Jason Cohen is a Director at Capital Factory, one of the summer accelerator programs like Y-Combinator and TechStars. He’s the founder of four companies, most recently WPEngine, and blogs weekly about startups and geekery.Thinking of applying to one (or all) of the summer accelerator/incubator/angel/mentoring programs like TechStars, Joystick Labs, or any of those found on this comprehensive list?
We collectively get thousands of submissions, but only 1% are selected. If the odds alone aren’t bad enough, consider the imperfect information used to make that selection: A generic online application form, a few emails, and 15-60 minutes of in-person interview.
It should be equally clear that excellent candidates are sometimes not chosen. Part of this is sheer numbers: If only five companies are selected out of thousands, surely “Company #6″ wasn’t a terrible candidate. It mostly has to do with the applications and what happens in those crucial follow-up emails and ephemeral interviews. Since this is the part you have control over, it makes sense to prepare.
I’ve reviewed hundreds of startup pitches and I can tell you that everyone makes the same types of errors. Because of this, those who avoid just a few will already stand out from the masses. To help you get an edge, here are the most common pitfalls and what you can do to hack those summer startup accelerator applications.
1. Building for Yourself Instead of a Market
“Scratching your own itch” is how many great ideas begin, but it’s not a business strategy. Often you assume your customer is the same as you — sees the problem the same way, wants to solve it your way, and wants to pay for it. But this isn’t the case. It’s easy to let your idiosyncratic preconceptions prevent you from observing what the larger market will accept. If you stumbled on your idea because you had the pain yourself, that’s fine. Make sure, however, that you have real market validation behind your proposal.
2. Lack of Any Market Validation
It’s no exaggeration that most applicants have not found a single person willing to pay money for this product. Sounds bleak when it’s put that way, right? The other mistake is saying that a dozen friends have told you it’s a great idea and they’d use it too. Of course they will, and they might mean it, but that’s not a market, that’s a fan club.
Almost no one does this: Spend no more than $100 on AdWords to drive traffic to a landing page where you describe the service briefly and request an email address. In exchange for the email address, you promise not only early access, but free service for life.
Even if you collected only 20 emails, it represents infinitely more value on your application. It isn’t complete marketing validation, but it does satisfy one of the most obvious objections: Does anyone care?
3. One-Sided Competitive “Analysis”
Most competitive analysis charts look like the one at left, with your product winning every category. While it may seem impressive, constructing one-sided analysis like this will ultimately do a disservice to your app.
The point of “competitive analysis” isn’t to say: “I’m better than everyone else.” Rather, it’s to define your niche in the market and explain how you own that niche better than everyone else.
That means admitting the strengths of the competition — who has great customer service, who has more features, who already owns their niche unquestionably?
Only by truthfully defining the landscape do you earn the credibility to claim the territory you’re planning to own.
4. No Route to Customers
If your marketing “strategy” is to run split tests on landing pages and generate a buzz on Twitter, it’s an auto-fail. Why? Because everyone does that. It’s not unique, it’s not an advantage, and as a result it doesn’t work very well.
You should have one (or more!) routes to customers which are more under your control and more likely to stand out from the background noise on the web. Though it’s a tiresome cliché, having viral/social/sharing as an inherent, required behavior of the system is one of those routes. (And no, putting retweet buttons on web pages doesn’t count.)
But there are others. A less-glamorous but highly effective way is to find where your potential customers are already congregating (online or off) and strike a deal with whomever controls that place, either because you’re increasing something they already value (e.g. pageviews, loyalty), adding to their bottom line (rev-share), or giving them something new to talk about.
5. Claiming False Competitive Advantages
The following are not competitive advantages: “We’re better at SEO;” “We’re better at social media;” “We’re good at design;” “We have a unique feature;” “We’re passionate;” “We’re less expensive.”
Why? Because every one can be matched or surpassed by any competitor, today or tomorrow, in very little time. So don’t mention it, or at least not in the context of a long-term competitive advantage.
Here are some true advantages: “We have a unique combination of high-tech talent and insider experience;” “We have a model that is unprofitable for established competitors to copy;” “Our resumes prove we’re able to execute;” “Celebrity X has endorsed us;” “We’re willing to be worse at everything except X;” “We have an exclusive partnership with an important player in the space.”
In the end, it’s actually OK if you don’t yet have a solid competitive advantage. That’s one of the things we might develop during the summer program. Just don’t claim one if you don’t have one, because then you just look ignorant.
6. Winging the 60-Second Pitch
We’ve all heard of the elevator pitch, but last year, when asked to produce it, only two succeeded in delivering one in under a minute, and that’s among the select three dozen startups invited to do in-person interviews. This isn’t important for showmanship. It’s important because the act of cramming everything important into 60 seconds forces you to make strong choices.
Choices like: Who exactly is the target market? What do you do in five words — for example, the headline on your home page? How will you make money? Why does anyone care?
When you can’t do it, it’s either because you haven’t really decided what you’re pitching, or that you can’t be bothered to articulate it to anyone. Both are death for startups.
Of course, it’s OK if by the end of the summer program the pitch is completely different. Having clear thoughts doesn’t mean unchanging thoughts. It just means you’re aware of what you’re doing at any given moment.
7. Ignoring Your Faults
You might have all sorts of shortcomings — it’s your first startup, you’re inexperienced, ignorant about how “sales” works, you have buggy software, etc. None of this is a problem if you’re willing to acknowledge and cope with it, but if you persist in lying to your customers about it, that’s a problem. (And a lie by omission is twice the lie.)
App reviewers know when you’re fudging it. It’s OK. Remember, we’ve built several startups with our own hands. That means we were in your shoes! We get that you might have shortcomings.
One of the most impressive things you can do is clearly and succinctly enumerate your gaps in knowledge, your holes in product concept, your bad design, and what you still don’t know about your market. Professing this ignorance proves you’re ready to fix it. You’re jumping at the chance to learn both through your own trials and from us, the mentors. That means you can grow and improve by leaps over the summer, which means you’re the perfect candidate.
Final Thought: Honesty Wins
I don’t care that your resume doesn’t prepare you for a startup — mine didn’t either. I know your pitch won’t be polished — that’s not important. We both know there are gaps in your startup and you want help — that’s why you’re applying.
The best thing you can do is be honest. In fact, if you review the points above, everything from “faults” to “competitive analysis” is really about just being honest.
In the end, we’re mentors, and we want to work with people who are not just hardworking, passionate, and have a really cool business idea, but also introspective and genuine. Otherwise, it wouldn’t be fun and fulfilling to mentor. Sure, we’re investors. But most of the mentors will agree that if it wasn’t for the thrill of mentoring, we wouldn’t be doing this.
So be honest, throw everything out on the table as concisely as possible, and let’s see if we’re right for each other.
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