The importance of feedback can at times be worth more to an entrepreneur than actual funding. Getting advice, mentoring and in-the-flesh experience from presenting your business to an audience made up of founders, developers, and investors is vital feedback for any entrepreneur. This is – partly – what Seedcamp Week is about.
Anirvan from InsightSplash has written about his experience at Seedcamp Week London in September 2013. Anirvan shares some very valuable ‘do’s and don’ts’ about his team’s experience – all very valuable to teams contemplating applying for Seedcamp Week London 2014.
In early 2013, we decided to set about building the Google Analytics of hotel operations auditing and quality management. At the heart of our vision was the conviction that if you can reengineer the feedback loop to make it frictionless, the volume & quality of guest feedback you can generate can approach clickstream data (used in A/B testing) in its depth, breadth and potency.
To test that belief, in July this year, my co-founder and I flew to Johannesburg to launch our first pilot with the Crowne Plaza. Until this point, entrepreneurial bravado aside, we had a fundamental fear: what if low friction did not drive exponentially higher response throughput? What if we were fundamentally, foolishly wrong?10 days into the pilot and we knew that we were not wrong. We were generating response rates of 70% per week and outperforming the incumbent feedback system by 1000% – this with a first cut, unoptimised, unincentivised version of our feedback tool. Armed with this data, we applied to Seedcamp and in a week we had our answer. We had made it to the final!
We did not win though, so the rest of this blog is a reflection on our failed attempt. Read in that light.
(Note: It is written for the benefit of other, future applicants who presumably would want as much detail as possible (we did). If you are looking for a quick read, this may not be for you.)
To prepare for the event, we did three things. One, we created a business case (spreadsheet numbers), two, we created the pitch deck and three, we created a longer, leave-behind deck. We also looked at a number of great instructional videos on the art of pitching.
If we had to do it again…
With the benefit of hindsight (& purely keeping Seedcamp week in mind), we could have spared ourselves a lot of this work:
- The business case proved redundant. We were never under the illusion that the business case numbers per se would have credibility but we expected some of the underlying revenue and cost drivers to come in handy during the Q&A. This proved not to be the case and on balance, the return on effort was not high enough to justify it.
- The longer leave-behind pitch deck remained un-utilised. If you are going to have two versions of your pitch, they need to be in harmony. However once you are in Seedcamp week, the presentation version of the pitch deck will change so rapidly, it is virtually impossible – certainly for a 2 man team – to also update the leave-behind version in sync. To avoid inconsistent messaging, we just had to hold back the leave-behind version. Had we known, that is further bandwidth we could have utilised differently.
What we didn’t do but should have done: spent far more time preparing for the Q&A.
Before Seedcamp, the Q&A ‘threat’ we had in mind was the Curveball – i.e. a fundamental weakness we had failed to spot and had no real answer to. We were both fearful and hopeful about landing a curveball – fearful because we didn’t want to look stupid but hopeful that if a curveball did land, the insight would be well worth any embarrassment and dramatically improve our odds of success.
It turned out, this was the wrong mental frame. No curveballs manifested but there were plenty of bread and butter questions about entry barriers, scalability, team vs. problem fit, etc. that we did not do full justice to.
In theory these should have been simple and some of them were. But when you breathe a startup 24/7, you accumulate a body of arguments and counter arguments and counter counter arguments as to the pros and cons of your startup. To distill that into concise, compressed logic under pressure can be hard if you haven’t pre-framed your answers. The problem is not that you don’t have an answer but rather that you often have more than one – selecting the right one can be hard.
A better mental frame would have been to treat the Q&A as a behavioural competency interview. If you have been through one, you will know that the trick to preparing for these is to mine your CV in advance to pick up one example for each anticipated question. We should have done this and we didn’t.
The Art Of The Pitch
During the Seedcamp week, we pitched 5 times in total, each pitch lasting 3 minutes. Here is what we discovered along the way
1. Do Tell A Story But Choose The Right Story To Tell: InsightSplash is a 2-sided concept; we make it easier for hotel guests to provide feedback and we then mine that feedback for insight. Our pitch told the story of how we take away the pain for those guests. Went down like a lead balloon. We were told that we were harping on the obvious. In the next iteration, we took away the story element altogether and that landed even flatter – people told us without a story, it was hard to stay interested in our pitch. We got it right on the third iteration when we figured that we had to tell a story but from the POV of the hotel (who would pay us) not the customer.
