It has now been a year since Sparkling Logic joined the Plug And Play Tech Accelerator on a quest to change the way the world makes decisions. When you get a call about a potentially fraudulent charge on your credit card, we may be the engine behind the scenes suggesting foul play. As an enterprise B2B software company which makes awesome decision analytics tools, we focus on IT and risk professionals who can now catch fraud and provide loans and insurance policies better and faster.
Originally, we applied among 850 startups to join a few coveted spots in the inaugural launch of the Fintech cohort. Although I have gone through six technology startups (and one non-tech startup), Plug and Play was the inaugural journey on the Silicon Valley accelerator tour bus alongside some crazy talented (and others just … crazy) hooded individuals determined to change the world one bitcoin at a time.
Here are a few lessons I learned from the accelerator, which reminded me of my early music career:
1. Don’t sing loud until your song is perfect
... or don't just focus on funding. Most entrepreneurs are manically focused on getting funded. And rightfully so, as the paycheck helps soften the daily blows to your intellect, wallet and ego as the masses don’t quite get the brilliance of your revolutionary creation, which, if used, could save them thousands of dollars and bring endless joy.
But the funding is only an amplifier. It will not fix the poorly articulated vision. If the solution, go-to-market strategy, pricing, business model or the team are not well orchestrated, excessive funding will only make things worse. Putting cash behind the poorly structured idea is like playing a lousy, badly produced song with weird lyrics, really, really loud.
An accelerator gives a startup a chance to quickly test drive the story, pitch and the business model with many corporate prospects, investors, angels as well as other entrepreneurs. Startups should use that time to get their story – their company ‘song’ – ready to play loud.
2. Simplify your music
In Amadeus (awesome movie about Mozart), the Emperor advises young Mozart: "My dear, young man, don't take it too hard. Your work is ingenious. It's quality work… there are in fact only so many notes the ear can hear in the course of an evening..." This is an advice that every brilliant engineer entrepeneur should follow.
There is the old saying: “If you cannot explain it simply, you do not understand it well enough”. Most of us have heard pitches from overzealous engineers droning on through 30-slide decks, dangerously loaded with text and diagrams, trying to cram a five year PhD thesis into a ten minute pitch. Yet the ‘speeds and feeds’ of their brilliant solutions only brought their audience vivid visions of baby turtles rolling downhill in the Irish countryside.
Guess what? Most people deal in mental shorthand - they don’t care about details the majority of the time – (ok, some may at a later day, but in the initial presentations, you need to be able to explain to any ordinary mortal what you do and how that connects to something they can relate to). If after a dozen pitches, your audience still does not get what you do and why, try to put away the detailed how and simplify your high-level story. I did that over 140 times.
The accelerator gives you a fast turnaround opportunity to tweak your story daily until most of the people in the audience get what your company is all about and can hum your 'tune' on the way home.
3. Chose your instrument
Pick your battles. You probably believe that your big data analytics solution can change the world from Wall Street high-frequency traders to goat-herders in Mozambique. Yet, as a startup, you do not have a luxury of shooting your five arrows into a hundred targets. As a startup with limited resources, you should not try to play too many instruments at the same time. Instead, find one or two that you can master.
Tailor your solution, materials and demos to fit the low-hanging fruit, the particular application where your product or service fits best. You need to put the proverbial ‘wood behind the arrow’ and focus on the one use case that will make your company shine, enable your sales process to be repeatable and reduce the cost of customer acquisition and time to market.
Too many startups get overly excited about the grandeur of their solutions, making it so broad and diluting to the point that is no longer applicable to anyone. Even more dangerous is when the engineers go unchecked for too long, become code-happy, and make random, corner case features that a single customer may have asked for. Engineering and marketing feature creep dilutes the startup’s message, confuses customers, bloats the product, wastes time, energy and precious capital.
For a startup, the accelerator can provide the instant feedback from a few friendly prospects and corporate partners who can provide test cases and validate what actually matters and where the sweet spot should be. And when they do, listen. Their opinion is the only one that matters. So pick one or two instruments that sound good and that you can play well while saying no to others.
4. Know your audience
Just like you would not play Bach to a heavy metal concert audience, you should not pitch your detailed server messaging architecture to high-level accounting executives who are looking for easy-to-use graphical tools to visualize effective tax rates. In other words, you need to understand who is the person that you will target with your solutions, what they need, and how they will best comprehend what value you bring to them.
For example, saying that the market for your revolutionary marketing analytics solution is the Fintech industry is simply not good enough. Even focusing on mid-market banks does not go far enough. You need to define a specific persona, a functional job description of a target customer, such as Risk Manager in the IT department at a mid-market bank who focuses on building applications to manage credit card fraud and has background in SAP analytics tools.
Being able to get this specific means that you can get immersed into that person’s professional life, challenges, their ecosystem of tools, applications, problems and trends. Such focus will make it easier to articulate how your solution will solve their key pain points and make it easier to tailor your marketing, demos, and eventually features, to solve their problems and become indispensable.
Developing relationships with corporate partners in an accelerator may give you a venue to reach the right people in their organizations. Many times corporate innovators (CVCs) are the best brokers, connecting startups with the right audience in their organizations. Such access can give you an opportunity to interview that Risk Manager or Data Analyst that you are trying to target and collect that essential feedback which should become the technical and marketing compass for your startup.
5. Play and practice till you sound good
Clint Eastwood said: “What you put into life is what you get out of it.” This holds true for your journey as a musician as well as a startup in an accelerator. You need to show up and practice, try, fail and practice some more. If all you do is expect overnight success, deals, and funding you may be disappointed. The journey is yours and yours alone. The accelerator is an opportunity to quickly learn and course correct before you get too far. For young entrepreneurs, it is also a crash course on pitching, finance, marketing, public speaking and large corporate structure and the mindset – something that many have not experienced before.
The accelerators is an opportunity to learn – quickly. The entrepreneurs who benefit the most are the ones who are open to new ideas and are willing to participate. The best ones will use that feedback to rewrite their songs again and again until they have a hit on their hands.
In a nutshell
Throughout Sparkling Logic's time in the accelerator, we learned a lot, changed our story several times, modified our website and the message, altered pricing and our business model, introduced new pilot programs, and presented to over 80 companies, investors, tire-kickers, corporate tourists, and a few we have no idea what they did or why they were there. Although not always immediate nor obvious, every encounter was useful and formative. And the journey is not complete.
I am grateful for the opportunity to be a part of an accelerator where we met some amazingly talented and driven people who helped shape our company and my professional career. We are better off and will inevitably continue making some great music together.