It seemed like a slam dunk. During last year's South by Southwest, I pitched Geostellar, a solar energy marketplace, in the Dolphin Tank, a panel of hand-picked investors to be a more encouraging version of ABC's Shark Tank.
Before the event, I called the organizer for some quick coaching. She knew my track record as a founder, which includes starting a loan-trading platform backed by GE Capital and Citigroup as well as a video game technology company funded by Cisco, Intel and major Silicon Valley venture capital funds. She told me I had done this so many times that I should just relax and not worry about it. I left our conversation thinking I could give this pitch in my sleep.
So I did. I phoned it in.
I climbed the stage, looked into the eyes of the panelists and proceeded to ramble. I babbled about our consumer brand, random technical facts about solar energy simulations, ray-tracing in video games, remote sensing, affiliate and referral programs, economics of the industry supply chain -- whatever came to mind for a seemingly endless amount of time.
When the buzzer finally sounded, the Dolphins ripped me to shreds. The panelists didn't understand anything I had just said. They didn't know what my company did, how it would make money or how it would give the investors a return. It was clear I’d just tanked.
Humiliation brings a heightened sense of reality. As traumatic as it might be, replaying each moment of my Dolphin Tank experience makes clear three lessons that I’ve gone on to apply over the past year, making me a stronger entrepreneur.
1. Ground yourself in three key points as the foundation for your story. When pitching your startup at an event, in a conference room of VCs, on the phone or face-to-face with a potential investor, ground yourself in exactly three messages. This works just as well in sales presentations, board meetings or all-hands events. Three is the magic number for a reason. It provides markers for the journey so you don’t get lost and allows your audience to follow along. After the meeting, audience members will be able to retrace the steps, recall the key points and pass them along.
These days, I jot down the three salient points before every meeting of any size, whether it’s with employees, investors or customers.
2. Distinguish yourself from the field by establishing a comparative frame. In a pitch event, the competition needs to be put in a single box and your company needs to appear distinctly separate. At the Dolphin Tank, our competition was a variety of startups in fitness, cybersecurity, ecommerce, publishing and mobile apps. We were the only one that had a “triple bottom line” mission, which adds “people and planet” to the traditional “profit” motive.
We failed to take advantage of an opportunity to frame the other startups in the competition as inconsequential, and our company, in contrast, as one with a significant mission.
Today, rather than claiming to be better than competitors, I develop a narrative that places us in our own category. Before meetings with potential customers, I determine which competitive frame will give us the greatest advantage and then adjust that as necessary until we’re the only possible choice.
3. Don’t let a good fail go to waste. Once off the stage, when the epic proportions of the fail began to sink in, I approached the Dolphin Tank videographer and copied the video file to a flash drive. Three months later, I pitched at Capital Connection, a venture capital event in Washington, DC. This time I was thoroughly prepared and nailed it. I commandeered a copy of that video as well. By editing together the highlights of the two events, and mixing in reality-TV style interview footage, we presented Geostellar on our YouTube channel as a company that learns and adapts.
This lesson can be applied to venture capital investment pitches and customer presentations as well. We are often surprised during meetings by information provided and fail to respond effectively. A well-crafted follow up that incorporates considered responses will be more effective than any reaction delivered in the moment. Take the time to assemble materials that address the core concerns expressed in the meeting, show that you take them seriously and address them thoroughly.
I will not be returning to SXSW this year, and I’ll be sitting out of the venture capital pitch events in the spring. My focus now is cultivating meaningful connections off-stage and out of the limelight with individual investors I meet through an equity crowdfunding campaign.
As a humbler, more grounded entrepreneur, I appreciate each small success and work to avoid the intense humiliation I suffered a year ago at SXSW, which could always be one presentation away.