Wednesday, March 25, 2020

"This Won't Go Viral" - Life After Lockdown


The world is taking a big hit. Its unprecedented and we are all wondering how one little bug can do this? There are probably many others with this capability, so how do we deal with this.?

Aside from the ability of rich countries to print money and take on debt, lets consider the world going forward.

GETTING BACK TO WORK

• We have no choice but to get back to work. The cost of pausing the world for more that 1 month, and the ensuing depression, would probably be higher than the medical cost of the pandemic. It sounds harsh but we have no choice other than to somehow bite the bullet. China seems to have shown the way.

• We will learn to mass test and separate out the healthiest and send them back to work while isolating out the at-risk. (As a joke, we suggested sending them to casinos and ski resorts, Club Meds and back on cruise ships. The serious answer might be a more virtual monitoring and homeserving system.)

The biggest business opportunity takeaways are probably:

• Ideas that address future pandemics – from medical to social and any numbers of solutions in between. Mass testing is big now and so are life science solutions, such as managing our immune systems.

• Extracting value or higher efficiencies from current businesses, properties and other assets. We are going to have to find a few trillion dollars somewhere……

• Multisourcing products, bringing production home, robots and 3D Printing. The downside of globalization is that we are dependent on other sources for too many of our basic products. This time its a bug, next time it could be lots of bugs or, an enemy…..  Do you have a solution for any of this?

• Old is new again and every dog has its day. As we are seeing, some ideas are really old (malaria drugs as a possible solution to the virus) and some are relatively new but now have a new urgency (videoconferencing). Do you see other oddities, re-tooled anachronisms or "its time has come" situations?

The One Thing We Can All Agree On
No one, and I mean no one, will say their site/campaign/idea "will go viral" again.

Ever.

Wednesday, February 12, 2020

The 5 Things You Need to Know About Pitching


After reviewing thousands of pitches, we can identify a few critical issues that most startups need to understand. We also have a few traps that trip up many, and few ways to figure out what makes you look interesting to investors.

1.     Sell The Business Not the Idea: Forget about your genius idea for a moment and ask what does this look like to your prospective market and then, your investor? Completely change your point of view and tell us who will buy it and why. How much they might pay. This is the key point – event though it seems obvious to you it does not to an investor, who knows nothing about you, your industry or the problem you are going after.
2.     Whats the Headline – the One Thing That Matters? You have a million ideas and a hundred ways to monetize the idea. Maybe. But no investor can absorb all these and they are probably not seen as credible. What they are looking for is the one thing that matters. In our experience, we have usually found it somewhere near the end of the pitch – like at the conclusion. If you see people perking up at the end, thats probably your hook. Make that your headline.
3.     Know Your Pitch Structure. You should never spend more than 1/3 of the pitch explaining your idea, then you want to talk about the business proposition and how you are going to make it happen and then, why you and your team are uniquely qualified to do so. Ask for the money and tell them what its for (finishing the tech or setting up a proven marketing plan).
4.     Find the Big - or Describe the High Growth. Your idea needs to be big to be interesting to investors. If it cant grow 10 times within 3-5 years dont bother. And try to think whether it can grow 100 times because that is what investors are really looking for.
5.     Tell Us How It Scales: The only reason you need an investor is because you have an idea that will grow with the infusion of capital. They are not there to give you free advice or share their contacts (if youre lucky, they might) but to invest on the theory that you will grow at a fantastic rate. So you need to give them a formula or a conceptual structure that shows how an injection of capital can make it grow. Forget narrative, jargon or flowery adjectives and get down to gameplan.

DOs  
1.     Build Credibility: Show how your business background or experience somehow led you to or qualified you for this business.
2.     Where is the Opportunity Sweet Spot? Tell us where money is to be made. Investors arent here because they love ideas, they are here because they love ideas that can make them money. In other words, ideas are the vehicle, the destination is a wealthy exit.
3.     Talk About Sales. Products and services dont sell themselves. You sell and it is going to cost you somehow. Tell us how you get customers and how much it costs you. Better still, tell us how you can piggyback on bigger partners..Never mention viral, they wont believe you. (If you do have viral sales, show how you can institutionalize it because every investor knows that in the rare case that viral happens it can also stop just as quickly.)

DONT DOs

1.     Dont Tell Us How Big the Market Is – Tell Us How You Will Carve Out a Piece Of It - And Make It Bigger.
Just telling us how big the market is implies that if you just show up youll get a piece of it. Sorry, but it doesnt work that way. No one gives you market share, you have to earn it. Better yet, you have to make a new kind of market.
2.     Dont Tell Us What Other Companies Raised – Only What They Sold For
Just because company x raised a bunch of money in no way suggests that you will. There are a million reasons how they did that. But what they sold for has a roadmap and maybe you can follow that.
3.     Dont Say You Need Money For Sales – Say You Have Proven How To Market It And You Need Money To Scale. You are the no. 1 salesperson of your company so when you ask for money for sales, you are saying you really arent and the money is to help you find one. But if you say you have figured out how to market it, that scales.

Monday, September 9, 2019

Mugabe Had The Best Job! Why Dictating is Good for Happiness and Longevity


Mugabe's passing reminds us that the best job of the last century - as defined by pay and longevity - was Dictator.

The only concern was avoiding assassination or losing a disastrous war.

