As a mentor at 500 Startups and connector at VegasTech I get a lot of founders asking me how to get in or pitch to these incubators and funds. Before I can make any introductions or referrals, I need to play armchair VC myself. My reputation is on the line for any connection I make, so I need to understand the business first.
Normally, my first question and feedback is around The Pitch Deck, but sometimes these founders do not even have enough information for a deck yet.
Below is a recent email conversation with one such founder. I hope it will be helpful to others in a similar spot.
Dear passionate entrepreneur,
>> So, you don’t have anything built?
It would be good to build *something* to demonstrate the minimum viable product.
>> Do you have users waiting to use the product?
> A lot of people want to make that easier but today doesn’t have anything like that for all the professionals
So, I would recommend getting a list of actual specific people who tell you they want this product. Launchrock.com is good for something like this. It helps you get better at communicating what you are trying to create in such a way that people want to give you their email address at least. You can do this even before building anything. And it is work you would eventually need to do anyway, so why not get started?
>> Who are the top 5 competitors in your space?
> Today we have [redacted] but is just for [redacted]
I know I have personally seen at least five other companies doing something similar in this space. So, I would recommend doing more research, and making a huge list of competitors. They might not even be direct competitors, but there are other companies that address this problem in one way or another. It might even be “email” or “google doc spreadsheet”. The better you understand how they are trying to solve the problem, and why people might still not be happy enough with those solutions, makes it easier for you to create better solutions.
>> How are people solving it now, and how much does it cost them?
> Now is just me and my brother he is a software maker with JAVA.
Not, who is building your product, but how are your potential customers currently solving this problem. Like I said above, it might be through email or a spreadsheet, but if people aren’t trying to solve this problem now, they probably won’t have a need for your product. So, you need to DEEPLY understand how they are trying to solve it now.
You also need to know how much they are currently paying for a solution. Either with cash, or with time lost. They might spend 4 hours a week doing this work manually, which costs them: 4 hours x 4 weeks x $25 = $400/mo
>> Who else is on your team?
> Me and my brother
Do you have partners? Advisors? Mentors? The first two people you plan to recruit/hire? People who believe in you and your ability to make this a business?
Keep up the hustle!