile, struggle to see what programs can provide post-graduation or the potential return on investment in time spent.

Advisory boards recruited by mentors can help. They get much the same value out of contact with the startups after the program as they did during the program, plus more besides. The mentors see the post-graduation struggles and successes. They learn whether their advice works or not. They also get a better opportunity to build relationships with the startups that can lead to future roles.

Startup programs are short on tangible benefits for their mentors

This is a defined, tangible opportunity for the mentors beyond the opportunity to ‘meet and mentor startups’. Especially if given the opportunity to be a lead mentor and head the recruitment of the advisory board, this is a great chance to give them something they can measure and even put on their CV.

Startup programs often fail to understand the potential

Far too many programs either fail to see the point of mentors, insufficiently engage mentors, or simply have them because everyone else does. This is a way to engage them that has clearly defined benefits for all parties. The mentors can help drive program engagement post-graduation, help monitor the graduates’ progress, connect the startups with relevant contacts in the program’s network, and much more.

Use mentors to do what you can’t

Startup programs don’t ignore their graduates, they simply lack the resources to invest in helping them. Using mentors to do the task can be extremely cost effective. The investment is minimal and the potential upside is tremendous. One success can make or break most programs. Use your mentors to help you do what you can’t and help the mentors get more value out of your program as well.

 

 

 

 

 

One Plus One Equals Three

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Mentoring can be a lonely business. If you’re not matching your mentors in pairs, you’re missing out.

Pairing mentors is a straightforward way to give mentors value beyond what they get from meeting one-on-one with startups. Mentor programs are ten a penny these days and programs have to stand out to get the good mentors to commit. Most programs struggle to explain the value their mentors – and often struggle to provide real value in practice. Pair mentoring is a powerful, but often overlooked tool.

Why pair your mentors?

Networking is an oft-listed benefit for mentors, but few programs do it well. It’s one thing to get to know each other over a drink at a mentor event. It is something else entirely to share a mentoring experience – and more professionally relevant than playing golf. Pair your mentors to help them get to know each other. Let them show off what they can do to each other as well as your teams.

Matching your mentors binds them to each other and to your program

It’s a powerful thing when your mentors say, “we met as mentors for X”. It’s even stronger when their common experience isn’t just tied to the teams, but to each other. The answer isn’t more barbecues or more beer. The answer is letting them to work together.

Create commitment

Pairing with other mentors to work with your teams can help drive commitment on a practical level. It’s one thing to cancel on a startup no one knows and another to cancel on a fellow mentor who you know.

Create connection through common experience

Team-building consultancies have known for years that making people do something together that is hard builds bonds. Some of it is cognitive dissonance: we often put greater value on things that are hard. We also tend to value things our peers value, and a second mentor at your mentor sessions can make a big difference in how your mentors experience your sessions.

Your mentor sessions can give mentors something meaningful, especially because they’re built on professional experience with more direct relevance than a building a two-rope bridge or paddling a canoe. The company they help may actually succeed. The lessons they learn may be directly applicable in their work.

Let your mentors show each other what they can do

We all know people who talk a good game over a beer, but then give vanilla mentoring advice. Any fool can tell someone their value proposition is unclear. Give your mentors a chance to show each other how good they are at explaining the options in a term sheet. Let them show each other how they improve a pitch.

Meaningful “In Real Life” experiences are always in short supply. Let your mentors show their skills and you’ll be giving them a unique opportunity. It will help them, your startups and your whole program.

Dig for Victory

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Want your mentors to show up and dig in? Give your mentors badges.

The Boy Scouts may have gotten there first, but everyone knows that people love badges. Like awards, they’re a way to reward accomplishment and signify membership or affiliation. The world may be awash in startup awards, but badges are curiously underused and remain a powerful, untapped way to drive mentor behavior.

Measure and differentiate mentor engagement

Engaging mentors is tough. The good ones are busy and there’s plenty else for them to do. There are plenty of mentor programs and they all promise the same mix of ‘amazing’, ‘new’ technology, ‘inspirational’ entrepreneurs, and ‘valuable’ networking. There are mentor dinners and panel events. It’s all rather intangible.

