More than anything else, I need to know these 2 things about your startup. What do you do, and what’s your traction?
This morning, I was looking through a ton of decks I just got from Mercury Raise. This is an awesome program that connects founders and investors.
Some of the decks are way better than others. So how do you, as a founder, stand out?
I need to know 2 things as soon as possible…
1) What Do You Do? It sounds simple. But it’s not.
You would not believe how many decks I look at where I cannot tell what the heck the company does.
“We help teams collaborate at warp speed.” Okay, that sounds peachy keen, but what do you actually do?
“We democratize access to tools creators need.” Okay, but what do you do?
37 slides in, I still don’t know. 😫
Here’s a better way…
“We get you a ride from Point A to Point B faster and cheaper than anyone else.” That’s Uber. Pretty great company, right?
“We find you a spare room in someone’s house that’s cheaper than a hotel.” That’s Airbnb. And already from that pitch, I’m thinking of becoming a customer…
Real talk: I looked at 20 decks this morning. If I don’t see something compelling in short order, I’m on to the next.
Please, please, please, tell me what you’re doing and make it clear.
I don’t know anything about your product or your market. You have to explain it to me like I’m 5.
2) What’s your traction?
Let’s say you get #1 right. I understand what you do and I’m interested.
But what reason do I have to think you’re succeeding?
That’s where traction comes in…
Here’s an example: “We’re at $250k ARR growing 20% MoM.”
Okay, that’s awesome traction! I’m already itching to meet you.
Let’s say you don’t have that yet. What else could traction look like?
“We launched this month and already we have 3 paying customers.” That’s awesome — I’d probably want to meet that company.
What if you don’t even have that?
“We have an MVP, two beta customers, and a team of 4 builders working day and night.”
That’s a pretty early stage company, but it sounds compelling, doesn’t it? I’d meet those guys.
Here’s what’s not compelling:
“We have an advisory board of industry experts.”
I don’t care about your advisors. They’re not going to build the company. The founders are.
“We won a competition at ABC Startup Pitch Night.”
Hey, that’s awesome and congrats. But in terms of investment, it doesn’t mean much. Better to leave it out.
“We have 10 LOI’s from enterprise customers.”
Jason Calacanis calls these “Letters of Nothing.” They generally don’t convert.
Stick to concrete signs of traction: revenue, customers, product, team.
Wrap-Up
It’s Friday, and I could’ve given you feel good stuff for a Friday. But today, I decided to just give it to you straight.
Happy talk won’t get you venture capital. But nailing your deck might.
Tell me right away: here’s exactly what we do, and here are signs it’s working.
Do that, and your chances of raising money just skyrocketed.
Let’s practice this in the comments. What does your startup do, and what’s your traction?
Who knows, maybe I’ll find a great deal in there! 🙂
Have a wonderful weekend, everybody!
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