“Start a business, not a startup”
“Ah, the startup. It’s a special breed of company that gets a lot of attention (especially in the tech world).
The startup is a magical place. It’s a place where expenses are someone else’s problem. It’s a place where that pesky thing called revenue s never is issue. It’s a place where you can spend other people’s money until you figure out a way to make your own. It’s a place where the laws of business physics don’t apply.
The problem with this magical place is it’s a fairy tale.”
– from the book “Rework”, from the founders of the trailblazing software company 37signals.
Gaurav started off his interaction by reading off this awesome book which he also recommends for every entrepreneur. I was attending the event “Art of pitching to angel investors“ organized by Indian Angel Network(IAN) in association with Pune Open Coffee Club (POCC) and by Gaurav I mean Gaurav Mehra, co-founder of Saba Software Inc.(NASDAQ: SABA) who is currently the Managing Director of Saba’s Indian operations
Key takeaways from the event:
- Build a business, not a startup.
- Don’t raise money too quickly. Do you actually need external money? Read the book “Rework”.
- There are two types of business viz. the ones that can be invested in and the ones that can’t be. It’s perfectly okay for a business to be self sustainable yet provide no exciting opportunity of an exit to an investor. Usually, investors won’t put their money on those type of businesses. Do your math first.
- Prepare an elevator pitch – it should be as crisp as possible yet should provide an insight into the problem you’re trying to solve, your product, its USP and achievements, if any. 5 minutes max.
- If you’re allocated 40 minutes to pitch to an investor, you actually have 5. Utilize the first 5 minutes to pitch your product. If the investor is interested, she’ll ask questions that will eventually cover your whole pitch deck. But don’t waste everyone’s time by pitching to an investor who isn’t ‘wow’ed in the first 5 minutes.
- If she’s not interested in the first 5 minutes, odds are that she’ll hate you after a 40 minute long presentation.
- Read the book “Rework” by Jason Fried and David Heinemeier Hansson.
The first thing I did was to grab a copy of “Rework” from the nearest bookstore on my way back home. It’s a breezy read and can be completed within a couple of hours. It’s by the rockstars from 37signals and after reading the book, I can now understand why Gaurav laid stress on everyone reading it. It’s one of the best, most practical and crisp business books I’ve ever read.
Cover photo by Joshua Ness