"Video Lecture _ Lecture 19 Sales and Marketing; How to Talk to Investors”
This blog post is about the principal aspects of the 19th
lecture "Sales and Marketing; How to Talk to Investors " by Tyler
Bosmeny and 'YC' Partners: Dalton Caldwell, Michael Seibel, and Qasar Younis.
Some information about the guest speakers: Tyler Bosmeny is CEO and Co-Founder
'Clever'. Tyler holds an MA degree in Statistics and a BA degree in Applied
Mathematics, both from Harvard. Dalton Caldwell is a technologist and digital
music entrepreneur. He is the founder and Chief Executive Officer of 'Mixed
Media Labs'. He currently works as a partner at Y Combinator. Michael Seibel is
CEO and a partner at Y Combinator and co-founder of two startups 'Justin.tv'
and 'Socialcam'. He has been a partner at Y Combinator since 2013, advised
hundreds of startups, and has been active in promoting diversity efforts among
startup founders. Qasar Younis is an entrepreneur and venture capitalist. He
was the co-founder CEO of 'Talkbin' (acquired by Google) and is the former COO
of Y Combinator. He left Y Combinator in March 2017 to start his own
venture. The founders were delivering
their own involvement and experience in startup field about how to present your
company. Tyler has found that for high sales it is necessary to examine the
inventors. Even though this is the
smallest market (2.5%) it is one of the most crucial. While managing 'Clever',
the co-founder's primary call list was made up of personal networks, friends of
friends, and cold emails, which were about 400 companies. It is obvious that
the people who you know mentally are always going to be your reliable and
strongest sources. Therefore, it may be difficult to engage with new people
when you’re building a company; however, it is the best way to meet potential
new clients, investors, and connections. Moreover, Tyler suggested that such
meetings usually happen at conferences and not the big ones, as you will have a
chance to make lasting, one-to-one connection with that kind of people. While
proceeding within your call-list it is essential to remember the discussions.
Thus, he believes that the best salespeople in the world do not talk a lot.
They ask a lot of questions to then completely understand the person’s problem.
Next, you should acknowledge that the initial conversation may become the
result, continuous result. Hence, Tyler brought an example of the timeline
which showed that sometimes e-mails and calls might be unanswered, but you
should keep in mind that it does not mean 'NO'. Therefore you will need to run
into people who are just hard to keep touch with. However, this is not the only
difficulty, after even reaching people you can hear the answer 'maybe' which is
not a satisfactory answer. Your aim is to get people to say 'YES' or 'NO'. The
next problem is when people say the word 'IF'. They put conditions saying if
you bring or create a new feature after this we will use your product and etc..
Therefore, Tyler Bosmeny gives several solutions for this problem:
-Sign sales agreement with the customer (which means to add
that new features).
- Assume that you’ll wait to get validation from other customer’s.
Furthermore, remember that you should avoid of free trials.
In the beginning stages of your startup, you’re looking for some deals to be
signed, reference customers, validation, and of course some revenue. Thus,
using free trials will be a burden for getting any of these things. So, Tyler
said: “We don’t do free trials. We do annual agreements and what we’ll do is
for the first 30 or 60 days, if for any reason you’re not happy, you can opt
out.”
Then Michael Seibel
began to share his experience and awareness about pitching. He believed that
actually, you need a 30 second to 2-minute pitch to impress and be recognized.
What is the difference of the timing? First of all giving 30-second pitch is
all about your startup/business/company this is a thing you give those who are
affected and interested, even perhaps not financially. This is the case when
you just gaining users explaining what your startup/business/company is is
about, without attempting to 'sell' it. This way you answer questions such as:
- What does your company do?
- How big is your market?
- How much traction do you have?
Comparing all things you can do in that 30-second pitch M.
Seibel believed that a 10-minute pitch is nothing but a waste of time and
resources. Thus, having long pitch will
bore both audience and investors as you have a big risk to say things which
people and investors don't like. Thus, talking laconic and clear will be more
beneficial. After the first phase (30-second) you should continue (reach
2-minute) to add the next important details:
- What is your unique insight?
- How do you make money?
- Who’s on your team?
- The “Big Ask”.
Thus, these are the main ideas which will assist a pitcher
to have a successful pitch session and gain customers and investors. Next
speakers were Qasar Younis and Dalton Caldwell they gave a conclusion to the
lecture by listing several definitive things you should do and should not do
while pitching your company/startup and asking for money.
First of all what you should Do:
1. Define precisely what your startup does.
2. Develop and prepare the investor for something, giving
them unusual insight into your industry and your business.
3. Influence the conversation progressing with confidence
and accuracy (this comes from recognizing facts).
4. After all, you present during the pitch, ask for money.
Next, what you should NOT Do:
1. Make the meeting feel like a one-sided interview or an interrogation.
It should feel more like a collaboration/conversation.
2. Meet with bad investors. Do research on who you’re
meeting with and if they’re a good fit for your company.
3. Let the conversation end with the meeting. Make sure you
send follow-up correspondence.
4. Take meetings until you’re blue in the face. Fundraising
is not the goal or a measure of success. It’s what you do with the money that’s
important, so stop when you have what you need.
In conclusion,
remember that you are selling to customers and an investor. Therefore, it is
important and influential for you to recognize how to talk about your
startup/company/business as precisely and impressive as possible in the case to
be heard and remembered.
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