One of the most frustrating things for me as a venture capitalist is the quality of pitches I hear every day. No, I’m not talking about the content (if it was about the content, it would have been time for all of us to go home), I’m talking about the delivery. Israeli entrepreneurs, with some exceptions, just don’t know how to deliver a good first pitch – whether elevator (30 seconds), short pitch (5 min) or a full pitch (~40 min). I’ve spent a lot of time thinking about this, trying to analyze why, wondering if there is any way I can help drive change – I honestly think many promising startups are missing out on funding opportunities simply because of their inability to get their vision across. So here is the result of my initial analysis – would love to hear your thoughts – as I think getting your message across is one of the most important aspects of being a young entrepreneur.
Let’s start with what isn’t the problem:
It is not about disrespect of the process – most entrepreneurs I’ve met have spent a tremendous amount of time in building their presentation. Usually I get to see meticulously crafted slides – with visuals, a ton of text, and animated transitions (and that’s part of the problem of course…)
It isn’t lack of resources – there are plenty of examples for well crafted pitches and videos of promising entrepreneurs delivering them. Whether in conferences (Disrupt, TED, etc) or via other web resources (youtube, blogs, etc)
It isn’t business incompetence (usually) – most entrepreneurs know their markets well, understand the painpoint their are trying to solve, and in many cases have built great products that solve that painpoint. (more…)
Last week I attended the Techstars New York demo day. It was pretty awesome. Great venue, great people, and most importantly, a standout class of entrepreneurs who delivered pitches that I felt were right on. I want to talk about the 3 startups that impressed me the most, and share with you my initial unfiltered analysis (so take it with a bigger than usual grain of salt). Should give you some insight on my thought process during these 8 minute pitches. Remember these are the best 3 in a great class of entrepreneurs – so the number of question-marks is relatively low as compared to the typical pitch a venture capitalist would hear. If you want to read more about all the startups, I’ve shared some links at the bottom of this post that cover the entire event.
Contently – These guys went first, and boy did they set the tone for the event… CEO Shane Snow (@shanesnow) gave a pretty flawless pitch, presenting contently as a marketplace that connects publishers with freelance writers. Like many venture capitalists, I am interested in marketplace pitches; they have some general attributes that make an interesting venture investment – they are “close to the money” as they manage financial transactions, they can usually scale well, and they need little capital to get off the ground. The giant challenge, which is also the case in Contently’s case, is how to build traction on both sides of the market – the “chicken and egg problem”, while keeping a balance across both sides. Balancing supply with demand – so you don’t have a ton of starving writers and few publishers, or a ton of publishers seeking content and only few writers to supply them with it. If the company can execute well on this challenge, I think they are operating in an interesting market that has yet to be interrupted, and are definitely one to watch… contently.com
ChatID – When these guys came onstage it felt almost odd to hear a pitch that has a big piece of technology as part of their competitive barriers to entry – gotta love it. Needless to say, it was not your typical TechStars pitch… ChatID is an internet infrastructure play – it gives businesses the ability to engage with their customers directly via chat anywhere on the web. The example used by CEO Dan Herman (@Dan_Herman) is a customer searching for a flight on Kayak and being able to connect to a chat with a Continental representative from within the Kayak offer. This chat would be the Continental chat channel used across all publishers. Chat aggregation of sorts. This is a really interesting play- very sticky (why would you ever want to change?), clear need, and obvious value. Monetization is less clear for me, and would be the challenge in making this a big business. chatid.com
Dispatch – Headed by Jesse Lamb (@JesseLamb), these guys make managing your cloud content simple – giving you a simple interface to manage your online media & files. In simple words – drag & drop your facebook photo to picasa, your document from dropbox to google docs, etc. I actually saw an Israeli startup that had built this product 2 years ago – they had pretty strong technology, but UX had a lot to be desired… Wasn’t sure the market was ready for it then. Not sure if the market is ready for it now. This is a tough one for me to asses. Don’t get me wrong -clearly our dependency on web services and the content they store for us is constantly increasing, but I’m not sure this won’t be solved by APIs across the major platforms. I think this is a space to watch – not sure I would consider investing now, but if the user experience is top notch, Dispatch could become a huge play when the time is right. I just don’t know how to call it right now – but definitely worth monitoring. dispatch.io
As I said, all 12 presentations were great – and I really felt this class is outstanding. I hope the next TechStars NY class (starting March 2012) will include an Israeli team – I think a lot of Israeli startups can benefit tremendously from what the program has to offer. In the meantime, if you are interested in TechStars, whether as an entrepreneur or investor, I highly recommend you take a look at the new reality show (?!?) that looks at Techstars NY first class - http://www.bloomberg.com/tv/shows/techstars.