The lesson here is that you should tell a story from the perspective of the entity to whom you add the most value. In our case, no hotel guest complains that she can’t give as much feedback as she would like whereas hotels would love to receive far more feedback than they can generate. So even though our customer engagement metrics are pretty incredible, it makes sense to tell the story from the hotel’s perspective, not the hotel guest’s. It is kind of obvious in hindsight but it really wasn’t at the time.
2. It is not the investor’s job to place herself in your shoes: 70% response rate is unheard of. Generating tens of thousands of data points per hotel is unheard of. We were convinced that those metrics alone would lead to an Aha! moment. They didn’t. They were relevant of course but they proved nowhere as conclusive as we expected them to be. With hindsight, this was almost certainly because we were drawing on context that the investors lacked. There was also an element of egotism on our side – these metrics were the crown jewels of our journey so far. How could they not be the centrepiece of our pitch? How could they not resonate with other people?
The lesson I would draw is do not assume that proof points that resonate with you will automatically resonate with investors. Try out your proof points in advance before you work them into your pitch.
3. Practice Your Pitch 50 times Like They Tell You To? Yes. And then some. And then some more.
The Mentoring Sessions
We found these incredibly valuable and scarcely believable that we should have got this for free (thank you, Seedcamp). Things we learned:
1. Control your sales instinct By default you will want to convince people how wonderful you are and that is OK up to a point, especially if you are talking to a mentor with relevant experience who could be a source of sales leads. Just make sure you ask enough questions to learn from these sessions, not just sell.
2. But do be alert to sales opportunities Seedcamp generated 5 high quality sales leads that converted into ongoing sales conversations for us. More actually if you count sales leads that proved to be dead ends (for now). When I say high quality, I absolutely mean high quality; the kind of leads that on our own would have taken us months to crack. Especially if you are a B2B startup, you have to know that Seedcamp can do this for you and seek out the mentors with the right industry background so you can drive this pro-actively.
3. There is negative feedback and there is negative feedback There are two kinds. There is negative feedback that picks up on issues you are already aware of and are actively working on. And there is negative feedback that is based on issues you were not aware of. You need to be open to both but handle them differently.
For the first, watch out for nuances that are incremental to your understanding of the problem space but be aware that the bulk of the criticism may be based on an inadequate understanding of the journey you have been travelling on. E.g. if a mentor says X is incredibly hard to achieve, it is pause-worthy if you thought it was only moderately hard or easy. But if you were fully aware that it is incredibly hard and were actively innovating to deal with the hardness of X then that hardness is a positive, not a negative and you should not let a mentor convince you otherwise.
As for the second, when you find a mentor who after barely – say 15 minutes – of reflection about your start up can identify something unique that you have failed to spot, well grab that mentor and never let her go. Seriously, mentors and mentoring moments like these are what made Seedcamp so special for us.
The Evening Parties
With the exception of Monday and Tuesday, there were after-session parties on all the other days. Keeping in mind that attending these parties has an opportunity cost when you are sleepless and running on fumes, this is what we realised.
1. Evening Party On Founder’s Day Very high signal to noise ratio. Attend and attend till late. Every third person you meet will be a founder that you can learn from so utterly worth the return on effort.
2. Evening Party On Product Day Poor Signal To Noise Ratio. The event had a mixed attendance with many people who were neither founders nor investors and it is too much work to figure out who is who. If you are sleep deprived, this would be an easy event to miss. I walked out after 30 minutes.
3. Evening Party On Investor’s Day Final event in the Seedcamp week so absolutely worth attending. Lots of investors around plus first real chance in the week to let down your hair and fraternise with your co-applicants
Fantastic experience that we absolutely loved. It is a bummer that we didn’t win but then again we got so much out of the week itself that it is hard to look back at the week as anything but time well spent. If you are a startup considering whether to apply, don’t hesitate. Just do it.