The value add for mentors is especially intangible when mentor programs only offer mentors the opportunity to call themselves ‘mentor’. Anyone can call themself a mentor at almost any program. Show up once for drinks and you’re a mentor. Show up every week, introduce program teams to investors, broker a startup’s first contract with a corporate customer – and you’re still just a ‘mentor’.

Use badges to drive mentor behavior

Count something and you get more of it. Make the badges transparent and quantifiable. You want mentor engagement? Hand out badges for ’X mentor sessions attended”. Hand out badges for years of mentor service. Create a badge for ‘founder mentors’ who have been with your program since launch. List what it takes to earn each badge clearly on your website.

Make the badges visible

LinkedIn is an easy place to let people post their badges. Your website is fine, but your website is probably designed to appeal to startups. One of the best places for most of your mentors to show off their work is on LinkedIn, so enable them to post their badges there.

Use badges instead of awards

Badges are cost effective. Awards take a lot of work to build into prestigious brands. They also take a lot of time and money. Your average two-year old startup has a whole shelf of awards. Many mentors can say the same. Trophies are marketing tools for the people awarding them. Bluntly put, the average award plus five dollars will almost pay for a cup of coffee.

A badge is different

A badge lets you and your mentors quantify what they have done. It is a step towards demonstrating the value they create. Napoleon said that a man would risk his life for a ribbon, but not for a bag of gold. He was onto something. Badges work. Use them to get your mentors involved – and to keep them involved.

Mentor Archetypes – Ecosystem Professional

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Startups are an industry

The title ‘ecosystem professional’ may sound contrived, but the fact is many people make a living working with startups as opposed to at startups. An interconnected jungle of interest groups, accelerators, incubators, co-working spaces, consultants, and public sector organizations surrounds the startup industry, living off it and giving it life.

Purists argue that most of these people don’t provide value. You don’t need to care either way. They exist and the somewhat religious discussions ignore the fact that some these people can help you. The industry surrounding startups is big, diverse, and full of opportunity for those who can navigate it.

Who are they?

Someone pays these to achieve a certain result: create jobs, promote an industry, attract talented people, scout startups, etcetera. They work for accelerators, incubators, lobbyists, non-profits, government, startup labs, ‘growth clusters’, or sometimes just themselves. They go to a lot of conferences and drink a lot of coffee, just like startups.

Many of them have been corporate or public sector all their lives. Others are former entrepreneurs working a stable job between startups. Picking the right person to work with relies less on what they’ve done before, and more on what they can offer and what you need.

Why bother?

They know the industry and the economy that has grown up around startups. The public sector has discovered startups. Corporates have discovered startups. The professional service industry has discovered startups. All of them want to do business with startups and most of them have ‘special offers’ for startups. Finding the right program or person isn’t easy.

F6S.com is an online platform that helps match startups with the right offer amidst the overwhelming wealth of ‘opportunities’. It does a good job, but covers just a fraction of what’s out there. Denmark, for example, has well over 100 public programs for startups. No one person can tell you who the right people are.

Focus your ask

The people who work in the ecosystem are often your best bet for advice on how best to navigate the system. They’re the people who know the deadlines for the best competitions and projects. They can help you pick the right programs and avoid the dogs. They know who can help you write grant applications. They can get you into the right events.

Their titles often sound vague. Yes, there can be great variation in the real help they actually provide. They go to a lot of conferences and they drink a lot of conferences. Sometimes, however, the best person to help guide you through the startup jungle is someone who makes a living being part of that very same jungle.

How to Reward Your Mentors – Help Their Careers

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The More You Can Do For Your Mentors, The More They Will Do For You

Two things worth remembering: when they’re mentoring, they may not be on company time – and you may have more to offer them than you think. Mentors are usually driven by a combination of both professional and more personal reasons. Corporate mentors may have been assigned to participate. VC mentors may be their fund’s person responsible for tracking your program. The individuals, however, may be looking for something more personal

Are Your Mentors Planning Their Next Career Move?

The corporate pyramid narrows sharply at the top and the pressure from below is unrelenting. It’s not every associate that makes partner. We don’t all make it to the next rung on the ladder we happening to be climbing right now. Time spent looking for the next thing is often well spent.

Match your investors with people they should know – people they can help and be helped by in return. Give them insight and show them new trends. Your mentor might not a standard “startup type”. Being associated with you can give them credibility with hard to describe concepts like ‘innovation’ or ‘disruptive technologies’.

