How to Win a Tech Start-up Competition
For a certain kind of tech start-up founder, the pitch contest offers a thrill that few other events can deliver: You have only a few terror-filled minutes to successfully demo your product (using shaky wi-fi, no less) in front of a firing line of judges who can—and will—find holes in your idea big enough to drive a truck through.
I've spent the last two days camped out at this year's Launch Festival, a tech start-up competition in San Francisco founded by entrepreneur and investor Jason Calacanis, where more than 40 start-ups competed for more than $1 million in prizes and seed capital.
In between the pitches, I asked investors and judges what it takes to make them sit up and pay attention.
1. The shorter your pitch, the more successful you'll be.
Calacanis claims that after five years of putting together the start-up competition, he's learned that the more quickly founders can articulate their business ideas, the more viable their companies usually are. Your first sentence is critical—state what your company does as clearly as possible. If you nail it, "I start thinking about what's possible to do with you," says AngelPad founder Thomas Korte. "If you don't, I stop listening because I'm trying to figure out what it is you do."
If you're given five minutes, don't practice a five-minute pitch; aim for just over four minutes. "If an investor is looking at you as a manager of an idea, they watch how you behave and how you manage time," says IdeaLab founder Bill Gross, a Silicon Valley tech veteran who picked up a lifetime achievement award at Launch. "Your demo is an indicator of how you'll manage everything else."
2. Identify the problem you're solving.
And don't stop there: How do you know it's a problem? And is it a big enough problem to support your solution as a business? These are all questions you need to answer. Here's where Space Monkey, voted best overall start-up at Launch, made the most compelling pitch. The company framed itself as a cloud storage provider that's cheaper and more secure than everything else on the market. The details of the technology behind it were complex, but the judges immediately understood the value proposition.
3. Pay attention to voice.
This one is a deal breaker at a tech conference: Don't be the one with the slick salesman voice. Oversell your nascent product and you lose credibility real fast. "Be real, be conversational," says Dave McClure, founder of the tech accelerator 500startups.
4. Never, ever use a video to give your pitch.
Start-up competitions are about giving live demos and speaking directly to the judges and the audience, says TechStars founder (and Inc. columnist) David Cohen. The fastest way to turn the judges against you? Skip the tough step of personally pitching your company and rely on a canned video instead. One poor soul learned this the hard way at Launch and took heat from the judges for it.
5. Explain why the heck people should trust you.
This one seems basic but it tripped up a number of start-ups at Launch. Often the entrepreneurs waited until they were grilled by the judges to mention that, oh by the way, their team includes an ex-Google engineer who really knows location-based technology or a former Merrill Lynch finance guy who's the perfect person to launch a beneficiary planning app.
"It's important to show that you have experience in your domain to build audience confidence," says Ryan Swagar, managing partner of venture51, a seed-stage venture firm that sponsored Launch. "Craft short bios that demonstrate to the audience why you and your team are tailor made for the job."
6. Pitch to the decision makers.
Customers want to know why they should use your product or service. Investors want to know how they will make a return. Who's picking the winning start-up: an audience of potential customers, investors, or both? "A number of companies I saw at Launch focused on the product but not about plans to scale," Gross says. The panel of investor judges were quick to nail anyone who didn't articulate some kind of growth strategy.