How to Win a Tech Start-up Competition

Dan Doperalski, ddoperalski.com

Minbox pitched an image-driven email client and won favor among the judges--as well as seed capital from the Boulder, Colo.-based accelerator TechStars.

For a certain kind of tech start-up founder, the pitch contest offers a thrill that few other events can deliver: You have only a few terror-filled minutes to successfully demo your product (using shaky wi-fi, no less) in front of a firing line of judges who can—and will—find holes in your idea big enough to drive a truck through.

I've spent the last two days camped out at this year's Launch Festival, a tech start-up competition in San Francisco founded by entrepreneur and investor Jason Calacanis, where more than 40 start-ups competed for more than $1 million in prizes and seed capital.

In between the pitches, I asked investors and judges what it takes to make them sit up and pay attention.

1. The shorter your pitch, the more successful you'll be. 

Calacanis claims that after five years of putting together the start-up competition, he's learned that the more quickly founders can articulate their business ideas, the more viable their companies usually are. Your first sentence is critical—state what your company does as clearly as possible. If you nail it, "I start thinking about what's possible to do with you," says AngelPad founder Thomas Korte. "If you don't, I stop listening because I'm trying to figure out what it is you do."

If you're given five minutes, don't practice a five-minute pitch; aim for just over four minutes. "If an investor is looking at you as a manager of an idea, they watch how you behave and how you manage time," says IdeaLab founder Bill Gross, a Silicon Valley tech veteran who picked up a lifetime achievement award at Launch. "Your demo is an indicator of how you'll manage everything else." 

2. Identify the problem you're solving.

And don't stop there: How do you know it's a problem? And is it a big enough problem to support your solution as a business? These are all questions you need to answer. Here's where Space Monkey, voted best overall start-up at Launch, made the most compelling pitch. The company framed itself as a cloud storage provider that's cheaper and more secure than everything else on the market. The details of the technology behind it were complex, but the judges immediately understood the value proposition.

3. Pay attention to voice.

This one is a deal breaker at a tech conference: Don't be the one with the slick salesman voice. Oversell your nascent product and you lose credibility real fast. "Be real, be conversational," says Dave McClure, founder of the tech accelerator 500startups. 

4. Never, ever use a video to give your pitch.

Start-up competitions are about giving live demos and speaking directly to the judges and the audience, says TechStars founder (and Inc. columnist) David Cohen. The fastest way to turn the judges against you? Skip the tough step of personally pitching your company and rely on a canned video instead. One poor soul learned this the hard way at Launch and took heat from the judges for it.

5. Explain why the heck people should trust you.

This one seems basic but it tripped up a number of start-ups at Launch. Often the entrepreneurs waited until they were grilled by the judges to mention that, oh by the way, their team includes an ex-Google engineer who really knows location-based technology or a former Merrill Lynch finance guy who's the perfect person to launch a beneficiary planning app. 

"It's important to show that you have experience in your domain to build audience confidence," says Ryan Swagar, managing partner of venture51, a seed-stage venture firm that sponsored Launch. "Craft short bios that demonstrate to the audience why you and your team are tailor made for the job."

6. Pitch to the decision makers.

Customers want to know why they should use your product or service. Investors want to know how they will make a return. Who's picking the winning start-up: an audience of potential customers, investors, or both? "A number of companies I saw at Launch focused on the product but not about plans to scale," Gross says. The panel of investor judges were quick to nail anyone who didn't articulate some kind of growth strategy.

Website Blunders to Avoid

Privacy policy missteps have led plenty of start-ups into hot water. Here's how to avoid a legal (and public relations) nightmare.

After incorporation, one of the first "legal projects" for any start-up is crafting its terms of use and privacy policy. Recent high-profile news items dealing with online policy mistakes have made entrepreneurs nervous about this process. Avoiding these four blunders can help prevent a what could be both a legal and a public-relations nightmare. 

Mistake 1: Choosing Style Over Substance

Yes, contracts are boring and Web pages jammed with legalese violate every notion of community and simplicity that you've been working long hours to build. Why not go with a lightweight terms of use and privacy policy that touches on the big-picture issues without offending user sensibilities? Bad idea. You craft online policies to protect your company. These policies will fail to provide adequate cover if they are ambiguous, sloppy, or filled with loopholes. Terms of use can't be reduced to a small infographic and still properly address user conduct. A privacy policy can't be boiled down to two sentences and fully disclose how you handle data.

This does not mean that your policies should be long-winded and hard to read. Clarity should be your goal. You just need, at a minimum, to keep two core tenants in mind: 

• First, your terms of use should thoroughly outline how your site, app, or service operates, what user conduct is prohibited, and how you can terminate user accounts for violating conduct restrictions.
• Second, your privacy policy should thoroughly describe each and every way in which you'll be handling user data. 

You shouldn't be afraid to let inject your start-up's voice into your online policies—but don't let style trump substance.

Mistake 2: You Don't Ask Your Lawyer to Review the Policies

The two core tenets mentioned above are the general "rules of thumb," but there are going to be many other, more subtle issues relating to you business model that need to be addressed in your online policies. This is where your lawyer comes in. I am not telling you to recreate the wheel. It is OK to model your policies after those that have worked in the marketplace—but you should take the time to carefully tailor the policy content to your business.

