4 Networking Myths (and How to Avoid Them)

Whether you’re still in school just starting your job-hunt or have been out in the working world for years, it is virtually inevitable that you’ve encountered firsthand the power of professional networking. Maybe you heard about about a job that was filled before the news of an opening even hit the street? Maybe your friend told you about a consulting gig they scored because someone made a recommendation? Or maybe you yourself “got a lucky break” and got an introduction to a major potential client through a friend of a friend of a friend? If so, why does the idea of getting out and building the professional network of your dreams leave you quaking in your boots? (And if you are starting to build your professional network, here’s my cheat sheet on the “5 Rookie Networking Mistakes (and How to Avoid Them)”). Let me guess: You feel like there’s no reason for anyone to talk to you. You’re terrific in a one-on-one conversation, but the idea of walking into a room full of strangers is terrifying. You know you need a professional network to get ahead, but are incredibly busy and are afraid the whole networking thing will turn into a crazy time suck. You love the idea of building a professional network, but have no idea how to get started. Busy folks (like you and me) don’t have time to waste on activities that aren’t helping them move upward and onward. If you’ve ever landed in a mob of people desperately handing out business cards at an event, you already know that there are there are PLENTY of...
Pitching and Market Size (and Why “It’s Big!!!” Isn’t an Answer)

Pitching and Market Size (and Why “It’s Big!!!” Isn’t an Answer)

One questions I inevitably ask entrepreneurs is “How big is your market?” It’s a question I rarely get a good answer to. Some of the recent answers I’ve gotten have been “It’s a growing market!,” “It’s huge with millenials!”,” Millions are spent!” and the always reliable “It’s big!!!!” None of those is a good answer to that question because they don’t answer the underlying question which is on every venture capitalist’s mind when they’re evaluating a startup: Is the market big enough to support my investment? Remember: for a venture capitalist to make a successful investment, they need to get return on the order of 10-20X their investment. (For example, if a VC invests $2 million dollars into a $4 million company to make it a $6 million dollar company, the company needs to be able to grow into a $60 million company for the VC to get a 10X return). If the market isn’t big enough to put that kind of return in the realm of possibility, it makes no sense for the venture capitalist to consider investing. And it is very, very possible for a startup to address big markets, growing markets and markets that are huge with millenials that will never be large enough to support a venture capital investment. So if you are pitching a venture capitalist, your job is to convince him or her that your market is big enough to support the investment you are asking for. How do you do that? Actual facts and figures. How many dollars are already spent in the market? How many people? What is the growth rate...
On Startup Failure…

On Startup Failure…

A young entrepreneur (let’s call him “Turk”) approached me at an event recently, and he had an interesting dilemma. “I’m starting a new venture,” he said. “And I think it’s really good. But how do I make sure I’ve put together all the right pieces so I don’t fail?…” Oh, the $64,000 question…. He went on. “…. Because I don’t want want to be thought of as a failure. I really don’t want VCs to associate me with failure.” Well, first of all, as I told Turk, there is NO way of knowing if all the right pieces of a venture are in place for success. If there were, venture capitalists wouldn’t be striking how 80-90% of the time on their investments. Besides smarts and hard work, startup success still requires good helpings of timing and luck which aren’t in any founder’s control. Because of that, VCs are not perturbed by failure. Failure comes with the territory, and what VCs will evaluate is how you handled that failure. Did you learn from that failure and pivot quickly into a new business model? Refine your marketing and rollout plan? Realize that you needed different skill sets in your team and start recruiting for those skills? Or did you stubbornly continue down an unfruitful path wasting months of time and money? Nobody plans everything correctly and makes the right decisions 100% of the time. Almost all successful companies have done their share of pivoting along the way. The important part is that they didn’t spend long periods of time wallowing in what was not working. After all, AirBnB started life as...
Startup Marketing 101: “Dating” Your Customer

