Hey OrderAhead - here's an idea

If you’ve spent some time in the Bay Area recently, you’ve probably noticed the plethora of “OrderAhead” cards, stickers and general branding that exists around cash registers. It’s impressive how many coffee shops sport their brand, right below Yelp’s sticker. (Their head of Merchant Growth, Danny, is clearly killing it). 

Part of me wonders how strong their engagement metrics are. I’ve been working out of coffee shops for a few months now, and not once have I seen someone come in and mention order ahead or pick up their order from Order Ahead. I’m clearly not the target demographic, however, so I’m a bad litmus test for how compelling the platform is. I do use seamless, so whatever value they add is going to have to be significant in order for me to accept the burden of switching. 

That having been said, however, they've raised a big round from savvy investors, adn their metrics seem to be impressive according to this TechCrunch article - so I may be off on this one. 

Idea

A pain point I DO have, however, is locking in spots at coffee shops for meetings. (I also have a similar pain point for locking in spots at bar counters for dates). In both cases, I find myself having to go to the location a good half hour early to just stand around and lock in whatever opens up. It sucks. That’s not a minute of my life that’s lost…that’s hours every week. 

I want a platform that lets me pay a little extra (say $5-$10), to lock in space for 2-3 people ahead of time. I’d pay for this TOMORROW, as it would save me a great deal of time, and save me a lot of stress before my meetings and dates. 

Small target demographic, I know, but I'd pay through the nose for this service, daily. They coudl also mark some spaces "order ahead" spaces with stickers, which would result in additional branding within the coffee shops and bars. People would wonder what that meant, and would download the app to figure it out. 

A bit of a hairbrained idea, but I'd use it!

Why Google Glass Will Fail

Google Glass Will Fail.

Note: A lot of the ideas here came from a conversation I had with Greg Schlomoff. We were talking about the impact Google has had on the world versus Facebook, which lead to a conversation about Google Glass.

Call me short sighted, but I really don’t think there’s much of a future for Google Glass or the new Pulse by Withings.

Why you ask? Well, that’s easy:

Google Glass forces me to adopt a new device, instead of replacing an old one.

I don’t wear glasses. I don’t carry a small 8 gram rectangular device to clip onto my belt. I carry a phone, I sometimes wear a watch, and I wear a belt. I don’t wear any bracelets, I don’t wear glasses.

If you want me to start carrying a new device, you have to offer me an incredible value proposition, that none of my current devices offer. In the case of Google glass, it does may of the same things my cell phone does, but it doesn’t REPLACE my cell phone.

If it made glasses better (for those who wore them), then it would have a significant value proposition for that demographic. Problem is…people who wear glasses can’t wear Google Glass. The one demographic they could have gotten traction with, they cut out of their beta.

It’s not a micro improvement on something we already use, it’s a completely new device.

The iPhone worked because it created an incremental improvement around the user experience of telephones. Smart Phones already existed, people were already using portable devices as joint telephones and computing devices. (Ah, the ol’ Palm Pilot. I miss it at times). What Apple did is it created a device that enabled you to interact with it in a differentiated manner (the swipe touchscreen), with a powerful user experience around their apps, their unique operating system.

It even cannibalized a very important part of its business: The iPod. It effectively integrated the iPod into a the phone, and made it so we had to carry one less device in our lives.

The iPhone made what I already had in my pocket, so much better.

If Glass, or Pulse, or any of these wearable device companies truly wanted to get early adoption, they’d focus on creating devices that replace any items I currently have. Why not create a watch or a belt or belt buckle?

I don’t buy the efficiency argument.

The argument is that it will make it so I don’t have to pull out my phone every time I want to do something. Fair enough. Is that a really big pain point though? Do I complain every time I have to pull out my phone to take a picture? No - I don’t. There have been maybe two occasions in my entire life where I missed a cool picture because I couldn’t whip my phone out fast enough. That opportunity cost doesn’t justify adding the burden of glasses to my face permanently.

The feedback I keep hearing from people is that the user experience is awkward. The tilt your head back + voice command platform is disruptive, and somewhat antisocial. If efficiency was one of the maind rivers of adoption, they should have focused more intently on the user experience of Glass. Bad UX doesn’t translate to a more efficient platform, no matter how manys teps were cut.