Get Mentor Buy-In By Helping Your Mentors Network

This sounds “nice-to-have”, not “must have” to most people running accelerators and mentor programs, but it’s essential. Busy program managers focus on helping their batch of startups. Mentors can be hard to schedule, hard to match with the right startup, and often unreliable. But the fact is that mentors are hard to do without. Their knowledge and network provide the capacity to scale.

Match Your Mentors With a Purpose

The focus of most mentor matchmaking is on finding the right startup for them to help, but this is just the first step. Think through how to match mentors with each other – and with your sponsors and partners. Your mentors often match perfectly with your partners looking for trends, intros to startups, and insights into innovation.

Help Fill Your Investors’ Pipelines

Simply by virtue of their numbers, your mentors together see more startups than you do, even when you’re actively recruiting. Matching your investors and your mentors is a perfect way to give both parties interesting leads. Your investors are looking for interesting pipeline and they can provide all sorts of help to your mentors.

Help Your Mentors Help You

Helping your mentors help themselves can also teach you interesting things about the market. Working with startups, especially tech startups, means living in a world where the new is everyday and innovation is a given. That’s not how things work elsewhere.

There is a lot of value in finding out what problems people want help solving – and one way to do that is to offer to help your mentors solve their own professional challenges. Mentors who see a personal benefit are more likely to commit to your program – and you can help make that happen.

Mentor Archetypes – Corporates

007Know Them by Their Suits

Startup people are often quick to label corporates and often negatively. This is a mistake. They can make great partners, great customers, and great mentors. Like us, they can take getting to know. Look past the suit to discover what they have to offer and what they want.

Look Past The Suit to Judge The Individual

The suits may all look the same, but so do our hoodies and sneakers. Ask where they’re from in their organization. Sales? R&D? Innovation? HR? Business development? Each has different things to offer and different things they want. Despite what Monty Python said, they are all individuals.

Corporate sales people can be very valuable for their insight into how to sell to corporations. They are usually expert at the long game. They don’t mind it waiting for the customer to pay, especially when they can get a long-term contract that is easy to renew. They can teach you a lot about how to manage sales processes and what to expect from different customer types.

They’re not just good at sales

Yes, you need revenue and you either want them to buy your stuff or help you sell it, but they can offer more than that. The corporate HR people trying to recruit developers from your startup co-working space may be able to teach you a lot about on-boarding or retaining staff.

The R&D specialist scouting trends may be able to get you a whole new level of access at big events. Their innovation coordinator may get your startup into a trial they’re running or access to their hardware.

Instead of Laughing, Start Learning

These guys are often really good at skills you need. Laugh at their suits, but they usually wear them for a reason – money. The suit may match certain customer expectations and big companies are good at knowing what their big customers want. Matching those same expectations may make or break your startup.

Follow the Benjamins

Corporates make lots of money, often absurd amounts of money. They do a lot of things right, or they wouldn’t be in business. We may think software-as-a-service is new, but tech didn’t invent the subscription sales model.

These guys invented big, multi-year sales, complete with ‘add-ons’, ‘lock-in’, and much more that have earned them massive profits. People stand behind all the logos and branding. People are what make corporates go, just like startups. Used properly, their knowledge can help you make lots of money too.

Do they wear sneakers? Who cares.

Mentor Match Is Overrated

Sometimes You Don’t Need To Be Understood

Storm 4

I find fashion startups hard to work with because there are so many ways to fail. Do everything right and somehow something bad always seems to trip you up. They also attract hard-to-work-with personalities. Burned fingers make me wary.

This goes part way to explaining why one of my favorite startups spent the first four weeks of an accelerator learning to tell me – and eventually themselves – that they weren’t a fashion startup. They’re an e-commerce logistics startup, a sector I like.

Four years later they’re doing quite well. Their customers are happy. Their investors are happy. They’re happy, and so am I. They’re not a fashion startup.

Avoid startup huggers, unless a hug is what you need

Your time is painfully short and you need to cover ground as quickly as possible. A lot of mentors are in the game because it’s exciting and fun and that’s fine – as long as they add value. Their support needs to help you move forward.

