Move over, Simon Cowell. Two panels of venture capitalists had some harsh words for presenters at the annual Launch festival on Monday. Several companies were blasted by skeptical investors--despite winning strong support from the audience.
Here are a few pitching dos and don’ts from three of the conference’s most controversial presentations.
Don’t burn your bridges.
Jawfish is a gaming platform that supports multi-player tournaments on mobile devices in real-time. They connect gamers and set up tournament-style games--like poker or word search games--that move quickly and engage users. And they’ve partnered with the online gaming giant Big Fish to offer existing popular games to users.
At the festival, Jawfish CEO Phil Gordon announced that the company soon would be launching a series of original games this month--many of which would replace those currently offered in partnership with the company Big Fish.
“So your product will directly compete with [your partner]?” queried one panelist.
This kind of behavior raises a red flag for investors, said venture capitalist George Zachary of Charles River Ventures. Bridge burning doesn’t look good, he explained. Nobody wants to put money into a company who might run out later.
“When I hear you say: ‘I’m going to screw my partner,’” he told Gordon bluntly, “I think: I’m never going to write a check to you. Ever.”
Don’t take gambles (with your reputation).
Travel booking site Hubskip wants to shake up how you pay for flights--not an easy thing to do, according to Launch panelists.
“When you say ‘travel’ my mind instantly goes to sleep,” declared Robert Scoble, of Rackspace. “My mind goes to sleep and you have to wake it up again.”
Scoble may not have been impressed, but a straw poll of the audience by conference founder Jason Calacanis revealed that consumers are still interested in a travel agency that can save them money--and Hubskip has promise. The company seeks to offer cheap flights to consumers, without booking fees, without redirecting them to external websites, and with the added benefit of refunds when the price of tickets go down.
Here’s how it works: Consumers reserve tickets with Hubskip, then the Hubskip uses price prediction software to delay purchase of tickets from an airline until prices have dipped--making the company money, and offering the consumer an additional refund in the event of cheaper tickets.
Sounds like a sweet business model, right? Hubskip makes money, and saves the consumer money. It’s a win-win.
Actually, it’s a tremendous risk, says Matt Coffin of Coffin Capital Ventures. Hubskip has to eat costs in the event of an incorrect price prediction, and the company risks a very serious setback if an airline should sell out before the company purchases tickets on behalf of customers. If their price-prediction algorithm is wrong, Coffin says, consumers may lose their seats on pre-booked tickets.
All you need is one person to lose their seat, write a bad review, and your reputation is squashed, he warned.
Do keep a thick skin--and an open mind.
Despite the sometimes brutal beatings presenters received at the hands of potential investors at the Launch festival, panelists and speakers seemed to agree: The best thing these entrepreneurs can do is learn to take criticism.
Don't shy away from criticism and use it to make your product or service better, said keynote speaker Chamath Palihapitiya, founder and managing partner of the Social + Capital Partnership.
He concluded with a piece advice for entrepreneurs in their efforts to win funding from guys like him. “Have a thick skin,” he said. And don't be afraid to prove naysayers--hot shot investors included--wrong.