SXSW notes: The Perfect Pitch

‘The Perfect Pitch – How To Attract Money For Your Digitally Convergent Business ‘

Pitching to investors of both the angel and VC vairety was the topic up for discussion at this session on Monday 13th March 2006, with a raft of investors, advisors and recipients of funding sharing their experiences and recommendations…

CHAIR:
Alex Cavalli – Chairman of the Digital Convergence Initiative
PANEL:
Ashwani Dahr – Venro / Iconixx (bridging early-stage to later-stage funding)
Josh Baer – Skylist
Harlan Beverley – Bigfoot Networks (fight lag in video games)
Sachi Gahan – VC, CentrePoint Ventures
Peter Huff – Blue Sage Capital (do more later-stage funding)

Q: What’s the single hardest thing in developing a pitch?

Harlan Beverly stressed knowing what you want – always go into a meeting with an ideal outcome and if you don’t sign the cheque today, have a thought prepared on what else would be nice.

Josh Baer said a lot of the best business plans that he’s seen have pulled together the market information and presented why their idea will make a success in this scenario.

Sachi Gahan listed (1) People (2) Technology (3) Market – different VCs will judge with different emphasis the order of importance of these. He was sceptical of Gartner and Forrester’s background information (which comes with a price-tag). So it’s great if you have these numbers but he was more interested in the bottom-up set-up and perspective as it shows the intelligence and analytic abilities of the entrepreneur.

What are your key strengths?

Beverly reckoned that the people aren’t so important but Gahan countered that the management team are important.

From Ash Dahr’s point of view, the people and management’s perspectives are paramount but the filter of the experienced entrepreneur has to be there, so it’s harder for the first time entrepreneur.

Angels have lower return expectations but VCs bring a discipline and rigour that makes a real difference.

Baer said the management team is the most common core requirement. Speaking as an angel he said it was very important for them. Also, they were most concerned with the customers – who are they, how are you going to get through to them, and do you understand them?

More than management and moneybags…

A delegate asked the question: as a technologist with a business plan but no management team, would any of the panel see him?

Beverly said that they see a lot of such plans. Dahr replied that as a technologist you need to know who you’re talking to regardless, then they quickly filter. So make sure you know who you’re talking to and how much money you need.

More than one person voiced frustration and disdain at funders’ attitudes, with several saying they’d been turned down once or more for funding but managed to bootstrap quite sufficiently and sometimes with great success.

Whither bootstrapping?

An angel investor in the audience quipped “it’s a bit like the bank, they love to give you money when you don’t need it.”

Others asked about the bootstrapping approach specifically, but they were steered to the session on ‘Bootstrapping Your Digitally Convergent Business’ directly afterwards at 5pm, where this would be the primary focus of discussion.

Filling in the blanks

Gahan added that they will always ask for a full reference list and do due diligence on the names you didn’t give and reference; so integrity is a deal breaker.

[This panel was part of the SXSW Interactive ‘Digital Convergence Initiative’ strand, which ran multiple panels and a few evening parties throughout the festival-cum-conference. The DCI is a project of the greater Austin-San Antonio Corridor Council – the Texas Technology Corridor]

See the motherlode complete list of SXSW Interactive 2006 panels.

SXSW notes: Running Your New Media Business

This session at SXSW Interactive on Sunday 12th March 2006 attracted a broad audience of start-ups, SMEs and freelancers with a variety of experiences, plus some bigger media players. 

The line-up of web entrepreneurs was equally varied, and while the discussion ranged over business models, recruitment and retention, working relationships and funding, the “people” thread dominated the discussion.

CHAIR:
Bryan Mason – Adaptive Path (user experience design, they sold MeasureMap to Google the week before he gave this talk)

PANEL:
Erika Hall – Mule Design (6 people)
Jennifer Robbins – Little Chair, also writes for O’Reilly on web design, blogs at Jenville and Cooking With Rock Stars (1 person company)
Jeff Robbins – Lullabot; also at O’Reilly 93/94, then started a web design company, then his band got signed and he played full-time for 6 years. Lullabot do mainly Drupal consulting.
Evan Williams – CEO & Founder, Odeo; formerly founder of Pyra Labs who sold Blogspot to Google, he also worked at O’Reilly in 1997. Ev added that he always started his own companies – the first couple (pre-Pyra Labs) “were terrible but good learning experiences”.