Some days are harder than others and a pat on the back or thumbs up can really help. Accept a hug when you need a hug, but don’t be needy. If they want to hear your pitch just to hear your pitch, consider moving on. Get stuff done. It’ll make you feel better.

Resistance can be good

Sometimes what you need is a grumpy, old mentor who doesn’t get you or your idea. Maybe you’re like the sensor company I worked with recently, that couldn’t understand the pushback to their contactless payment technology.

I told them what others wouldn’t. The common perception is that the breakthrough for their technology has been ‘right around the corner’ for twenty years. We don’t care that it’s big in Japan. Now they start their conversations by addressing the elephant on the table. It seems to be working for them.

Not everyone will get you – and that’s good

I’ve pitched a concept for the last year that people either get or don’t get. Buy-in seems to be immediate and intuitive – or not at all. Convincing people who don’t get it right away is hard, but I’m closer than I was three months ago. My message is sharper now.

Sometimes you need to be forced to explain yourself until the person across the table understands. People who’ve drunk the Kool-Aid aren’t always the ones who can help most. Sometimes you need to be misunderstood, if only because resistance can make you stronger.

Is Your Mentor Program More Than Pictures on a Website?

ØresundsbroenHow does your mentor program actually use mentors?

There’s a temptation to put air quotes around the words mentor and program, because very few mentor programs are more than a list of people who may or may not stop by once or twice a year. Perhaps the proper thing is to segment mentor programs to make it possible to identify how they use mentors – and how they reward them.

What does it take to be part of your program?

Predicting the future is a hard business, so focus on performance instead of selection. Pay close attention to how often your mentors show up and how they do with the startups. If they do well, keep them.

If you’re just starting your program, don’t sweat mentor selection. Know that rules and pre-requisites can be a poor way to pick mentors. They may make it easier to make the list of potential candidates smaller, but you should be looking for effective mentors – and they come in many sizes. Recommendations work well as do instincts.

How do you manage your mentors?

You shouldn’t have to think about this one. The results matter more than the tools you use. What you’re looking for here is clarity. How active are your mentors? Who is meeting with whom? What is everyone getting out of it? If you want to do it with index cards instead of an app, be my guest, but make sure you’re capturing the data.

What is your churn?

Mentors come and mentors go. Sometimes they’re active and sometimes they’re not. How do you measure their activity? How do you segment them?

Do you keep inactive mentors on your list to make the list look pretty? Do you have a plan for activating inactive mentors? Do you strike them off if they haven’t been coming to your events or meeting with your startups?

What is your mentor cost of acquisition? What is your mentor ROI? How many hours of mentoring does your program provide your startups? Can you answer these types of questions or are there different rules for you and the startups you advise?

Why do the numbers matter?

Your mentors can add absurd amounts of value if used properly. Gathered and used properly, your data can tell you a lot about your program. Does it make a difference to star mentor retention whether your startups visit the mentor’s office or your mentors have to come to you? Ask your numbers.

Your data can show which mentors are good at making introductions and which are good at making teams work better together. It can show your investors how much value the mentor network you built has created. The numbers can prove or disprove your assumptions. And as long as it’s effective, it doesn’t matter whether the data is collected on index cards or an app.

Assumptions vs. Facts

Most of you have assumptions about these questions, but no formal data. You have assumptions about how to attract and keep the best mentors. You’re not alone. Most mentor programs prioritize differently from the startups they work with because no one demands they do what their startups do: test their assumptions. Ask yourself whether that makes sense.

Make the Introduction Instead of the Argument

Introductions are often better than advice

”Don’t touch that!”

”Why not?”

”It’s hot. You’ll burn yourself”

”How do you know?”

Giving advice is usually rather straight forward. Explaining why the advice is valid and should be followed is often the bigger task. Sometimes the best advice a mentor can give a startup is an introduction.

Why should I listen to you?

It’s a good question, and frequently, my answer is ”Don’t”. My network is big enough that I almost always know someone who knows more about what you just asked than me. The same goes for most good mentors.

You want to start a business tracking boxes for moving firms? I know a handful of companies that do that for the retail and delivery industries. Ask them for advice. You want to talk about raising money from Investor X? Let me introduce you to these three companies that have them as investors.

Is your question about legal, accounting or IPR?

