This is a continuation of of lessons I am posting on this blog. I may use them to do a podcast or even a video course. Not sure, yet. Look forward to your comments here or feel free to send an email to flightofthewildduckbook@gmail.com. Don’t forget to read my book, The Flight of a Wild Duck.

I thought I would share my approach to first meetings with entrepreneurs. Others will have different methods. It is essential to be adaptable.  

Skip the Demo

“Don’t give me a demo,” I would say as entrepreneurs started their presentation. Then, I would observe their expressions, which slowly melted into a range of emotions: astonishment, bewilderment, shock, confusion, frustration, and even anger. I deliberately provoked their reaction to observe their response, which often gave me much insight. Asking to reroute is a form of stress testing that helped me asses the management’s ability to respond to changes. But mostly, I did not want to see the demo, especially at the beginning of the meeting. I might ask for it only once I understand the business and want to understand more.

While demos can be helpful to an investor’s understanding of the Opportunity being presented, they can also be deceiving, creating an impression that the company is further along than it is. The demo is about the company’s product, but a company has to be more than the product. While I knew that, so many founders did not. They thought of their business as the shipping container for their product. 

Often, I asked if we needed to go through their presentation. If they said yes, I would ask how many slides and ask them to keep the formal presentation down to 20 minutes. My preference was to have concepts explained to me interactively. I wanted to ask questions because not only did I want the answer, but I wanted to explore the depth of the person answering.

Having multiple team members at the presentation, even if only one is speaking, was invaluable. I would look into the eyes of the others to gain valuable insight into the team’s dynamics.  

Opportunity and Strategy

Understanding the Opportunity the company was addressing and their Strategy for pursuing it was paramount to me. Unless the Opportunity was not compelling and the Strategy believable, I had no further interest. It should only take a few sentences, a paragraph at most, to convey the essence and potential of the Opportunity and the path to achieving it. Not only is it essential to do this for potential investors and customers, but it is also an essential ingredient in aligning all the company’s employees. If you want them to March together, it is helpful if they know where they are going and how they are supposed to get there. 

I remember when Mark Cuban and Todd Wagner presented broadcast.com to me in early 1997 (it was a bit like Shark Tank, but this time, Mark was on the stage, and I was the judge). They explained that many people wanted to listen to sports games played by their former college teams. Hundreds of such sports events took place weekly, but there was no way to access them then. Mark and Todd had devised a way to recast local radio coverage, unlocking a significant market opportunity. I was excited to hear them explain the potential even though I had never attended a sports event. Radio, which was only audio, did not require much communication bandwidth, which was great because broadband was in its very early stages. It would take until the year 2000 for there to be a million broadband home subscribers. We (Intel Capital) invested $3.8 million into broadcast.com. Yahoo bought the company a few years later, and we sold our stock for over $75 million. Mark and Todd did not spend any time talking about the technology, nor did they demonstrate it. They focused on Opportunity and Strategy, and they won me over. 

Homework for Aspiring Entrepreneurs

An excellent way to develop the skill of articulating both the Opportunity and the Strategy is to use companies you know and write a paragraph describing the Opportunity and Strategy as you understand them. Examples include Airbnb, Uber, Tesla, Salesforce, Slack and Facebook.  Feel free to send my your home work at flightofthewildduckbook@gmail.com.