Startup advice from Venture Capitalists

The Startup Rojak, held at The HUB (Singapore) on Thursday 30th May, hosted a panel of three experienced Venture Capitalists (Frank Lee, Wayne Goh & Anand Govindaluri), for a question & answer session providing startup advice to wannabe Entrepreneurs and new startups. There were lots of insights, but a few really stood out.

Investors talking at Startup Rojak

Question: What advice would you give to an entrepreneur sending you a pitch?

Answers: From all the discussion on this point, the essence really boiled down to the following key points:

  1. Don’t send 60 page business plans, especially not by courier
  2. VC’s only get about 3 pages in, if they’re not excited, they won’t read the remaining 57 pages
  3. Presentation is important, it should be punchy & concise and convincing
  4. Know the VC & tailor your pitch to them. A generic (spam) pitch is obvious and will be ignored
  5. Don’t request for meetings without giving any information on who you are or what you’re doing, they’ll probably just say no
  6. Ensure that your project matches the interests of the VC you’re approaching, otherwise you’re wasting everyone’s time
  7. People are really important, VC’s invest in the team as much as they do the idea

Question: What do you think is important in a good startup team?

Answer (Anand):

  1. Diversity (not purely technical, or purely sales, etc.)
  2. An appetite for risk
  3. Teams that have a good dynamic & gel well together, preferably that have experience together
  4. A solid awareness of the macro landscape & the landscape of their industry
  5. Teams with good advisors

Question: What does scalability mean to you?

Answer (Anand):

  1. The team’s end goal defines the upper limit of where the business will scale to, it’s where they want the project to be in 5 years
  2. A realistic understanding & optimistic vision of how the business can be grown
  3. Services are fine, as long as they demonstrate clear competitive advantage or disruptive innovation (ie: reducing a service delivery processes from 13 steps to 6 steps, it’s still a service, but best of class and defensible knowledge)

Answer (Frank):

  1. Directly scalable production capabilities, preferably products
  2. Services might be good lifestyle businesses, but it’s rare that they are scalable

Answer (Wayne):

  1. We’re all about software, because it’s scalable.
  2. Ask how you’re going to penetrate certain markets, analyse your knowledge & plan of attack for them
  3. Software, software, software.

Questions: Is a previous “failed” startup a red flag for an investor?

Answer:

  1. Only if you think it’s a red flag, we see startup experience as beneficial, but you need to demonstrate an understanding of what went wrong – and what you’re doing differently.

3 Simple rules for writing emails to clients

There are a few simple principles that every good sales person knows well:

  1. Stay in touch with your customer
  2. Secure renewals BEFORE contracts expire
  3. Customer is king so be nice to your customer

Easy right? I thought so too. Which Is exactly why I found this email, from a big name supplier, so shocking.

Emailers to Avoid

The language is so tough it’s almost threatening – a reasonable explanation for why the IT team that received this was so antagonized. They didn’t say anything to the supplier, but they’re already shopping around for a vendor that actually values their business.

It’s not uncommon to see big companies treat little customers badly, or with very poor response times. You’re probably familiar with the experience; you don’t qualify as an “Enterprise” client, so you won’t easily get a real person to talk to you. It’s a fine line, and crossing it means lots of disgruntled customers.

As a small business these are great opportunities. Good customer service and non-threatening emails, are great ways of winning & retaining clients, even against bigger competitors. If I were their competition, I’d be chasing this email mistake with a campaign talking about flexibility & friendliness.

Perhaps the lessons from this email are the most obvious ones:

  1. Apply the 3 simple sales principles when writing emails to clients
  2. Don’t threaten your customers (even indirectly)
  3. Incent rather than penalize your customers for staying with you
  4. Only state the facts, don’t commit to something you don’t know
  5. Invest in your customer relationships, because if they don’t love you they’ll leave

A guide to writing great Contact Forms

Contact form statistics infographic

Click here for full view

I was preparing to write an article about great contact forms, but stopped dead in my tracks. Victor has created a brilliant infographic that provides plenty of statistical data and practical insight into what should and should not go into your contact form.

Please don’t take it as gospel. As with all such data, you need to perform your own A/B testing and see what actually works for you. Hopefully this will provide you a good starting point though.