Startups require a lot more than just a good idea. If I have learned anything thus far, it is that even the best ideas can fail if the entrepreneur behind them doesn’t have the passion and skills to see them through to success. Not everyone has the drive to be an entrepreneur… or the guts, or the dedication, or hell even just the time.
This is all made clear in the StartUp Podcast from Gimlet. In the first episode, Gimlet 1: How Not to Pitch a Billionaire, Alex Blumberg walks us through exactly what it was like to formulate, and attempt to execute, his startup idea pitch. His pitch is for Chris Sacca, a billionaire in Silicon Valley who has made and heard many pitches. Sacca, while interested in Blumberg’s idea, highlights everything that Blumberg did wrong in his pitch.
The concept of a good pitch is one that everyone should understand, even if you’re not trying to be an entrepreneur. Every time you have to sell yourself for a job or internship, you are making a pitch. Being able to sell something, whether it’s a new business idea to an investor, or yourself to your potential future boss, is an asset – and being able to do it in two minutes or less is even more important. You never know when you will file into an elevator with a potential investor or colleague.
Blumberg’s pitch definitely needed work, and Sacca helped him figure out what to work on. In the next episode, Gimlet 2: Is Podcasting the Future or the Past?, Blumberg pitches his idea again (after lots of practice) to Sacca’s business partner, Matt Mazzeo. This time, he is ready for the questions, speculation, and high-pressure situation that surround his pitch scenario. Despite feeling ready, Blumberg ends up coming away from this pitch as defeated as the first time.
However, his defeat isn’t due to his pitch being a trainwreck, but rather his realization that maybe he needs to think bigger. While he thought his audience speculations were way too high, Mazzeo told him to think bigger. His idea, the idea that he thought was revolutionary and unlike anything else of its kind, was almost belittled by Mazzeo’s lack of bewilderment at the pitch. It wasn’t to say that it was a bad idea, or that it was any less revolutionary, but Blumberg wasn’t quite ready to realize that the passion and excitement he had for this new podcasting company wouldn’t be shared by everyone he talked to.
It got him to second guess his idea.
As a husband and father, with another job, Blumberg wasn’t sure that he was ready to drop everything and throw himself into this project 100%. This is undoubtedly one of the biggest challenges entrepreneurs face in the early stages of a startup. Is it really worth it to drop everything and risk it all for this idea?
In Gimlet 3: How to Divide an Imaginary Pie, Blumberg then got himself a business partner, Matt Lieber, and had to decide how to split the equity in the company with him. A process, he says, isn’t an exact science. Offering too little equity at first nearly destroys their partnership from the get-go. They end up splitting it 60-40, which both sides agree to be fair.
This process of finding the perfect partner, and discussing equity, is surely one of the more important and yet challenging parts of getting a startup going. Even when I visited the Hatch at MSU a few weeks ago, so much of our welcome presentation focused on the importance of a good team. Without a good team the chances of success are minimal.
The last episode I listened to, Gimlet 4: Startups Are a Risky Business, really highlighted the importance of not chasing the money. Blumberg was forced to evaluate why he wanted to stick with his idea, and what success would really look like for him. And he had to find investors willing to look beyond just the math, and actually invest in him and his passion first and foremost. Luckily, Andrew Mason, the founder and CEO of Groupon, invests.
This last episode was especially inspiring, because it made me realize that there are a lot of ways to make money from a startup. While you need money to get going, funding can come from anywhere. Hell, the founders of AirBnb funded a portion of their start by selling cereal. The most important thing is not making tons of cash, but rather having passion and dedication to the company. You have to be committed enough that you convince people to be committed, too. Without the drive to see the company succeed, you will never be able to get it off the ground.
You have to be able to adapt. Your idea must be fluid, because what you may have thought was the perfect solution at first might morph into something else entirely by the time you are sending it into the market. The more you can respond and reflect the needs of your audience, the more your idea can grow. Without adapting to the situation, you will remain stuck in one place.
People like to invest in people. If you are someone that can be trusted, who is passionate and driven, and who clearly is going to see the idea through to the end, investors will want to get behind you. They want to give their money to people that care.
Startups aren’t easy. They take time, and effort, and resilience. You have to be willing to risk a lot and make sacrifices. If you can stick through it, you can see it materialize into what you envisioned. No one said it was going to simple and painless. You will want to quit, but you can’t. Even if you have a rocky start, and your pitch, like Blumberg’s was, is a mess, you can still make it work. It can only go up from there.