In this syndicated blog post, startup expert Mike Nicholls shares his exclusive insights about what every startup should strive for when pitching their companies and applying to accelerators. Even if you're not pitching your company on a regular basis or have no plans of applying to an accelerator, the wisdom found in this article is bound to apply to your company.
The post, "18 Lessons for Entrepreneurs from 300+ Startup Accelerator Applications", originally appeared on Startup88. It has been republished below with permission.
"I launch startups and develop inventions for a living and mentor a lot of entrepreneurs in my spare time.
In the last 6 months, I reviewed accelerator applications for muru-D, CSIRO Accelerator (Australian Government funded Scientific & Industrial Research organisation, 5000+ scientists) and Incubate.org.
In addition I get over 100 pitches a month on my tech blog Startup88.com and I also reviewed over 500 inventions in the last 3 years in my day job, so I get to see a lot of ideas and startups and repeatedly see the same patterns.
Here are the takeaways for entrepreneurs from the 300+ applications I reviewed recently:
1. You must have the accelerator smashed into the floor. Most startups I see are not operating at full throttle.
2. Traction and growth beats everything else. If you have traction you can get away with anything. Crappy looking business plan, no idea how to make money, team with no track record, all can be forgiven in the presence of a user base who has adopted the product and is really using it, paying users are even better.
3. If you have major traction, proprietary technology or amazing test results please don’t hide them in the back of your pitch, or as they say in newspapers “don’t bury the lede” it needs to be at the very front of application. (This happened numerous times, I was amazed to find a really compelling test result on page 19 of 28 page pitch deck.)
4. Don’t have a 28 page pitch deck.
5. You are probably kidding yourself if you think you can raise money or get accepted to a decent incubator or accelerator without an MVP, preferably with users, the competition is just too fierce. The following exceptions might apply: amazing proprietary technology that has come out of lab or entrepreneurs with a track record.
6. At some point you need to decide that your startup is open for business. Until then its all theory and assumptions and both are probably wrong to some extent. The sooner this happens and you start learning from someone who matters the better chance you have of being successful.
7. Demonstrating you have learnt from your initial user actions and experiments and adapted is important. The last thing an accelerator wants is a startup that won’t experiment, learn and adapt, examples where you have used customer feedback/data to improve are influential.
8. Spend much more time on user acquisition. Remember this:
- Many teams can build a product,
- Some teams can get product market fit,
- Very few teams can work out how to acquire enough customers to breakeven and company failure is almost always because of lack of customers and cash not product.
9. If you can’t convince me you are solving a real problem that someone cares about in the first few paragraphs you have lost me.
10. If you are just starting to build an “Uber for X or AirBnB for Y” you are 3 years too late. Move on.
11. If you are replicating a business model that already has significant funding, Pets, Food Delivery, Uber for X, IOT, Parking, Jobs and you don’t have something highly proprietary/competitive that solves their problems forget it.
12. If you don’t have at least one customer acquisition strategy that is working you are toast.
13. If you are pitching hardware and you haven’t got a sort of working prototype or at least a detailed design its going to be challenging (with the exception of dedicated Hardware incubators like Hax or Bolt but even there the winners will probably have more than a breadboard prototype)
14. In larger competitions (>100 entries) the judges get fatigued (usually around letter M), you cannot afford to be verbose or vague in the first few sections i.e. You must have concise believable answers to the following;
- What does your startup do?
- Whose problem do you solve and why do they care?
- Why do you have an advantage?
- How will you win?
- Often there isn’t a section that specifically asks about traction, but you should weave this into your answers to the first few questions.
15. If you can’t come up with a compelling advantage and reasons why you will be successful then you might want to rethink your entry. I saw numerous (>10) examples of businesses who answered that their business would be easy to copy or couldn’t provide competitive advantages. Seriously WTF.
16. If you are at University and building something that specifically targets a problem which exists primarily in the mind of an undergrad (i.e. food, transport or study) and there are 10 other startups doing the same thing (on your campus) then find something else to do, its not going to end well.
17. If I see another babysitter app, parking app, nightclub booking, drinks ordering app, food delivery to your dorm room app, Im going to scream. Please stop it.
18. Many accelerators require full time commitment by all founders for the term of the program, not much point applying if you can’t be there for the program.
If you are serious about getting into a good accelerator I believe you need to run a few practice attempts. Find last years questions, put together an application, 6 months before the competition (when its not crazy) ask one of the mentors or selectors for feedback about your application and your business.
In the 6 month lead-up to the actual selection process really hammer the testing and customer acquisition and demonstrate to the mentor you have resolved the issues they raised, keep them updated.
If the mentor can see you have benefited from their guidance and made progress and you are coachable then they will probably advocate for you. (note this might not work for the really large US accelerators but give it a try).
Mike Nicholls is an experiecned entrepreneur, inventor, and technologist, as well as the Director of the Invention Development Startup Team at Intellectual Ventures. If you want to hear more from Mike Nicholls, follow him at @Mikenicholls88.