Most of the entrepreneurs I meet will walk right into this one. Here's how to be prepared.
Almostevery day, I meet and speak with young entrepreneurs trying to get their businesses off the ground. I’m willing to give almost anyone a quick chance to explain what he or she is trying to do. Anything that you can’t explain about your business in 10 minutes really isn’t worth saying.
That means you need to focus. One of the nastiest things venture guys like to do to “newbies” is to ask them how big their businesses can be and how many opportunities and directions there are to build the businesses. And when they charge off into the future and start building their castles in the sky, the VCs look at one another, roll their eyes, and say to themselves, “Boy, this guy’s not focused at all.”
After 50 years of doing this, I can make these initial decisions with a high degree of accuracy in a matter of minutes. My guess is that VCs do the same. Yes, I will miss out on a few real opportunities and turn down some very talented people, but, by and large, especially because we’re all dealing with limited time and scarce resources, the system works pretty well.
Here’s why. It’s not that I’m so perceptive and smart; it’s that way too many people make it too easy to turn them down because they’re so unprepared. They can’t take their best shot, even when the opportunity is there, because they don’t understand how to make the most of that short window of time. As we used to say in the music industry, it’s easy to tell when a song is bad, but only the public and the market decide what sells.
It’s the same story when an entrepreneur is describing a new business. If you’re all over the place; if you’re trying to be all things to too many people; if your story is so complicated that it’s hard to follow; or if you’ve got a solution in search of a problem, it’s going to be pretty easy to say, “Thanks, but no thanks.” You’ve got one shot, one moment, and one opportunity to get right to the heart of the matter. The most crucial part of the entire process is to tell a simple story.
How simple? Your story should answer three questions. These are the same questions that will inform and guide your company for its entire existence. The answers are every bit as significant for each and every employee as they are for investors. So you need to get them right at the outset. The answers might change over time, but the fundamental questions never do. Here they are:
Who Are We?
Management and team members’ relevant experience and credentials
Where Are We Going?
Short- and long-term objectives and goals. Tell me about your milestones (in brief) and when you plan to meet them.
What problem is being addressed and solved-–time, money, productivity, status?
You’ve got to be a ruthless editor. The hardest choices are about what to leave out, not what to include. Detail and elaboration are forms of pollution. Cut to the quick. And stick to your story.
It’s an old but important trick from debate class: Tell the story you need to tell, be relentless, stay on point, keep it short, and make the limited time that you have count. Everything else can come later. Bottom line: Tell a simple story.
Entrepreneur Howard Tullman: Grind, Hustle & Payoff
Enrollment at Howard Tullman's newest business venture, Tribeca Flashpoint Academy, has increased six-fold since it was founded in 2007.
HOWARD A. TULLMAN is the CEO of 1871 – Where Digital Startups Get Their Start and the General Managing Partner of G2T3V, LLC and of Chicago High Tech Investment Partners. He is a member of the Chicago NEXT & Cultural Affairs Councils and the Illinois Innovation & Arts Councils; an adjunct professor at Kellogg; and an advisor to many start-ups. He is the former Chairman and CEO of Tribeca Flashpoint Media Arts Academy. Over the last 45 years, he has successfully founded more than a dozen high-tech companies. @tullman @tullman