Additionally, The cost of adding something to my face significantly outweighs the benefits of efficiency.

It’s a physical barrier between the wearer and the world

I feel this every time i talk to someone who has Google Glasses on. IT’s hard to explain, but I feel like there’s a barrier between us - I wonder if they’re going to interact with Glass at some point and do something in the middle of our conversation. It feels like they have their phone out, and they’re about to make a call, but are trying to talk to me at the same time - I’m not sure whether our conversation should be brief, or if I should be trying to meaningfully engage with the person.

Some people also seem to feel threatened by Google Glass. They wonder if they’re being recorded, and they feel like the tool could be used against them in some way.

---

As Greg put it, Google Glass is the equivalent of flying cars, We’ve had flying cars for some time now, but they haven’t been adopted. It’s one of those things that sounds cool to us nerds, but is wholly unpractical.

Now, you could argue that some of the arguments made above will simply go away as we get accustomed to interacting with Glass (both as wear-ers and outsiders). I don’t think that’s right. I think the culmination of all of these negatives significantly outweighs the benefits Glass adds to our lives, and that they will keep Glass from being adopted.

Google Glass will add a significant burden to my life, and it’s unclear what the advantages are. I’m going to look weird. I don’t wear glasses. It’s not replacing anything, it’s going to be IN ADDITION to what I have. With google glass I’m going to have two ways to take pictures, two ways to see if I have any new messages, two ways to do X. It may do some things better than my phone, but it isn’t replacing my phone.

If it replaced my watch, however, that would be a different story. IT’s easy to add a lot of value veyond telling time, and I think I’m ready for a new watch anyways.

Your First Pitch Deck

If you're fundraising for the first time, here's a brain dump of what I learned raising our round for Meeteor, and working with two different VC funds in evaluating deals. (Albeit briefly). This is a brief guide of what we learned investors generally want (based on what they asked us), and a template that you may find helpful. 

How Investors See The World: 

Investors want to de risk their investment. They want to make sure that the problem is huge, that you're the perfect team, that your solution is the right solution for the problem, and that you're going to be responsible with their money. It's simple: from their lens, all they see is risk, and it's your job to make them feel like you're the least risky investment possible. 

Pitch Deck Checklist:

Market Opportunity.

- Define the Pain Point 

- Estimate how many people feel the pain point, and how big the market is 

- Evaluate the competitive landscape 

Your Product/Service

- Define why your product solves the pain point

- Product / Service Demo if you can

- Small roadmap around where you're headed

Team

- Who is working on the product

- Define who does what, how you divide responsibility

- Why is your team uniquely suited to tackle this problem

Deep Dive:

1) What the world looks like today (Market Opportunity / Pain Point)

Risk 1: The pain point isn't a hair on fire problem. Sure, the world kinda sucks without your solution, but it kinda works just fine. 

Risk 2: A tiny percentage of the population feels it. So you found that iguana owners have a really hard time cleaning their cages, because iguanas smell really bad, so you came up with a air filter for iguana cages.  There aren't enough iguana owners who feel this pain point to justify a VC investment. 

How to De-Risk:

All investors generally wanted to know what the pain point we were solving was, and whether that was a pain point that many people faced. The idea here is that the more painful the problem you're solving is, and the more universally it's felt, the more monetizeable your service is.  

They then wanted to know who our competitors were, and how well they were doing at solving that pain point. In our case, we believed LinkedIn had done a great job of getting users, but hadn't truly addressed the pain point of networking and professional introductions. (The way people networked offline wasn't truly recreated online). 

We were careful not to overstate our numbers. We just wanted to pain a picture in our investors heads that every professional person, at some point, needs to network, and that they're having a hard time doing it online. Despite this difficulty, services were already making money - meaning that if we did it better, we should be able to monetize our service as well. Don't get too ambitious here, as overstating your numbers can be significantly worse than admitting you're not sure. 

3) How you solve it? Is your product better?

Risk: You identified the right pain point, but you're unable to come up with the right product solution. 

