It pays to practice

Last week the BUILD team of teens that I mentor had their penultimate business plan presentation. This was the team that had won the last time, so they were pretty pumped up. But, this time they didn't win - and I must say wasn't surprised. We got to see this team in comparison with teams from other schools, and I guess it's somewhat similar to VCs seeing a bunch of startups pitching to them. You've really only got one shot at it and you've not only got to be great, you've got to beat the competition, which is made up of other great teams.

BUILD does an excellent job of simulating the entrepreneurial world while keeping it within the grasp of the teen mindset. So there's a panel of judges (all adult) who're coached on what to look for, but there's also the huge subjective factor of whether a judge just plain likes the team and their presentation. Again, this is pretty much what all 'for-real' entrepreneurs face when making presentations - you've got to cover all the business basics, but the investor has to want to work with you and that could be affected by everything from the way you dress to the way your team answers questions.

Last week's loss had a couple of great lessons that apply to all entrepreneurs. The #1 lesson was 'practice'. The team had a few changes to their slides and didn't do a dry run. In fact, two minutes before they were up they turned to us and said 'we don't who's speaking when!' as every one of their 'exec team' had some slides to cover. Granted they had other things like classes and homework to deal with, but every other team was in the same boat and the fact that they didn't put in the extra hour showed as they stumbled through the transitions and gave contradictory answers - though they were quick to recover. Practicing your presentation is super important, particularly for funding (and sales) presentations, but it is very easy for people with experience to think they can handle it as they've done it before. The key here is that you may have done it before, but you and your team may not have done it before - together. I have personally experienced this. One time, my team and I worked on the slides together and knew who was presenting what, but we didn't do a practice run together - mostly because we were experienced and I was (mistakenly) thinking I'd avoid the role of a micro-manager by forcing a dry run when we were hard-pressed for time. Instead, I found myself chiming in even when it wasn't my turn to speak because my team member's ad-libbing, outside the points on the slides, was not always in sync with our overall message. It proved that we were articulate and could think on our feet, but it also showed that we weren't prepared - thankfully it was a friendly group and we weren't demolished.

The other important point is the attitude. Our teen team had one faux-pas when talking about why they would be successful (again, ad-libbing) and made a statement prefaced with 'no offence'. It was mild and raised a laugh and was not a deal-breaker, but it may have gone the wrong way on the subjective factor with some judges. Judges, as well as investors and customers, are funny that way - they want the team to show confidence, but not arrogance, and there's a clear difference. Confidence appears to be based on what you have done and what you have learned, arrogance is based on who you are.

But it was all good and a great learning experience for all of us. The winning team, in my opinion, won not only because of the smooth delivery of their presentation, but because they presented themselves as a well-knit team - another lesson for all startups. And a good rule of thumb - don't ever say anything during your pitch that requires 'no offence' before it, unless you're talking football.

After a fall

A few days ago there was a story in the Merc News about a startup that went belly up. Most of my recent posts have been about soldiering on through through the downturn and keeping the startup fire going, but, companies do go under, and this is an interesting story one such.

You can read the full story here, but in brief it is about Hammerhead Systems that as recently as three years ago seemed poised to go big. After all, it had what conventional wisdom holds to be the key elements for success for startups: an experienced team, solid technology and plenty of funding. It must have looked like a sure thing to many people because we're talking serious money here: $100 million (it's hard not to think of all that we can do with just a tiny sliver of it!).

There's probably a bunch of would-have/could-have/should-have considerations, but interestingly the primary reason given for the failure is 'circumstances beyond their control'. The article covers industry turmoil, deals that became undone and buyers that didn't materialize. Though there is mention of some mistakes that were made, the team and the investors cite the times we are in as being the primary cause of their melt-down, preventing them from even being able to sell what they consider to be valuable technology.

By the way, I'm not about to second guess the experts, but I do wonder how, even after the dot-com bust, so much money could be poured into a company before they had real customers. I guess they must have had a good story to tell. But, the reason for posting this story is not schadenfreude, but a couple of items about the people involved:
  • The CEO (also a member of the founding team) is the one going down with the ship, doing his best to sell the technology. Another example of the unmatched dedication of the founder/CEOs - they don't quit easily.
  • The co-founders would like to start another company. Though this experience was painful, they 'love startups' and are looking to do it all over again.
This is probably a little bit of a cautionary tale, there's the whole 'money is not everything' angle for example. But, it is also an encouraging story of true entrepreneurs who don't give up easily and are willing to go after a new dream and build a new venture - it's going to be people like these that get the economy humming again.