This Monday, we met with Wave45, the premier destination for urban videos on web, mobile and set-top devices. This company plays in the modern content distribution industry, and utilizes all our digital real estate to compete.
I found this meeting of particular interest because of the founder, Adrian. Adrian is a self-taught coder, but a business development person (aka a “hustler” in NYC startup lingo) by nature. It is always impressive to see someone learn how to code to make their vision a reality. Coding is not something for the faint of attention span, as it will get painful and boring, but being able to build your own demo makes it totally worth it.
Wave45 was a clear example of such. Adrian and I discussed his concept, and then I was wowed by the self-created demo he was able to show me on his iPad. The focus of our conversation shifted to what investors like to see in a startup before writing checks for hundreds of thousands of dollars, and I suggested the following topics to consider:
- Team: Who is on your team and why are they the most awesome at solving the issue you are tackling?
- Traction: How much usage, engagement or sales have you gotten from the market? This also implies that you have built a product that is in the market
- Opportunity: Now that you are really in the thick of the market, how big is the potential landscape?
These were just some first step suggestions, but I drew them from my experience and thoughts. When I have been in the shoes of an early stage investor, the first thing I care about is how strong the team is. Often times you hear investors “back people, not ideas”. This ideology comes from the notion that a great team with an OK idea will do well but a great idea with an OK team is destined to fail. Second, having traction implies a great deal, including stats on a company’s sales, profitability, user engagement, and other market tested items that are required to have “traction”. As an investor, you want to know that the product you are potentially backing has started to be market tested and is showing that people value it. Having traction also displays a team’s ability to execute and get a product to market, and also that team’s ability to listen to the market and improve the product to get further traction. Finally you want to get a sense for the opportunity. As an investor, I cannot know every single nuance of a marketplace, but an entrepreneur who is on the ground in the day to day should have a better sense for how valuable and big their opportunity is. An entrepreneur who is honest about the market they are in become highly valuable, as investors can consider them trustworthy. Thats why the best teams comprise of entrepreneurs and investors who work well together – an investor who trusts an entrepreneur who is on the ground and can see the full opportunity to service large scale under addressed needs will put more capital behind that entrepreneur and give him the runway he will need to be successful.
I’m looking forward to meeting with more entrepreneurs and sharing their stories. #IncubateNYC loves to be a partner to tech startups in growing sales faster, and I look forward to making your business insanely awesome soon!
#HustleMondays is a chance for tech startup entrepreneurs to discuss strategy and resources with #IncubateNYC. If you have a healthcare, wellness or financial tech startup and want to strategize how to grow your business faster, drop us a line firstname.lastname@example.org today!