To wit:
Robert Mugabe died age 94 - after 37 years in office (Zimbabwe)
Fidel Castro died age 90 - after 49 years in office (Cuba)
Mao Zedong died age 83 - after 27 years in office (China)
Josip Broz Tito died age 88 - after 45 years in office (Yugoslavia)
Joseph Stalin died age 75 - after 37 years in office (USSR)
Mobutu Sese Seko died age 67 - after 32 years in office (Zaire)

Even those who ended badly still had magnificent runs and left the game billionaires:

Muammar Al Gathafi died age 69 - after 42 years in office (Libya)
Saddam Hussein died age 69 - after 24 years in office (Iraq)
Hosni Mubarak died age 91 - after 30 years in office (Egypt)
Adolf Hitler died age 56 - after 12 years in office (Germany)
Mussolini died age 62 - after 21 years in office (Italy)
Nicolae Ceaușescu died age 83 - after 27 years in office (Romania)

As of now, Vladimir Putin is still in training at age 66 with just 19 years on the job. (Russia)

There is something about playing god and really getting back at your critics that is just so darn good for your health.

If only there were a pharmacological alternative.

https://www.nytimes.com/2019/09/06/opinion/robert-mugabe-zimbabwe-dead.html?action=click&module=Opinion&pgtype=Homepage

Saturday, March 16, 2019

3 Essentials to Funding




3 Essentials to Funding

1.     Not Just Big – Scalable
Your idea must have the potential to grow big in order to get Investors interested. They need a minimum of a 10x return to break even on their overall investments. Even then, they are looking for promises of more because they know how often even 10x projections fall short.

2.     Traction: Some Proof of Acceptance – Patent/Likely Acquirer
Your idea might be brilliant but if no one wants it you dont have a business. Find a way to show that customers of some kind somewhere want it. Otherwise you are relying on the judgment of Investors and they are not likely to trust their judgment unless you can show them there is a line of willing takers somewhere. Patents that are likely to interest partners or protection against competitors, help too!
  
     3. Execution: A Team That Can Make it Happen and a Comprehensive Plan
Ideas dont come alive on their own. Either you are uniquely qualified or you can attract a team to make our plan work. Ultimately, the Investors are likely to choose doers over thinkers. Ideas dont get funded but people with ideas do. If you can show that you know how to get things done and get a competent team to follow you, even a mediocre idea can get funded


Thursday, February 14, 2019

What are your thoughts about the lost Amazon deal in New York?

My comment in the NY Times about the dead Amazon deal in LIC.

"Congratulations!

You should be a happy as the New York longshoremen who chased the container industry to Elizabeth, New Jersey in the 60's.

Now, there are bars and no cargo ships in Brooklyn.

Prediction: Nashville will make a country celebration album with high tech effects. 
(New Yorkers can get it by same day delivery - thanks to Amazon Prime.)"

http://www.nytimes.com/2019/02/14/nyregion/amazon-hq2-queens.html?comments#permid=30618947"

Tuesday, August 28, 2018

VC Hacks - #1: Why Investors Only Give Your Idea 10% of Their Attention


What to Do About the Other 90%!             
  
When I hear a rambling pitch that gets lost trying to describe every detail of a new idea, I have to wonder: if only you knew what little time the investors will actually spend discussing it!

If they ever do talk about you, the only question they will be asking each other is: how can we make money out of it?

If they think your idea has that potential – vast growth, solves a big problem in a credible way, maybe if this is a new and incredibly intriguing product or just that you, the entrepreneur is uniquely qualified to take on a specific market – guess what:

They are going to reduce that to one sentence.

Then, they just as quickly, they will stop talking about the idea and start talking business.
  • What does it cost to acquire customers (note, they never mention viral, because they don't believe in it!)
  • Is this enough money required to get it off the ground?
  • How big can this be and how much would they likely recoup?
  • Who would acquire it? (No one really discusses IPOs and never, ICOs)
  • How big is the competition and can they reasonably be faced? (If the competition happens to be Google, Apple or Microsoft, go home.)
  • Can this entrepreneur (and team) really pull this off?
Conclusion:
If you knew just what sentence Investors will use to describe your company, you would be way ahead of the game! (This is why we hold Capital Raising Workshops.)

Instead of fussing over every last feature in your offering, you would get down to the issue of what makes you and your team good enough to make this fly, exactly how you plan to do this and with how much.

Then, you can talk about the probable growth path and exit – who is likely to buy you, why and when.

Thursday, August 9, 2018

Why I think the Uber/Lyft Regulations are a much bigger debate than we realize.


Why I think the Uber/Lyft Regulations are a much bigger debate than we realize.

And it opens the door to Blockchain politics.

http://www.nytimes.com/2018/08/09/nyregion/uber-nyc-vote-drivers-ride-sharing.html?comments#permid=28172202
 
 
Forgotten in this discussion is the reason why yellow cab medallions became so valuable. City Hall was the bumbling architect of their rise and their collapse.

By limiting the number of medallions, the City established a monopoly, created scarcity and then let investors drive up prices. At one point, a taxi medallion was worth more than a seat on the stock exchange.

In return, yellow cabs dominated just the parts of the City that were most profitable and abandoned the rest.

When Uber and Lyft upended this, the City failed to make good on the monopoly it created and compensating for its loss, thereby leaving small cab owners suicidaly in debt.

Legally, the City has indemnity, but this issue will not go away.

Government still has the right to create false monopolies that technology will continue to disrupt. Very few politicians understand this other than creating new regulations that are generally too out of touch to matter.

It is also quite likely those regulations will be deeply influenced by special interests, leading to further public distrust.

Uber has shown that, by being truly useful to the public, even government with all its power and moneyed lobbyists can't stop them.

The real problem is not Uber but government itself and the outdated limitations of the two-party, management vs. labor debate and the backroom system supporting it.

Today's generation sees Blockchain, open ledger legislation, voting and Cryptocurrency as opening up government to the people.