Startup Chatter by Donna Bogatin

ENTREPRENEURS: On your mark, get set, make your ELEVATOR PITCH!  The just launched StartUpAlpha.com Pitch Community lets you do just that, online (professionally and free of charge).

How about when you get the fabled two minutes in a real elevator, face to face with a target, captive audience? What should you hone in on then?

Gilad de Vries, Principal, Carmel Ventures, has a few words of advice and he shared them with me, here at Startup Chatter.

DB: If an entrepreneur happens upon a prospective investor in an elevator, what should he or she “sell” in a two-sentence pitch to pique interest?

GV: Start with a bright sentence about the company, something short that summarizes the vision, mission, need, solution, and/or differentiation points.  Follow with a few words about yourself–for example, “I’m a second time entrepreneur, with previous experience in…Then say something about the team. 

DB: How does a business plan successfully convey big market opportunity potential while employing reasonable growth assumptions?

GV: A thorough bottom-up plan is in  most cases better than a top-down analysis of how to get market share in ahuge, billion dollar market. It is important to state clearly all the assumptions of the model and be able to plug different assumptions in.  A rule of thumb: Projecting revenues of $30 million plus within three-four years is usually not realistic.

 DB: What are the two biggest hurdles startups face in the first year of operation?

GV: 1) Unrealistic expectations and 2) Management team development.

In many instances, entrepreneurs identify their own weaknesses too late, and even if they notice them, may react too slowly, fearing to “rock the boat.”  The founder, CEO, and/or team are not always experienced and expectations may be unrealistic. In some cases, the CEO is overly confident and makes mistakes. Market expectations are often not well honed. Startups may believe in their great product, but product development does not always correspond to market demands or needs. Business development is often not a core developement concern. To build a solid startup foundation, entrepreneurs ought to focus on a team development and go-to-market strategy.It’s important to clearly define management positions essential for leading the company and the relationships between roles. The right people must be in the right positions. Also, before writing any code, develop a brand vision and market positioning.  Interact with the market from day one and maingtain market dialogues: Talk to analysts, attend conferences, and “feel the market” to understand the competitive landscape.

DB: What are the two biggest advantages startups have over incumbents when they first go to market? How can the opportunities be maximized?

GV: 1) Time to market and 2) Flexibility.

Startups can identify niche needs and market segments. Responding to the target needs should pose a significant barrier to the incumbents, so they will find it difficult to respond.  

DB: What personal qualities do most successful entrepreneurs share?

GV: Most successful entrepreneurs are first of all winners. They have a dream and a vision, but also two feet on the ground, knowing they can accomplish the goal. If someone only has a vision, then he or she is only a dreamer, and if someone just executes, then he or she is only a manager. A winning enrepreneur has both qualities and is able to isnspire others as well to join in the mission.

Important entrepreneurial qualities include: Solid business sense, confidence and domain expertise. Successful entrepreneurs are adaptive and resilient, as hard times and bad news are part of most ventures’ life cycles. The best entrepreneurs know their strengths and weaknesses and surround themselves with people who complement their talents.   

THANKS GILAD!

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