How to De-Risk:

Traction. If you've launched a product, and it has solid growth and/or engagement numbers behind it, then that's strong signal that the world wants what you've built.  

Short of traction, you have to prove that you're going to be able to come up with the right solution through a good process. How many users have you talked to this week? How many of the people you show your wireframes to in coffee shops, give you their number and ask you to call when you launch? Get your potential investors excited about the signal you're getting, and prove to them that you're not scared to go to your customers early, and test your ideas and products. Having a solid iteration cycle in place, where you're perpetually building product, testing assumptions, and adapting, makes for  a really compelling case, even if you don't have product to market fit yet. 

4) Why your team?

Risk 1: The team falls apart after they invest. 

Risk 2: The team doesn't have the skills needed to execute the vision

So you've found a large, universally felt pain point, and your solution is plausible. Is your team the right team to execute against that vision? Chances are, you might be one of 10 teams pursuing the same market opportunity in this fundraising environment. As Gady Nemirovsky from Inspiration Ventures put it when I met with him: "You're the 10th person to pitch me this idea in 2 months, why should I invest in you?" 

How to De-Risk:

For the first one, the longer a team has worked together, the better. This helps ensure that they know how to work together, that they've been through a few storms, and that they know what they're getting into. I've adopted Matt Shobe's founder filter by asking founders two questions:  Do they laugh at each other's jokes, and how they divide responsibility. It's key that founders know how to work together, and that they have clear demarcation in product responsibilities, or else they'll spend a lot of time arguing over petty things. 

Secondly, it's important you tie the skills of the founders to the problem you're solving. Are you building this badass natural language search XYZ? Make sure that when you're talking about the team, you're demonstrating a core competency in the solution you're pitching. 

5) Bonus: What are you doing with the money

Risk: You spend it on things that don't make you swim faster upstream. 

I don't see this one often, but I really liked including it in our pitch decks. It gave investors a clear idea of what we wanted to do with our money, and what our roadmap looked like. It's usually a giant red flag when I see companies budgeting inordinate amounts of money on marketing or patents. 

Our Deck:

1) What do we do?

2) Team

3) What the world looks like today (Competitor Overview)

4) Pain Point (Why it's not enough)

5) The Story, why we're better. 

6) Product Demo

7) Market Opportunity (How big the market is)

8) How We're Going to Acquire Users

9) How we're going to make money

10) How we're going to use your money. 

You can view the whole deck on slideshare or down at the bottom of this post. 

Hope this helps, and if you ever need someone to soundboard your deck, happy to help! Feel free to ping me at philip dot cortes at gmail or via twitter @philipcortes. 

Goodluck!

Meeteor pitch deck v7.3 from philco11

Closing Your Round =! Product to Market Fit

We closed on a 500k seed round in September 2011 for our startup, Meeteor. We closed our round in 3 months, with Tom leading the round, Contour Venture Partners out of NYC doing their first seed round, and a small handful of smaller angel investors in the Bay Area participating. To say that we felt validated is somewhat of an understatement.  This is a pretty good approximation of what went through my head, mostly subconsciously: 

We must be doing something right!  Look at who is giving us money! Look at how much they're giving us!  They agree with everything we said! We must be on the right track!

Right?  Right…?

Wrong. 

I think I subconciously confused closing our round with product-to-market-fit. It wasn't a conscious decision, it was simply a byproduct of the signal we were getting during the latter stages of our fundraising: we had optimized our pitch and deck enough that most meetings were going well. Investors liked our product, they liked our team, they liked our market, and they liked our original take on it all. It's hard not to let that make you feel validated in some way. 

You're not validated. Only your product and its numbers tell you whether you've found product to market fit. Are people actually using what you want? If not, how do you get to a place as quickly as possible where people are not only using it, but telling everyone they know about what you've built. Money is a tool, not the finish line.  

Your investors bet that you'll GET there, not that you ARE there. 

Don't make the same mistake I did. It's easy to when you get to the finish line of seed fundraising. 

Get to work :-)

Fundraising Makes You Fat

Things aren't working: your numbers are pretty far from the "hockey stick" trajectory you need to get to Series A. Your investors are frustrated, and so are you. Why doesn't the world love what you produced? How could the world not be as genuinely excited and passionate about your solution to their problem(s)?