Math ain’t just adding and subtracting. There are lots of accountants, but only some of them understand startup accounting, let alone startup investments. IPR is about way more than filing patents. Your copyright may be filed correctly, but making the competition care is another matter.

Lawyers come by the dozen, but only some of them understand startup term sheets. It’s sad to see lawyers aggressively trying to gain every advantage possible for investor clients. They don’t seem realize that an unequal deal does their client no good when it removes the startup’s motivation to work hard.

Some startups are hard to reach

Sometimes it’s not worth the fight to beat knowledge into someone’s head. Sometimes they need time to let the wisdom seep in. Sometimes the best way to get someone to see something is to change the messenger. And sometimes, someone else’s answer is not only better phrased, but just plain better.

Make the introduction instead of the argument.

Mentor Archetypes – CXO Between Jobs

Turning_Torso

Is who you’re looking for, who you need?

The search for a ”real” mentor often fails the same way big companies do when hiring. Corporates filter applicants to make the pile of applications smaller and therefore easier to manage. The filters don’t find the best candidate, they just make the selection task easier.

The “CXO Between Jobs” is a senior corporate executive who’s just left one job and is networking their way to the next. They can be high value mentors, but often get overlooked or used the wrong way. Just like corporates requiring degrees from their developer applicants – and thereby disqualifying both Steve Jobs and Bill Gates – startups often only want mentors with startup backgrounds. This is a mistake.

The sky is the limit

Senior corporate executives have a lot to offer. They can introduce you to customers, potential partners, investors, and more. They can show you how to structure an offer to a big client, so that you can borrow money, raise capital, or even have the customer pay you up front. Look up Microsoft’s first deal with IBM, then imagine someone helping you do something similar.

They understand the customers many startups are trying to target. They understand how to do things big. They understand big customers’ buying cycles. They can tell you who to speak to in a big firm (hint: it’s probably not the mid-level guy you met at that conference).

The window is small, be quick

You need to be quick and you need to be ready to use their expertise. These people often have large bills to pay: big houses, expensive cars, private schools, etc. They may have a year’s pay to tide them over, but the jobs they’re after normally take six months to land. They don’t stick around for long.

Potential investors

Your CXO corporate mentor may have the money you’re looking for to close out your seed round – or get it started. What you do is often more exciting than what they do. A one percent efficiency improvement made deliver a seven- or eight-figure improvement to bottom line, but it’s not as sexy as the 10X potential of the startup you’re building.

Corporates may not have much street cred with the startup crowd, but they do with people whose opinion matters to you. Big customers and many investors see a senior corporate executive mentor as a stamp of credibility. Few employers actually call an applicant’s references, but most draw conclusions based whom the applicant lists.

What can you give them?

Being senior can be a drawback. Senior execs often are assumed to be out of touch with the latest innovation. Give them both knowledge and credibility, by showing them what’s around the corner. Introduce them to the companies shaping tomorrow.

Help them stay sharp while they’re stuck out in the long grass. Teach them the latest trends and jargon. Build their contacts – to startups, other mentors, and the corporates interacting with the startup ecosystem. Offer them access to events and networks.

About that new job

If things are really cooking for you both, you might even want to offer them a job. After all, their budgets have more zeroes than yours – and many of them are used to closing deals that usually figure on the far right of your projections.

Mentor Archetypes – Service Providers

Founders seem to draw so much attention that it often blinds us to the crowd of others whose efforts are essential to turning the founder’s vision into reality. One group that definitely doesn’t get enough love is the service providers. They get accused of charging too much, loitering at events looking for new clients, and they wear suits. Ouch.

Common perception, meet reality

The suits do make them stick out. I’ve seen lawyers wear sweaters, but accountants aren’t going to show up at an event on a skateboard. You probably don’t want them to. The suit is their uniform, the same way the developers’ t-shirt and flip-flops are. Look past the clothes, especially the tie.

Are they on the lookout for new business? Sure. Everyone’s looking for something. You want a smart money investor. The next guy wants a rock star developer. The woman next to you wants to hire a SAAS sales expert. How they go about finding new business and how you react to them matters.

The good ones are problem solvers – and you have plenty

Odds are that you need more of their advice than you realize. An absurd number of startups either don’t have founders’ agreements or signed papers that cause trouble when a founder wants to leave, you want to raise money, or your freedom to operate is being challenged. Everything’s good right now? Give it a day or two. Things move quickly with startups.

