1 Notes
Try before you buy
Gavin and I had a long chat over the weekend about what really makes angels and VCs invest, and what it is that entrepreneurs can do to improve their chances of walking away with a check in hand.
Aside from the strength of your idea and pitch, obviously, we speculated that perhaps it mostly comes down to ‘luck’ - you get introduced by the right person, you pitch at just the right point in a funds life or maybe you balance the portfolio nicely. These factors could certainly play a role, but maybe just like with many other things in life, investors just like to try before they buy.
Fred Wilson often says that he typically invests in products that he uses already (most notably with his recent investment in Boxee). Fred has an uncanny ability to spot products that will go on to appeal to a broader audience - he was using, and investing in, Twitter years ago when one-to-many messaging was an unknown concept. The point is, unless he is using the product already, he is probably not going to invest.
As entrepreneurs, we are often encouraged to ‘get something built’ before going out to seek funding. I would extend that advice to include ‘get people using it’, even if it is just a few hundred people playing around and interacting with a beta version.
If you have a pitch meeting set-up with an angel or VC, get them using and interacting with the product as far in advance as possible. It totally shifts the focus of the discussion that you have with them - no need to explain the idea, instead you’ll be discussing what does and doesn’t work.
Seems obvious, but its amazing how many entrepreneurs stroll in with powerpoint alone.