Growth, success and failure squared

Bryan posed a number of questions to kick off the discussion: How do you know it’s time to grow? What does success look like? Can you fail and what is the cost of failing?

Erika Hall said it’s a continuous process of making mistakes and getting over them fast.

Where does the money come from? Bootstrap or take someone else’s? How much should you take?

Evan Williams explained that VC money had enabled Odeo to grow a lot faster. However, it’s difficult to get a lot people at the table early on and it’s harder because it limits your manoeuvrability and makes getting everyone on the same page more cumbersome.

Odeo now (March 2006) has 12 people (but in October 2006 he bought Odeo back from the investors). However, growth means there’s an added communication tax on everything you do. In terms of funding, at the start they were just looking for an angel round.

Adaptive Path’s algorithm for hiring staff
(1) Billable (core team)
(2) Support admin
(3) Contractor vs staff

Start-ups – lifestyle careerists beware!

In terms of hiring, Odeo have used blog posting (that approach keyed into the Rails community); referrals (50%); and used 2 executive recruiters (2 of whom charge $75k per hire!).

Who do you hire? Contractors vs staff. Where do you find them? How do you pay them? How do you structure your company? A legal entity that’s structured for retention? Should you be traditional or inventive?

Erika replied that her company is more fun to work for than any other, and fosters the culture whereby staff have a real say in what goes on. Mule Design is also open to learning from people.

Evan observed that O’Reilly was / is basically a lifestyle company. It’s harder to do that with a start-up, he reckoned. If you’re a start-up there’s an assumed model that you go with and that drives you.

Transparent expectations

Jen Robbins said that she works with people that she knows and that she gets a along with. Adaptive Path’s Bryan Mason wondered is that structure and management where we want to put our energies?

Odeo aren’t a billable company as there’s no revenue and no revenue is predicted for a while, Evan explained. Erika stressed that because they are often working with contractors who are also friends – you have to be absolutely clear about expectations regarding what you want to get out of it, how they see it working and what they want to get out of it.

Jeff Robbins concurred – if you keep expectations really clear then the contractor will know when they’re screwing it up and you won’t even have to say anything about it.

Business essentials

With MeasureMap, Jeff recounted, they had unbelievable discipline and they paid around a 25% communications tax, but that worked because the people were in disparate places. They had a daily 10.30 conference call.

Evan noted that there’s a great blog on this called Founders Frustrations and he recommended trying Adminstaff for covering all your employee benefits.

How important is the written business plan for getting VC funding, someone asked. With time running out Evan said Pyra didn’t have anything like a plan and they were okay. Odeo had a PowerPoint presentation and just creating that was a good exercise for him to think the business plan through.

Jobs at NMK

My former employer NMK – based at the University of Westminster – has three roles available all at once.

They are currently seeking:

A Web Editor

A Community Manager

A Product & PR Manager

The closing date for submitting applications is 10th November 2006.

Social media seek interns

I see AOL Europe are looking for a social media intern right now.

And so are Stormhoek – check Hugh’s post.

Both have a hefty list of requirements. And both will be very lucky if they can get someone with *all* these qualities.

The jobs look intriguing and offer exciting opportunities to the chosen candidates, but the person who is able to work for nothing is also open to a lot more opportunities, hence my problem with internships.

The talented person who hasn’t got savings or moneyed parents – they can’t go down the intern avenue. So it’s discriminatory from the outset.

Or maybe I’m wrong and they’re paying them a salary, like proper apprentices…

Was that the week that was?

It’s been another period of blogging lite in this corner, but things have been picking up elsewhere…

You probably know about the launch of TechCrunchUK already. Sam has been busy busy busy riffing on the why’s and wherefores of interesting UK start-ups.

In turn, Mike Butcher has outed Pete Cashmore of Mashable as a Scotland, UK resident (and clearly a man with global ambitions) even if a few folks knew that already. And Robert Loch has been listing UK start-ups on his new Internet People blog. So the week has been quite revealing across the board.

Calendar overload?

Meanwhile, tech and digital events are piling up thick and fast. September 14th’s Beers & Innovation on RSS Frontiers is sold out and the waiting list is quite sizeable. For details of what else is on check the Jigsaw UK events page or the Techrunch UK one.