You also need to be sure that you are following industry best practices. Any good start-up lawyer has an internal checklist of the "must-haves" for online policies—and she monitors the market to keep that checklist current. Company counsel can also help you stay mindful of policy provisions that are more likely to be affected through the corporate lifecycle, like those relating law enforcement inquires and acquisitions of the company.

Finally, your counsel can also help you deal with nuances of changing law. For instance, she can help you make appropriate updates that are legally enforceable and comply properly with specific legal parameters, such as the Children's Online Privacy Protection Act and the European Union Data Protection Directive. 

Mistake 3: You Never Update the Policies

Online policies are dynamic documents. You simply cannot draft them once and then forget them. There are too many moving pieces: the legal landscape, your business model, and the demands or identity of your user base. Check in with your counsel periodically (at least once a year), as well in connection with any product or business model changes, to see if your policies need an update. Keeping your terms of use and privacy policy current can go a long way in keeping the company protected.

Mistake 4: You Don't Have an Effective Response System in Place

As I am fond of point out, legal documents don't solve problems by themselves. Creating the perfect set of online policies is meaningless if your users can't reach you to discuss or enforce them. In fact, user disputes and public-relations headaches are often a result of the inaction of the company in handling inbound requests for attention. I once worked with a client who let user emails over inappropriate content, disputes and privacy issues pile up for months at a time. The results? A frivolous lawsuit that took countless hours and tens of thousands of dollars to settle, and left many unhappy users and negative vibe throughout the blogosphere. That company now has a 24-hour response procedure in place. Don't insist on learning this lesson the hard way!

Tips, Become a Household Name

You're no celebrity entrepreneur--but that doesn't mean you can't grab a little bit of the spotlight.

Some people get lucky. They wind up on shows like "Shark Tank" and even if they lose, their half hour of fame is enough to launch them into the spotlight and off they go. Or they land a favorable piece in Inc. or The New York Times and never look back.

Of course, that's not how it happens for 99% of struggling entrepreneurs out there. And that means if you want the spotlight you need to find ways to grab it yourself.

Start by becoming a subject matter expert. Here are five simple ways to do it:

1. Self-publish a book – Publishing an eBook is seldom lucrative, but it can cement your expertise and provide big media opportunities. To generate awareness, give away at least a portion free via your website. (That's what I'm doing now with my Modern Parent’s Guide to family technology.) PDF publications provide the simplest and most cost-effective solution. But numerous services like Lulu, iUniverse, Blurb, Wordclay, Xlibris, CreateSpace, and AuthorHouse also provide affordable print-on-demand solutions, including entry into Amazon.com and Barnes & Noble’s catalogue. Many offer distribution through eReader-friendly formats as well, though anyone can publish directly to iBooks and Kindle in hours.

2. Create your own video series – Shooting Internet-ready HD videos is straightforward with a tripod and a video camera you can get for less than $200. Check out the Zoom Q3HD or 3D footage-capable Bloggie 3D. (Although, technically, an iPhone 4 and apps like Qik or Socialcam can produce perfectly good clips for online distribution in a pinch.) Models like the Bloggie Live even offer affordable real-time online streaming. Get an external microphone and a few clamp lights (~$10 at Home Depot) for enhanced visuals and audio. Keep videos short (1-3 minutes), arresting (grab viewers in the first 5-10 seconds) and singular (personality trumps production values). Clips should cover no more than three key messages; create value by offering hints, tips, advice or exclusive access; and include a call to action, such as a link to visit your website to enter a contest. Then get your video on YouTube, Metacafe, Vimeo, Justin.tv and UStream for the widest possible distribution.

3. Start a newsletter or magazine – It’s easy to transform Word documents (books, white papers, research reports) into readily redistributable PDF documents with online converters, Adobe’s official service, or free Microsoft Office 2007 plug-ins. If you’d prefer to produce slicker-looking volumes sans newsstand distribution, try short-run print or digital solutions like Zinio, MagCloud, and Issuu instead. Email newsletters might be a better fit if you want to establish frequent dialogue with customers and want detailed analytics on how many people you're reaching. Options such as MailChimp, Campaign Monitor, Constant Contact, Benchmark Email, and MadMimi are cost-effective and provide easily customized styling.

4. Build a following with a blogs – There are lots of blogging platforms out there: from WordPress and TypePad to Blogger and Movable Type. If cost is an issue, style at minimal expense using an attractive off-the-shelf template ($20-50/avg) from ThemeForest, WooThemes, HTML5 Themes or competitors. All posts should be equipped with buttons for sharing through Facebook, Twitter, LinkedIn, and Google+. (Hint: Quickly installed plug-ins such as Twitterfeed and Sociable make it easy to spread the word through social networks.) Give your key employees official blogs as well—it will help you grow your network of experts and enhance search engine performance.

5. Contribute to community forums – Part of establishing name recognition includes being a valued contributor to industry-related groups and forums on Facebook, LinkedIn, and other popular online channels. Share your expertise through articles, surveys, research, or detailed analysis. But while participating in existing social networks or building your own custom community can be useful, don't undervalue traditional networking opportunities. Make a point to volunteer with organizations and speak at conferences and events within your field. All can serve to make you a strong, stable and welcome presence in the industry, and connect you with like-minded experts who’ll help spread the word.