Why you should stop wasting time on pitching events!
Ditch the Pitch, build your business no matter how much bootstrapping you have to do.
Raising venture capital has become a cause celebre’ lately. Company X just raised $10 million and it’s all over the news, celebrated as if it was an exit. Unfortunately, this has led to a culture of spending money, instead of making money and building a scalable, sustainable business.
It’s not unusual to see startups with a business model centered around their burn rate. Many a company today are measured by how much they’ve raised in venture capital versus how viable their actual business model is. One look at Silicon Valley and we tend to forget that these businesses at a fundamental level need to show a path to viability. Viral coefficients, K factors, etc. though they sound good in certain circles, they don’t give you a basic idea of a startup’s viability.
Warren Buffet once said if you can’t explain it simply, you don’t understand it well enough. This rings true when it comes to the pitch culture that’s led many a Startup into the dark hole of Calcutta. Here is a bold statement;
Ditch the pitch!
You heard that correctly! Pitching events are largely a waste of time. I challenge any startup founder worth his or her salt to dispute this unspoken common knowledge in the startup world. To juxtapose my point, below is a summary of the typical pitching environment;
1. 50% of the crowd are lawyers, consultants, and accountants trying to sell you their services
2. 50% of the other 50% are there for the social aspect / other startups networking
3. 50% of the remaining 25% may have invested 10–25K in some startup many years ago. Now they’re on every angel mailing list and show up to every event with a badge that says “I’m an Investor”, but they’re not investors, again it’s about being seen in certain circles. They will ask questions, give opinions, and like being introduced to the crowd. They like the attention but in actuality, they have no business being there.
4. 50% of the 12.5% that’s left are the event organizers, they might make introductions or broker deals but they’re not investors. They are organizers.
5. 50% of the 6.2% that’s left are actual investors with an existing portfolio. They’re there by invitation, they’re not there to see your pitch. They’re there to catch up with colleagues and just see what may be out there. 99% of the time they’re not even paying attention to your pitch.
6. 50% of the remaining 3.1% may be looking for promising startups to invest in, but they’re not looking for companies at a pitch event. They already have a full portfolio and only do warm introductions. They’re only there as a favor to someone within their circle.
7. The 1.5% that’s left are your colleague’s friends or buddies, or an investor you’re already talking to that you’ve convinced to come to see you present.
The morale of the story, pitching events are a thing of the past. Bootstrap, get your MVP ready and just launch already. An investor once told a startup “I’ll be in the lobby having a beer, when you’re done with the pitch you can give me the highlights”. Real investors understand the dynamics of the pitching game. It’s got nothing to do with how fancy your deck looks, there’s either a value proposition or there simply isn’t one. Many startups spend time (and money) running around pitching to anyone that would listen. If the statement holds true that time is our most valuable asset, then stop wasting time at these events. An investor is more likely to fund a company that spends all of its time selling, getting real user feedback, translating this into action and measuring results, i.e. building the company, and they will seek out such companies, compared to the ones that show up at every pitching event with fancy slideware instead of the shipped product with some market feedback/data.
Don’t waste valuable time at pitching events, just launch already!