What can you get for free?

The answer is a lot. Think of service providers as the original content marketers. Another option is to think of them as thesis advisors: they can help you define your questions and point you in the direction of where to find the answers.

So you’re not in the market for their services

The good ones know a lot of people and can make introductions, even if you’re not in the market for legal advice. Many of them know a lot more about your business than you would think. You can pretty up slides, but you can’t hide the real numbers from your accountant. The accountants know who is making money and who is about to run out. The lawyers know who signed a rotten term sheet and who was smart. The IPR specialist knows who is about to lose their shirt in China.

The right service provider can be a great mentor

We’ll return to this subject later, because there’s a lot that smart startups can gain from getting close to the right service providers. They catch a lot of heat from people in the startup community, but the ‘suits’ can help create a lot of value. Ignore them and you may be missing out.

Mentor Archetypes – Entrepreneurs: The Very Bad and The Ugly

GothenburgIceLet me introduce the first mentor archetype with a cautionary tale. Entrepreneurs, especially serial entrepreneurs, are the mentor rock stars and I know many that are awesome startup mentors. They’ve been there. They’ve done it. They’ve proved they know how to succeed. Sometimes they’re right for your company – and sometimes they’re not.

‘The Good’

The good ones have startup experience relevant to your situation. They like giving back to the community. Lots of them are angel investors. They usually have great networks that they can share. Many are looking for their next project. If you find the right one, it could be a match made in heaven.

‘The Bad’

While good entrepreneur mentors are awesome, but I’ve seen bad ones be disastrous. Their badness comes in many varieties. There are know-it-alls, yesterday’s men, Shark Tank wannabes, limelight seekers, and many more.

‘Know-It-Alls’

Mentors do a lot of talking, but we do try to listen and we try stick to what we know. The entrepreneur mentor know-it-all is quick to cut you off. They say ‘me’, ‘my’, and ‘I’ more than most people. They want to talk about ‘my exit’, ‘my vision’, ‘my cool spouse, kids, car, gadgets’, ‘my amazing offer’, and they know exactly what you should do.

‘Yesterday’s Man’

Yesterday’s Man has credibility, because he’s ‘been there’, even if ‘there’ was ten, fifteen, or twenty years ago under completely different market conditions with completely different business models.

Getting lucky once doesn’t make you Steve Jobs. A lot of things have to go right for a startup to be a big success. Jobs was smart, but he worked with smart people in an industry that perfectly matched his talents at a time when explosive growth was possible.

Yesterday’s Man often wants you build your startup the way he built his, but business models have changed since a lot of these people hit it big. Ask yourself whether it makes sense. What did your phone look like ten years ago? You may be able to go further on a six-figure seed round, than Yesterday’s Man did with millions.

‘Shark Tank Wannabes’

I love Shark Tank, but I recognize that it is entertainment. Some mentors think their prior success marks them out as master negotiators. The art of the deal can be complex. If it was simple, there would not be so many books on the subject.

Many Shark Tank wannabes give bad advice on the ‘be a tough negotiator’ theme. They encourage you to make absurd demands and take the hard line. Sometimes standing your ground is the right thing to do, but it’s an easy course to advocate when you don’t have any skin in the game.

‘Limelight Seekers’

Success is intoxicating and a lot of successful entrepreneurs want back in the game once they leave the successful company they started. Some of them are doing it because they like being respected. They like being called rock stars. They like being adored. You don’t want to be their soapbox. Find someone that really wants to help you.

Channeling Tolstoy

All good mentors are alike; each bad mentor is bad in his own way. There are lots of ways to be led astray that I’ll leave for later. ‘Amazing’ offers, exploding offers, empty promises, long sidetracks, and their many cousins are all time wasters. If you’re unlucky, they are worse.

Look both ways before you cross the road

Rock star serial entrepreneurs can be perfect for your startup. They are great for introductions to mentors, business developers, software developers, corporates, investors, advisors, advisory boards, and more. Sometimes they really do have the answers to your problems. And sometimes they don’t.

Eight Mentor Archetypes You Need to Know

Who are we?
Mentors help startups meet all sorts of challenges, but finding the right ones to help your startup can be hard. It is a lot easier to know how and whether we can help you, if you know who we are, what we can do, and why we do it.

