In his talk at London Web Summit, David Tisch, a New York based super-angel with more than 90 portfolio companies, founder of the Box Group and formerly TechStars NY, was asked by David Rowan, “You pretty much see everything in New York. What do you look for in startups you invest in?”
One of his comments really resonated with me. He said he would not invest in the founders that focus on the “WHAT” rather than “WHY”.
- Why are you focusing on this idea?
- Why is this going to be a big company?
- Why do you think it will change the world?
- AND NOT…. look at WHAT we’re doing, our idea, our product features etc.
Too many founders focus on the ‘widget’ and technical details, when what investors are trying to gauge is passion and drive. Why are you doing what you are doing, is essentially a question about MOTIVATION. Be it money, fame, changing the world… that’s all fine, but you need to have an answer to that question because when times get tough, it’s this motivation that is going to help drive the business forward. On the flip side, when things are going well, it’s this motivation that is going to help attract great people to your team and get the most of them when they are there.
Another great tip for consumer startup is to create a hype cycle. Especially in the beginning, your startup can’t afford NOT to have hype. Hype gives your startup a chance to build a story, to an audience that wants to listen. Great examples are Fab for the design community or Pintrest and ecommerce… Creating hype doesn’t have to be about making something up, but it’s very related to storytelling. In David’s words:
If you’re a founder going to a dinner party and you’re unable to tell “normals” what your startup is about in two sentences, even if it’s the most technically challenging problem, you’re a bad story teller.
For more nuggets and interesting advice from NY, watch the video from London Web Summit: