Mikael Cho, FounderFuel alum and founder of ooomf came to Notman today to speak to the companies about how ooomf went from the idea stage at the beginning of the Spring 2012 cohort to signing $500K within four weeks of Demo Day.
In 16 short weeks, ooomf pivoted and pitched their way to a very successful seed round and in his talk, Mikael presented the 4 actionable keys to how they did it.
Numero Uno: Manage your time
There are 3 things you want to do on Demo Day:
1. Show a high quality product in market
2. Show traction
3. Communicate your vision
Everything you do from day one up to Demo Day should serve to accomplish one of these things, don’t waste your precious time on other things.
Mikael said it helped ooomf to set clear goals for each month of the program in order to stay on track.
Tip: Use Show and Tell days to gage your progress compared to the other companies.
Numero Dos: Getting traction
…but not just any kind of traction. Sustainable traction.
Every company, at every stage needs to get users. In order to be able to get users, your company needs to define your customer.
SEO and content marketing take time. In a 12-week program, you don’t have enough time for the real value of these tools to come to fruition. You can’t rely on SEO and content marketing to get you the traction you need. So get creative.
Exploit: (verb) – To Reach your customers via an existing platform that they already use
Airbnb went on Craigslists and replied to posts listing temporary housing to invite them to post on Airbnb.
But you can’t just start emailing potential customers haphazardly. That’s called spamming. You don’t want to do that. Make sure that you’re not spammy by using metrics. You can gage if you found the right platform if you have 5-10% conversion AND less than 1% of recipients get pissed at you.
What if your product doesn’t have such a neatly convenient existing platform to exploit as Airbnb did? Keep getting creative. Ooomf hit up Twitter to follow developers. Appifier, another FF alum, targeted WordPress bloggers — with a 48% conversion rate. 48% conversion is not spammy.
Before you go all out on your exploit, test with small numbers to make sure your message is not pissing people off.
Tip: Use rapportive to learn about every customer on your mailing list — what are they talking about on Twitter, what’s on their Facebook page, are they on LinkedIn?
Numero Tres: The pitch
There are four things that you need in order to get attention from investors at Demo Day.
1. Committed investment: Having a committed investment that you can use in your pitch is such as strong point, that Y Combinator banned it at their Demo Day because it killed other pitches. [Note: FounderFuel allows companies to include committed investments in their pitch, we think it’s kickass]
2. Traction: Quite simply, this is proof that your product works.
3. Quality product: Shows you can execute
4. Future vision: If you can’t do the first three points, at least be able to communicate clearly and effectively where your company is going.
The best way to be ready to pitch on Demo Day is to PRACTICE. ALL. THE. TIME.
When you can stop focusing on the words that you need to say you can focus on connecting with the audience. If you practice enough, you won’t need to focus on the words.
Want investors to give you money? Your pitch needs to target investors’:
Attention –> investors get bombarded all the time, you need to break through the noise
Interest –> tickle their interest with a product demo, show what makes your prod unique
Desire –> make them want you by flaunting your traction and committed investments
Action –> let them know that the train is leaving the station, and why they should get on board NOW
4. Closing your round
Don’t close too early. This is a long term relationship, take the time to build a good relationship with your investors before going to bed with them. Keep it informal – go to lunch, grab a coffee.
Fundraising is a full-time job. When you’re fundraising you can’t do anything else.
How to determine valuation:
– Ask FounderFuel partners for help
- Look online
- Pick a number that you can say with a straight face and gage if investors agree
- For reference, check AngelList for other startups’ valuations
Tip: Once you get someone to write you a check, use that as your valuation to approach other investors.
Tip: Get enough interest on the table to tell new investors that you’re ready to close without them. Put pressure on them to act quickly.
Tip: Set a date in order to create a sense of urgency.