Wednesday, October 12, 2011
How to Kick-ass in VC/Grant Pitching (Malaysia)
They are on the lookout for the Innovation / Disruption / Breakthrough.
There are a few problems. New Innovation are very risky, and most people don’t understand it. Can you actually see Innovation or did you see a Clone? Google in the Early days, you see it as new Innovation, or just another young kids trying to challenge Yahoo (and they probably would fail). VisiCalc is new innovation, but what about Lotus Notes and Excel? Can you foresee Facebook overtook Friendster and MySpace? Can you identify them before it happens? iPhone is Innovation, but what about iPad? What do you think of Android and iOS? iOS wins because of better usability/interface/experience? What if I tell you that we are going to build a better TripAdvisor, because we will create a better user interface and great user experience? How are you going to quantity and evaluate that? If you recognize an innovation, are you ready to take the risk? The idea sounds good, but the evaluation method is just not reliable.
How much track records is enough?
Do they investor really focus on the idea, or the team? Big time VC always say it’s all about the team, but I get more questions about the Idea than the team. Maybe they doubt my team, but you don’t get a chance to defend it and they never openly question your capability (they’ll conclude that you can’t, and that’s it).
I had seen a CEO fascinated with someone graduate from Oxford, so I guess if you graduated from Harvard or MIT, it helps. I guess it helps if you worked in Microsoft, Google, Facebook before (agreed by AngelList). And perhaps it you are a Celebrity (or a pretty Girl), it helps as well. If you have the connections which helps the business, that's valuable as well (if you try to sell online musics, and you have connections with the music labels).
If you are a serial entrepreneur, it helps (but some agreed that people who had make the big bucks before, aren’t pushing as hard as they used to, but investor still think it’s a safe bet). If you are a first timer or done some small projects before, then you are screwed.
Since I don’t have any of the above, I try to leverage on my best project: Malaysia Most Wanted Food & Restaurants. My pitch is that it’s the best online Food & Restaurant Guide in Malaysia (proven by Alexa), that it had 300,000 monthly visitors. Somehow this track record doesn’t really work its magic. Maybe I need the number to be 1 million (then I won’t be here begging for RM 100K), or people just never really use or heard about it before (thus they don’t really believe me, but they don’t question me publicly as well). Perhaps I sound too arrogant? My thought is, if I repeat this statement enough times, people will actually pay attentions and start to believe.
Knowing their prejudice or preferences?
I guess everyone have their own preference and prejudices: some like apple, and other like orange. If you try to sell an apple to someone who likes orange, you are going to have a tough time; if you sell it to the right person, then the magic just happens.
While I was proposing my Travel idea, there is all kind of oppositions (perhaps people like to take a travel package instead of planning their own travel?). Then one of the panel browse through our sites and found Malaysia Price Checker, and he was amazed by our database; his words, “There are many people proposing a price checker, and none of them have the database; and here you have it.” Then I mentioned maybe there are limited potential with price checker, and they actually defended the idea and say, “You never know.”
This brings me to human psychology: people always like their own idea better than others. I like my own ideas better than the panel, so it’s hard to get them to like my idea. If I can turn my idea to become their idea as well, then miracle will happen. I am no longer selling my idea, but they will automatically buying their own idea.
Tips: turn your idea into the investors’ idea. It’s not the same as changing the idea (from Travel to Price Checker), but get them to believe that Travel is their idea as well. I know this could be tricky, but it’s extremely priceless as well.
It’s facts and words, or emotion and personality?
As a technical person, I tend to focus on facts rather than emotions. I believe in reasoning, thus my slides are populated with facts, features and numbers. I found that though I may speak a lot, but very little of those actually goes into the head of the Investors. I show a slide about our unique selling points, but people still ask me again. Someone asked why I don’t have XXX, and I just show a full slide talking about XXX.
Something is not working here. Either my presentation skill sucks or I speak too fast, or I talk about too many things which loses focus. Last time I jumped straight to be point, thus some people don’t understand what it is basically about; now I add in more basic information to cover the grounds, then people got bored and lose focus on the in depth stuff.
Again, I think emotion and personality play a very important role. Most of the time I am quite nervous, so I am not sure I portray what kind of personality or emotion (Confident? Rookie? Defensive?).
A guy wanted funding to setup a photo studio, and he bring along all these beautiful child photos for display. Though the judges criticize his business plan sucks, but they are still willing to give him a chance (I do feel the photos do stir up great emotions). Perhaps they judges don’t know much about photography, thus can’t comment much, haha? (Tip: if they judges don’t understand about your industry, you might have an advantage). And he got a pleasant and humble personality, and perhaps I am too “arrogant” and “defensive” thus not so likeable?
Then again, do we want mister goody two-shoes as entrepreneur?
Attack is the best Defense?
Most of the time, we are playing defensive as the investors throw questions at us and challenge us. I try to dissolve that with reasoning and arguments; which might work or might not (you might have the right reasoning, but some people just don't buy it; but neither do they voice it further). My feeling is we are always at the disadvantage here.
Perhaps we should break an attack with a counter-attack. If people say your site sucks, so what are the better sites? If they say your number is low, so you mean you actually have a higher number than us? Be careful playing with fire thought, as sometimes people takes these things quite personally. If they are not happy, they ain't gonna invest either. So, how much backbone do we need?
Experience, and more Experience.
Yes, experience is doing presentation and giving pitches do helps. There is always room for improving the slides, and improve your presentation focus. Once you kick the “nervous” element out, perhaps you would be more aware of what is actually happening. Perhaps we can kick the “defensive” element out as well, and be as cool as a cucumber.
Though I usually come out quite dissatisfied from each presentation, but I did learn how investors behave, how to improve the focus of the presentation so that the panel really get it (avoid confusion, avoid lost focus) and maybe some new idea about my product. And perhaps how to handle the usual questions as well.
Warning: You are getting advice from someone who had never secure any funding before :) Read about our failures and lessons.