Indifferent to the little people 😉 the swish London digital advertising and marketing scene continues to pump out pricey conferences for its execs, grand fromages and high-flyers. What about Next Gen TV – only £1,345.50 for their two day conference. Go to their pre-conference workshop as well and the whole package is a snip at £1,795.50. Yes, and some people complained to me that at £376 (£258 concession) Content 2.0 was too expensive. Deary me.

Nurturing talent beyond the hype

But there’s more to building a business than swanning around posh hotels and getting funding. What about some training to get your people au fait with all that’s new and essential in digital design, business development, project management, accessibility, usability (yep, these skills are still needed in 2006 and beyond), open source marketing and online communities..?

Well you could do worse than check out the courses listed on NMK’s Events & Courses page. And given the current recruitment crisis, good to see Chinwag Jobs are running a new Online Recruitment course. Takes a lotta skills to pay the bills. Word.

Knowing me, knowing you

Scavenging the shelves of the Austin Airport newsagent looking for an alternative to the dreaded airport novel, I happened upon a magazine I hadn't seen in aeons – Fast Company!

Fast Company?!! Oh dear, is this Web 2.0 fever I've caught on the way back from SXSW Interactive? Nurse, the screens!

Back in the almost-heady days of 98/99 when I was Web Editor at Ernst & Young International, our Web Manager – the awesome Mr Paul O'Shea (a Cork man you see) – was an avid FC reader and I'd regularly browse his copy.

Anyway, it just so happened it was a great issue of FC I purchased – more than adequate brainfood for the return trip.

Right at the back was a great big 'ol feature on careers in the the networked age, entitled 'Creating a Gem of a Career' with the standfirst (as we old-school journos call it): 'Monster.com? History. Networks? Everywhere. Five trends that will shape your career in the coming decade'

You can read it here 

Big Brother right back at ya

The passage that really stood out for me was this:

"Your network may make companies transparent to you, but you're transparent to employers as well. Anything online, whether easily available or tucked away in a private network, is fair game. 'It's a big problem when someone's Facebook profile says that her favorite thing is to get s–tfaced on a Saturday night," says Masie.'Google is the first stop for finding info [on potential hires], then Facebook,' he says. So there may be a number of versions of "you" being projected into the world. Not all of them will necessarily be what you want an employer to see. Can you control that? If not, can you live with it?"

The networked generation goes mainstream

…but here's the bit that really twisted my melon – and offers hope for folk like myself who angst about "life-caching":

"Over time, hiring managers will be less interested in the salacious stuff that a Google search might reveal. 'So you were president of your frat," says Morris. 'As more information gets out there about everyone, it diffuses the importance of each individual piece of information. It will be okay.' "

A VE-RY interesting perspective, and think of the implications. As the MySpace / Facebook / Bebo generation enters the working world, it – the voluminous Buzznet/Flickr-stream, the years of carefree blogging and distributed blog posts, the tracked searches on Google – will (within reason) be immaterial… eventually. In the UK? Maybe in about 5 or 6 years I reckon (stick that in your predictionometer!)

Nonetheless, some issues remain. In terms of dealing with this new, two-way transparency of the distributed self, they cited the (free) service offered by ZoomInfo.

Return of the everywoman/man

Another thing I really rated about the writer's reasoning was the invocation to: "Embrace the Liberal Arts (Again)" ie. a broad-ranging understanding – and experience – of the world, of work and the different components of your business area is what gives individuals the edge in the modern economy.

As FC puts it:

"Many of today's exciting jobs (Java developer, brand-experience designer) didn't really exist 10 years ago. And the exciting professions of tomorrow have yet to be imagined. As a result, what we need from our education has changed. 'What you want to learn is how to learn,' says Taleo's Snell. And that's where the liberal-arts education becomes valuable again.' "

Agreed! Moreover, as I see it, anyone, even the most brilliant of experts, can enhance their standing – and their contribution to human knowledge and enterprise – by not soley operating in or being totally absorbed by the silo mentality.

In turn, this sort of synchs with New Yorker columnist James Surowiecki's analysis in his book The Wisdom Of Crowds (Surowiecki SXSW session coverage coming soon – I promise!).

And "lesser" specialists can learn whatever they want about their discipline or cross-company practices – and build-up new skills – from the internet and the blogs throwing open the doors on the "secrets" of professions in multitudes…

For all those already or aspiring to be working in innovative companies – and for Britain's economy in general – yet another wake-up call…

[PS. Turns out, while getting you the article link, I found out Fast Company also have a blog]