Founders… Don’t get Caught with Catch Words!
Founder: ….then we will provide data analytics to the hotel owners providing an overview of what are the common complaints
Me: Who on your team has experience in data analytics?
Founder: I have management consulting experience
Me: (confused) Do you know how datasets are made & how analytics on them are done? Or has someone on your team done this by themselves before?
Founder: aa..aaa..a.. No
Me: (rolling my eyes)… ok continue
Artificial Intelligence, iOT, Data Analytics, Data Mining, Blockchain and a host of “catch” words have been making their way into the presentations of startup decks reviewed every day by investors like myself. In many cases these words are embedded into the deck so that an investor will atleast open the deck and read through it. This is in my opinion one the worst ways to start off a relationship with an investor.
I will delve deeper into presentation starting with the relevant experience that the team has to execute the programming and implementation of the “catch word technology” that was placed carefully by you into the presentation. On most occasions I find that there is no one on the founding team or the key team that has any experience in the area that the presentation boasts will turn the world on its head.
Now with my initial trust with the founder shattered to bits I start discounting everything the founder says about themselves or their product/service by 80-90% and make my own model of the prospects of success for a business where the founder has limited experience. How many decks do you think make it through an investigation like that?
I cannot stress the importance of keeping your presentation clear of these catch words if:
- The business model did not need it
- You don’t know how or why it is important to your business plan
There could be a scenario in which you know the business side of an iOT venture but you do not have the experience to develop that technology. In that case, I recommend that you get someone on your team that has hands-on knowledge of the technology, have them validate that that tech can be built to the specifications of your business model and will work as asked and most importantly will be willing to build it. Then make sure that this person is on the call so that I ask them questions about how the tech will be implemented, get insightful & intelligent answers that I can validate with the professionals in my network that have experience in your space. I will not only respect you for having the foresight to bring such a person on board but I will also give your words more importance because you will back-up what you will say.
Do not be like the founder who until that moment had a decent idea worth exploring but his response to my question made him chop of his own feet.