Things that make me "shake" in a meeting with entrepreneurs

I have been meeting with a few hundreds of entrepreneurs so far and there are a few things that start to make me “shake” during a meeting (shake is not good…). There are a few “ideas” or “expressions” that start to disturb me and I often react with humour but i think the tipping point has arrived where i should share it. Who knows maybe that will help in further meetings?

“We have a new web2.0 project”: i have no idea what is web2.0. if you do please explain me first, don’t assume i will guess it. Actually i hate this expression. So now you know it. If you believe you have something new, just explain it and don’t hide behing “buzz” words.

“internet is full of information that nobody knows how to find”: that’s why Google is owning 80% of the market and makes billions every year

“we will do viral marketing to get bigger and in particular address bloggers”: if you ever wrote a blog you should know that all good bloggers (the one you want to catch) are overwhelmed with requests. So you’d better be a bit more specific about being just “viral”

“A new bubble is around”: will not even argue with that. first when you digg, most people can’t really define correctly what “bubble is”. And each time i ask why people think so, then i wish i did not ask the question. I am ready to take any good argument, what makes me “shake” is not the idea it self (after all why not?) but the fact that everyone seems to throw this buzzy idea withtout really understanding it. So far i very rarely heard something holding water. Things could change. but the context so far has not. So i stick to my thinking

“We have no competition”: first make sure that you checked on that well (use BuzzShout or MomB for this), if possible before our meeting. Second you can be sure that if you have a good idea you will have competition. Actually being alone in a market is rather a bad news. Finally you always have competition. If you assume you try to reach internet users, then you will have to convince them to come to your service better than any new service. there are only 24h in a day.

“Alexa shows we are growing”: i have already said enough on how reliable i think alexa is. Come with serious metrics like comscore/hitwise/nielsen but please NO ALEXA (at least not as stand alone). The good news is that if Alexa shows you are not growing >i don’t care, i would even consider that as an advantage

“The blog X reviewed us positively”: so what?. Even if 200 bloggers reviewed you positively (which is great) from a VC point of view, this is not what i am searching for. What i am searching for is a company, not a great blog post.

“We are the eBay/Google of…” Actually that’s fine saying so and helps clarifying your idea. Ambition is good. But just so that you know many entrepreneurs present themself that way. So if you want to be original you might want to find something a bit different ..Curiously nobody wants to be the “Microsoft/MSN” of something…

 

 

 

 

Comments

[Aner Ravon]

Ouriel,

I really like your writing, but you made me "shake" this time too :)...

Basically I agree with everything you say of course. I can probably add a few examples of my own. However, I get a sense of too much VC criticism about Entrepreneurs and too little news about VCs actually making investments. It's not the criticism that bothers me, it's the proportions and the fact that people who join VCs forget the "old language" and switch to "VC language", a language that is not echoed by an array of impressive VC investments.

Many entrepreneurs have great ideas but do not know how to make a perfect pitch. So what? What does that mean exactly?

This, IMHO, is the exact reason for why angels are so much more dominant in the early stage - they are not bound to the "VC rule book", that same book that costs VCs the real interesting opportunities. VCs are doing many things in an attempt to change that situation, including hiring people like yourself who "come from the field". I urge you to not fall into the "perfect pitch" trap, it usually gets way to much credit and overshadows the real value proposition and potential.

To the subject matter itself, I think many entrepreneurs make their first steps when they pitch to VCs. They need to learn a thing or two about crystalizing, marketing, effectiveness and analysis. The VC adventage is in the ability to create the environment that takes them through the process and not in pointing out their flaws. Otherwise those same entrepreneurs you mentioned, or at least those of which who've failed the pitch but have a great idea at hand, will find an angel investor and keep ya guys out of the loop.

[blundstone]

thanks ouriel. its good to see some down to earth info again and no wooing and yaying about new shit all the time.

[Ouriel Ohayon]

Aner

I take your comment very seriously and i appreciate it.

To tell you the truth those are not critical aspects in my approach of reviewing a company. And even if all those things were said during a same meeting (!) but the product, idea and team were good, then that would be no problem.

Actually what i hope is that this post could modestly contribute to help entrepreneurs "polishing the corners" that will be meeting with me sooner or later. Those are things i already say during my meetings. So i thought it could be good to share.

To develop a bit more i am not expecting any pitch by the rules, i am deeply respectful (or try to be) of entrepreneurs and i pay much more attention to the people and the idea that a nice ppt or a pitch. The important thing is detecting a potential.

And my post has nothing to do with "the perfect picth". This is just about again "polishing" the corner. The important thing is not here. Although i have to admit presenting well has an impact on the perception by an investor (including angels). But i try to go beyond that. And many times, i work with entrepreneurs helping them improving their pitch. Many could testify of that. But a pitch is not enough.

Regarding investments....will talk about it very soon again :)

We are working hard to find good companies to invest in at very early stage. I hope will be able to show that soon.

[Pierre-Olivier]

Aner,
Great comment !

Ouriel,
Of course you are right on many points, but may be we can have the points that make you shake again, but positively ?!?

It's the Guy Kawasaki's style, you know ? Top Ten VC's lies or Top Ten Entrepreneur's lies :-)

[ouriel]

what do you mean by positively?

[Aner Ravon]

Thanks for your feedback Ouriel, I know you appreciate innovation and that you know how to listen and see through a pitch. I hope you realize I used your post as a spring board to stirring a discussion.

[ouriel]

And you were right to do so ;) as you said there is always a risk a VC loose touch with what really matters. I am glad you reminded me

[Pierre-Olivier]

Sorry, it wasn't clear. I meant "What has to say an entrepreneur to make his project especially interesting" ?

What are the "must have" of THE perfect pitch ?

[ouriel]

Pierre Olivier, i am not sure i can't help with that. I would say a good idea and a good team? for the rest check out http://www.gemini.co.il/?p=Entrepreneur

[Pierre-Olivier]

Thanks for your answer, and this - useful - link.

My question was more about your own point of view but "a good idea and a good team" are a good start :-)

[Adrian]

With regards to:

“We have no competition”: first make sure that you checked on that well (use BuzzShout or MomB for this), if possible before our meeting."

Thanks Ouriel to the tip-off on Buzzshout..

In keeping current with the latest Web offerings, check out this new feed I've created:

http://feeds.feedburner.com/LaunchpadWorldwideWeb20CaseStudies

contents: Startup Review, TechCrunch, Go2web2, MoMB, nPost Entrepreneurs, Buzz Shout, Mashups via Programmable Web.