Your investors are sending you the occasional "hey, what's up? What's going on? Any updates" emails, and you're not sure how to answer. You're incredibly conscious of the fact that every day represents money spent, with no revenues coming in the door. You realize that they want a plan, they want to know how you're going to fix what isn't working, and you don't have one. 

Internally, conversations are getting tougher and more heated between the founders. Your employees can feel the tension rising, and it's making for a more toxic work environment for everyone involved. The stress makes conversations mired with a certain degree of contempt - everyone thinks their opinion is right, when in reality nobody has answers. Days turn into a week, and you feel like you have all these engineers, and designers, and marketers, and that unless they're coding/designing/marketing, you're wasting money. The pressure to build and launch something grows even more. 

The pressure keeps building, and ultimately the desire to "move forward" takes over, and you start building things again. (For better or worse). 

I've been there. It's not an incredibly happy place. It kinda sucks actually. But I learned a few things, and hopefully they can help you navigate through it all:

Don't Over-plan. 

Planning is natural: it's our way of mitigating risk and calming our anxiety about the future. The future is easier to step into voluntarily if we know exactly how things are going to go, and what we're going to do. It also helps keep investors off your back, because it shows that you've thought through X number of contingencies, and know what you're doing. (Even though you have no idea what your'e doing, and that's ok). 

The problem with planning is that the future never goes as you'd expect it to, which means that all that "planning" you did was pretty much wasted. (I learned this the hard way). Instead of planning, come up with a process and goals you want to achieve. Do you need 1M users to raise Series A? Do you need to hit 5% conversion to paid? Focus on that goal, and focus all your energy on achieving it. Don't plan what you're going to do month by month, just focus week to week on ways you're going to hit that number. 

Don't Over-build. 

The second thing I see time and again is startups making larger,  more audacious, and technically more challenging changes over time. We don't ever want to feel like we're throwing money down the drain, so that drives us to building incredibly time consuming, technically complex things. We can't be wasting money, because look…our latest version of our service took 4 months to build, with some of the best Python developers in the country!  It has machine learning, natural language processing, and that's only 1/10th of the new amazingness we're putting into this new version! It's bona fide badass! It has to be, we're really smart, and we spent so much time on it! 

The problem is that time and effort aren't direct corollaries to your startup taking off. In fact, the opposite is often true. Instead of spending 4 months working on the new version of your service, you could have spent two weeks making sure you were building the right thing, and breaking your build don into smaller segments. Don't build a 2.0 of your service, build a 1.1.1 of it, then a 1.1.2, etc, while keeping all your energies focused on your key goal and metric. 

Ship often, Cut back on discussions. 

The pressure to build is a good one. You don't want to get lost "theorizing" about how to fix things, and debating internally on what are good ideas, versus great ideas. The truth of the matter is, nobody in the room really knows the answer, you just have to test things as quickly as possible, and get feedback from real users. That initial gut feeling you had to keep the ship moving, and getting your team back into action is a good one at it's core: building things means putting product in front of users, which means you learn.(It also helps cut down on the endless hours of no-data-dead-end-rabbit-hole conversations internally on what is "best"). 

Conclusion:

A lot of the pressures to overplan and overbuild come from having raised money. You are now paying a team of people (mostly engineers hopefully) to work towards a goal. They were hired with a very specific skill, and when you don't have a set (ambitious) plan, it feels like you're not using your resources properly. That, and the fact that your investors are clamoring to hear what your "plan" is, and how you're going to fix things, makes the pressure to overbuild and overplan the safest option. IT's the perfect way to subconciously absolve yourself of responsibility: "I used the money and resources I was given to their fullest extent. We built incredibly complex things, which justifies the money we spent". In reality, the only thing that justifies the money you're spending is finding product to market fit, and the "plan" should be a "process". 

I realize this is pretty much everything Eric Ries outlines in his book, Lean Startup, but I had to learn it all the hard way, through 39 months of failure. Hopefully this helps make the process, and learnings real for you, so you can avoid the mistakes I made for so long.