Startup Marketing 101: “Dating” Your Customer

Most of the entrepreneurs I work with are thinking about raising funds or have already started the process, but I also advise a lot of entrepreneurs who are just starting their businesses. I was talking to one such entrepreneur last week. Let’s call him “Stan.” I met Stan recently at a startup event where he showed me a neat little gadget which he developed, had manufactured, and started selling. Unfortunately, sales have been slow, just a trickle which have not been nearly enough to keep up with his costs. “How can I grow my sales to something sustainable for my business?” he asked me. “How can I reach more people?” “Well,” I replied. “Who’s your customer?” “What do you mean?” he answered, confused by the question. “Are they men or women? Older or younger? Where do they live? What do they like to do? How much money do they make?” I asked, trying to explain. “And most importantly, how do they use your product?” “Hmmm…,” he thought for a moment. “Well, we know that most of our sales have been in the U.S.” That was it. That was all Stan knew about his customers. Needless to say, it’s no wonder Stan had been having such a hard time selling his gadget (which is actually pretty cool!). He really didn’t know who was buying it or why, which meant that he really couldn’t easily find other people who would be likely to buy it. Stan was shooting in the dark. My advice to Stan was to go and find out what he could about who his customers were, get to...
The Lone Wolf: Does My Startup Need a Co-Founder?

The Lone Wolf: Does My Startup Need a Co-Founder?

I was speaking with a budding young entrepreneur recently who I’ll call “Wolf,” and this was one of the many good questions he asked me about a venture he’d like to start: “I keep hearing that I need a co-founder, but there’s no one that I really want to work with. I haven’t met anyone I really trust with my idea. I either don’t trust them as people or I don’t think their work is going to be the right quality for what I want to do. Do I really need a co-founder?” As I told Wolf, the bottom-line answer is this: No, you don’t NEED a co-founder. And certainly there are plenty of successful entrepreneurs who have not had a co-founder, including Jeff Bezos of amazon.com, Susan Blakely of Spanx, and Pierre Omidyar of Ebay. Going back further, a couple of little startups called Wal-Mart and FEDEX were founded by the solo entrepreneurs Sam Walton and Fred Smith, respectively. But keep this in mind: Almost all investors have a strong preference for founder teams of two or more, and a belief that those teams have a higher likelihood for success. Why? 1. The Workload. Startups are hard work. Really hard work, and if your startup is growing like it should, it’s almost certainly going to be beyond the capacity of single person any day now. 2. The Skill Sets. Related to that, unless you’re Superman, Batman and Wonder Woman all rolled into one (with some Spider-Man thrown in for good measure), you do not have all the skills necessary to make your startup a success. Most successful startups...
The Agony of “What Am I Supposed to Wear to an Investor Pitch?!”

The Agony of “What Am I Supposed to Wear to an Investor Pitch?!”

I was having lunch with a woman recently who I’ll call “Dior.” Dior has been a senior executive in a number of large media corporations and is now starting her own company and thinking about outside funding. We’d been having a lively conversation on different startup and fundraising topics and were finishing up, when Dior put down her salad fork and looked-up. “I have one more question,” she said in deadly seriousness. “What am I supposed to wear?” And so it is with one of the most agonizing questions female founders ask me. “What am I supposed to wear to a pitch?” As Dior explained, the designer business suits she was used to wearing didn’t seem like a good choice when so many of the venture capitalists she was meeting seemed to be wearing jeans and sneakers. At the same time, she didn’t feel like she could walk into a meeting looking like a 22-year old college student. And let’s face it, a hoodie and sneakers usually doesn’t really have the same effect on a woman as it does on a guy. I’ll give you the same advice I gave Dior. There’s no one-size-fits-all answer to this question. A lot will depend on the investor you’re pitching to and the industry you’re in. What might be appropriate in a pitch for a fashion startup probably won’t fly in a meeting for enterprise software. A lot will also depend on what you feel good in. Your look should reflect your business and industry. Are your customers urban professionals, stay-at-home moms, competitive athletes? Think about who your market is, and tailor...