Know how to profile your mentors
Identifying which we profile fit is powerful and can be very straightforward:

“Anne, an ex-McKinsey consultant and former startup CFO, recently was part of a profitable exit and is now an angel investor. She wants three things:
• to meet startups that match her investment profile,
• to network with experienced angels to learn and perhaps co-invest, and
• to give back to the ecosystem.
Anne is demanding, detail-oriented, asks tough questions, and is good at getting startups to understand what they need to do to attract investors.”

How do you get a mentor to help you?
What should you do if you want Anne to help you? Do you have anything to offer her in return? How do you get from not knowing Anne exists or what she can do to a position where you can meet her and convince her to invest time and effort in helping you?

Start by using archetypes to analyze the mentor
Here are eight basic archetypes, with very brief descriptions, to help you categorize mentors. We often fit into more than one category, because we’re human, and therefore complicated.

Entrepreneur – Often the most coveted, but can include out-sized egos and opinionated people whose ‘lessons learned’ are out of date.
Investor – Usually looking for interesting investment opportunities. Used to being flattered.
Service Provider – Lawyers, accountants, bankers, and IP specialists. Good ones tell you how to make things possible instead of telling you they can’t be done.
Startup Enthusiast – We often fit more than one archetype. We are often in it for personal reasons as well as business. Some mentors just love the industry.
Board Professional – Includes consultants and can bring lots of experience and big networks.
Academic – Often have interesting analysis and access to relevant resources.
Corporate – Increasingly active partners. Many are still learning to work with startups. Can bring big scale to sales and much else besides.
Ecosystem Professional – The ecosystem is developing and specializing quickly. The people who run co-working spaces, incubators, accelerators, et.al., often have very relevant networks.

How to reward your mentor
Anne, the mentor profiled above, is looking for introductions to interesting startups and other investors. You probably know people you can introduce. Your startup may be a match for her investing profile or you may know one that is. You may be working with other investors she would like to meet.

Give to get
Any one of these three things may be the hook that gets you talking. Your ability to give her something she wants may help you get her to stick around to help you get what you need.

Match us to the task
Chemistry plays just as big a part as qualifications in mentoring, just like is does in dating. We will go into greater depth on the different archetypes later. Much depends on the challenge, the situation, the circumstances, and the match. Knowing whom you’re talking to early on can give you a significant edge on achieving the outcome you desire.

Who Are These Mentors?

Four questions to ask yourself about your mentors

Mentors do not come in one-size-fits-all packaging. Our backgrounds vary, our skills vary, and, quite naturally, our motivations vary. Understanding us, your mentors, requires looking past the standard answers and asking yourself:

  • Who are we?
  • What can we add?
  • What do we want?
  • What can you give us?

Archetypes are key to understanding mentors

The answers to these questions come easier if you categorize your mentors. The individual mentor often falls into more than one category. There is plenty of overlap, but the differences between us are often key. We include investors, service providers, corporates, consultants, and academics, to name just a few.

Match the mentor to the task

Of these, the serial entrepreneur is often the most coveted, but mentoring is very individual. Success depends on the challenge, the situation, the circumstances, and not least, the match. Sometimes the perfect mentor is who you initially least expect it be.

It’s not a task, it’s a tool

Taking the time to analyze your mentors often ranks low. The big list of ‘Must-Do-Tasks’ doesn’t leave a lot of room for ‘Nice-to-Do-Tasks’. This brings up one of the nice things about this job: it falls into the ‘Something-That-Makes-My-Life-Easier’ category. Figuring out who can help you with what saves you time so you can go faster.

Don’t do what mentors can do better, faster

To those who would say they’re too busy trying to grow great companies, the answer is simple. If you’re not giving mentors the attention we deserve, you’re not just missing out on something that could help you grow faster. You’re slowing yourself down by spending time on things that we could be doing for you. Mentoring is a very effective way to get what you want. We’re flexible. We scale.

What next?

How to do it, you ask? I’m going to examine that in greater depth. I’ve been doing this for a while, and I’ve seen it done a lot of ways. There’s data, my opinions, other people’s opinions, and all sorts of war stories. It’s going to be fun.