The Shark Tank of Tech Startups
Only 10% of start-ups succeed. The startup world is glamorized by silicon valley, but many people don’t see the immense amount of hard work behind the scenes of making a successful startup.
I got a taste of this world, when I had an amazing opportunity to shadow some of the mentors in the blockchain stream at Toronto's Creative Destruction Lab! An accelerator for seed-stage science and tech startups. Their goal is to “build something massive”.
I got to sit in on meetings and listen to discussions in one of the smartest rooms I’ve been in full of VCs, startup founders, lawyers, developers and economists!
Here’s some of my 🔑 learnings.
Be objective-based
The way CDL is structured is objectives-based. The companies come to sessions around every 8 weeks. The mentors guide the companies to set their top 3 objectives to get done by the next session.
Many startups have a laundry list of things they wanna do. Often times they focus on the wrong areas at the wrong time. Navigating the space and understanding what you’re priorities are is key.
Identifying 3 concrete measurable objectives will help maximize the companies time and get you to the next level. It’ll also give you metrics to measure your progress.
Be coachable
You want to be coachable, most the companies have the technical background, their business plan can be modified. For example, in the health stream, a venture that developed sensors for detecting counterfeit perfume took a 180 turn when a mentor suggested that they transition their product, gearing it towards the oil and water industry where it would be more valuable.
The founder was versatile and open to iterating the plan multiple times. My conclusion, be an adaptable person that can figure stuff out. Someone that people want to work with. Seek feedback and brutal honesty, that’s how you can grow.
There were certain companies with clear pipelines to success, but lacked the work ethic, as a result, mentors were reluctant to be apart of their journey.
Gain market dominance and leverage network effects
Next figure out how you’re reaching the market where are the pitfalls in your approach how can you improve. How are you incentivizing users to onboard your service?
Some were diving into multiple markets, this isn’t ideal when starting out. You want to have market share over a niche area, after that then expand into other markets. If you build an initial market share in one area, network effects will play out in your favour.
If this is the goal, then the next question is “how do you minimize friction to gain initial traction?” Worry about lucrative monetization after you scale-out.
Be intentional and have business judgement.
You need to go in with an ask, time is extremely valuable during the 20-minute discussions, you gotta be intentional about what you want out of the conversation.
Make it clear how you’re planning on making money, who are you charging and how. Where are you planning on spending it? Who is your ideal client? These are basic questions that every startup founder should know inside out.
There's companies with crazy technologies but lack business judgement. A big factor being marketing, you should have a designated sales guy. In the blockchain space, there’s a lack of salespeople.
How you reach your audience often determines it’s growth trajectory. Have sales objectives. Do cold reach out’s, “you should be getting 10 no’s every day.” that's how you know your hustling.
Have a visionary element around the company
There should be a story that people can rally and build a community behind.
Make it emotional. Both for the consumers and the employees.
No one is gonna want to invest in a company when the founders don’t even believe in it. So show confidence in the project.
This isn’t just about what you say, but how you say it. The way you act and what you say represents your company. Give off the energy you want to receive.
Companies who didn’t communicate effectively or lacked enthusiasm during their presentation didn’t excite the room, despite having solid ideas.
Begone buzz words
Tech VC’s have dealt with their fair share of “blockchain, ai, quantum” companies who turn out not to be blockchain, ai, quantum companies. Many only throw in buzz words to sound legit. The bottom line, don’t use blockchain if you’re not a blockchain company. One actual blockchain company at CDL company caught onto this trend, rebranding to a name without blockchain, when they announced the change, the room filled cheers.
Although companies with Ai in their name often get more initial “hype investment”, the type of people you want investing in your company will see-through it.
Seek feedback from a multitude of people
“People in the crypto community self validate, you don’t need that here.”
It can be easy to be deceived by only getting feedback from people in your space, but the market isn’t limited to just your community.
Often times the community will support you because you’re apart of their tribe, get outside opinions from a multitude of people, some that are indifferent and some against.
Those conversations can help you identify your blind spot barriers.
You don’t need confirmation bias towards your own company, because the consumers won’t have it.
If you ask a room full of pizza lovers if they like pepperoni pizza, you’ll get positive responses, but that doesn’t mean you’ll get the same response if you walk into a room of pasta lovers.
“What makes you special?”
In a world full of crypto exchanges and ai companies, this question is key. In any crowded space, how do you differentiate your self from others? Why would a user choose you over a competitor, you want to build something not 10% better, but 10x better. This will help you beat out competition and gain a monopoly.
Key takeaways
- Build a visionary element behind your company
- Have laser focus, be objective-based
- Seek feedback from people outside your industry
- Avoid unnecessary buzzwords
- Dominate a niche area, then expand by leveraging network effects
- Be coachable, be open to iterating and adapting
I want to thank the CDL staff and organizer for the amazing opportunity to dip my toes into the world of tech venture capital! Special thanks to my mentor Amy Ter Haar, she was a huge part of making my CDL experience memorable! Looking forward to future sessions!🙏❤️
