

The Sad State of the Startup Pitch - replicatorblog
http://bryce.vc/post/30383589458/the-sad-state-of-the-startup-pitch

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jandrewrogers
This is just a case of the pendulum swinging too far in the opposite
direction.

I remember when early stage startups were expected to have elaborate 20-page
business plans, detailed financial projections going out 5 years, and
countless powerpoints of market positioning and fit. It was all bullshit but
you were expected to do it.

Over time, that exercise in fiction loosened up. Investors became more
interested in if you really understood your product, your market, and what it
was going to take to bring your product to that market. Demonstrations of
sufficient competency, adaptivity, and intelligence were required but
investors only demanded documentation of things you could actually say
something meaningful about.

Somewhere along the way, more VCs became obsessed with shiny clicky demos
(nominally, "product") above all else, often to the exclusion of any
substantial discussion of the actual business and market strategy. This demo
obsession is a form of mitigating execution risk but it is far from the only
kind of risk in a startup and often the other risks are being ignored when
this happens. The startup world is a market, supply and demand. Wannabe
startups are providing what many VCs are demanding; Bryce may or may not be
one of the VCs encouraging it but he swims in a market where many VCs are.
Many people who should not be doing a startup think they can because plenty of
VCs will actually consider their half-assed ideas.

It falls on both the VCs and startup founders. VCs need to stop acting as
though a shiny demo trumps all other funding considerations and startup
founders need to stop acting as though you can put serious effort into the
business parts later as long as you have a vague idea and a shiny demo.

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jmathai
This is a bi-directional relationship. It's not as if VCs are benevolent
members of society looking to help entrepreneurs out. Both sides of the
equation need each other.

I didn't like the tone of entitlement here. As a VC you're not entitled to
just sit back and have entrepreneurs know exactly what you expect and deliver
the perfect pitch. Part of _your_ job is to see the diamond in the rough. An
entrepreneur who's dedicated as hell with all of the skills to build a
successful company but lacking in the ability to be a good presenter, for
example.

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taylonr
I'm not convinced this is a problem specific to startups. People don't know
how to do presentations. I saw it while in school. I had to take a technical
writing class that required a presentation at the end. Most engineers suck at
presenting.

But I'm also not convinced it's limited to engineers. I've sat in countless
presentations that have sucked and a few that have been amazing.

Part of the problem is, presenters rarely ask "What would I want to hear if I
was in the audience?" If you answer that question you'll be better than 80-90%
of presenters, regardless of if your speech doesn't flow perfectly etc.

For example, when I was 8 or 9 my sister made us chocolate pudding. When it
had set, we started eating it. She said "I don't think this tastes right" and
washed it out. I was happy to have pudding and ate my whole bowl. Next morning
I woke up with 103 degree fever, couldn't stand up straight, etc.

My mom takes me to the doctor who runs some tests. He comes back in the room,
looks at me laying on the table and says "Looks like you've got food
poisoning. I'll be back in a minute." He leaves and in my mind I picture
bottles of bleach, skulls and cross bones, TV dramas where someone had been
poisoned etc. My mom can easily detect this. She chases the doctor down and
says "I think you need to go back there and explain what food poisoning is."

Doctor comes back explains in simple terms that I'm not going to die, the milk
had spoiled etc. I got some medicine and bed-rest for the next 2 days and was
fine.

Twenty-six years later and that account is still vivid in my mind, in part
because my doctor didn't think "What would an 8 year-old need to hear about
food poisoning?"

It's not just about start-up pitches, it's about communication. And we, as an
industry, suck at it.

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hammock
>Here’s an idea, if raising money is such a bother than build products that
don’t require you to do it.

There has been a lot of talk on HN that you don't need a non-technical
cofounder. Bryce makes a good case for why a business-savvy partner can be a
huge help.

~~~
Retric
More large tech company's started out without a business person than without a
technical person. I suspect a large part of this is the importance of a BS
detector when delegating things. Or as PG said, _The more of an IT flavor the
job descriptions had, the less dangerous the company was. The safest kind were
the ones that wanted Oracle experience. You never had to worry about those.
You were also safe if they said they wanted C++ or Java developers._
<http://paulgraham.com/avg.html>

It's not that you can't build a good website with C++ or an Oracle back end,
it's if your company desides to use them your probably also making a lot of
other stupid decisions.

PS: _(During the Bubble, Oracle used to run ads saying that Yahoo ran on
Oracle software. I found this hard to believe, so I asked around. It turned
out the Yahoo accounting department used Oracle.)_
<http://paulgraham.com/vwfaq.html>

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edw519
This works both ways.

[Background: Developer with many years experience, many apps written, many
existing customers, deep domain knowledge, and multiple exits.]

I rarely pitch, but when I do, some of the things I hear:

"No one will buy that." (They have and they will again.)

"They will use <x> instead." (When my customers have already begged me for an
alternative to <x>.)

"You have 10 minutes to explain the technology." (After 2 minutes: "Who cares
about that? Where's the business proposition?)

"You have 10 minutes to explain the business proposition. (After 2 minutes:
"What difference does any of that make if you can't build it?")

When I've pitched with a co-founder: "We don't like your team. You don't have
a enough of a track record."

When I've pitched as a single founder: "Where's your co-founder?"

When I've described the distinctive advantage: "OK, I get it. We can combine
that with <x>," effectively negating the distinctive advantage.

"We want a home run." (But when you give them a potential home run, they get
scared that they'll be in too deep before seeing returns.)

"We want to see early returns." Then: "But where's the big idea."

"We want a product." Then, when you demo a product, "But your customers will
want a service."

"We want a product, not a feature." Then, "But where are the features that
will grab your audience?"

"Give us financial projections." Then, "This is science fiction. How could you
know?"

Or "Where are the financial projections?"

"What happens if you get hit by a bus?" (Too stupid to have any response.)

Face it, OP, for every stupid pitch you see, I see stupid money jumping over
the dimes to get to the nickels. For every intelligent investor, there are
dozens of heirs, government admins, enterprise idiots, lottery winners (from
lucky exits, not lotteries), and angel posers. You're not the only one whose
time is being wasted.

~~~
pedalpete
I don't really take this as a valid response to the original post. Yes, you'll
run into stupid money, but that doesn't mean that all money is stupid.

As I'll respond to the original post, how are the people pitching being
qualified, and I'd suggest you do the same with the investors you speak to.
I've met with investors who ask these sorts of questions, as well as many who
actually try to add value in the meeting rather than just seeing what I know.

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ThomPete
Its funny

You see intels original 1 page pitch

<http://000fff.org/stream/#04>

and you realize, it really do not need to be that complex.

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keiferski
I run a pitch-creation service (pitchremix.com) and have definitely noticed
this. Many founders don't know how to communicate _what their startup does_ in
clear, concise language. They may be building a super-complex world-changing
technology, but no one knows (or cares) because it's hidden behind a wall of
stream-of-consciousness gibberish. A little structure goes a long way.

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russtrpkovski
I should get in the pitch deck making business. Anyone need help?

Qualifications: Over 10,000 hours of PowerPoint, management consultant, story-
lining expert

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pytrin
To me it sounds like a cop out from a jaded VC. I understand where it's coming
from - VC take multiple pitches a day, most of them bad - and not just because
of the delivery.

It's the VC job however, to be able do detach delivery from the actual
opportunity. If he can't open his mind and consider every new pitch meeting as
a huge opportunity to his firm, he'll pass on a lot of future successes.

