Tell HN: Things I Learned From Meeting an Angel Investor
2 comments
Thanks.
Probably you need to work on the idea more or this person just didn't see it. Usually there's a split second thing, they either see it or don't. The rest is dotting the i's and crossing the t's.
>> ""Why wouldn't I just use [most popular competitor]"?"
Unless you were asking them for $1 billion this is pretty dumb. You don't need to be #1 or #2 to make money, and features change after going live.
>> ""Why wouldn't I just use [most popular competitor]"?"
Unless you were asking them for $1 billion this is pretty dumb. You don't need to be #1 or #2 to make money, and features change after going live.
Unless you were asking them for $1 billion this is pretty dumb. You don't need to be #1 or #2 to make money, and features change after going live.
No.
The question is usually meant to extract from the presenter a concise explanation of what will make their product better than the current incumbent. If you can't articulate the value of your idea in 15 seconds or less, it needs more thought.
And while you don't have to be #1 or #2 to make money, few (if any) investors want to invest in a #3 or #7 offering. Also, you kinda DO need to be #1, or at least have every bit of belief and conviction that you will be #1 in some short order. Raising money to build a me-too is "dumb". And people still get sucked into the fallacy of "it's an $X Billion market, and if we can get just 3% of X we will win". You won't get 3%. You'll get 80%, or nothing (measured over a business life timeline, not a short-term sample).
No.
The question is usually meant to extract from the presenter a concise explanation of what will make their product better than the current incumbent. If you can't articulate the value of your idea in 15 seconds or less, it needs more thought.
And while you don't have to be #1 or #2 to make money, few (if any) investors want to invest in a #3 or #7 offering. Also, you kinda DO need to be #1, or at least have every bit of belief and conviction that you will be #1 in some short order. Raising money to build a me-too is "dumb". And people still get sucked into the fallacy of "it's an $X Billion market, and if we can get just 3% of X we will win". You won't get 3%. You'll get 80%, or nothing (measured over a business life timeline, not a short-term sample).
>> ""Why wouldn't I just use [most popular competitor]"?"
Unless you were asking them for $1 billion this is pretty dumb.
I wouldn't say it's necessarily dumb. You fail if you're pitching a search engine and you don't have a compelling answer to "Why wouldn't people just use Google?"
Unless you were asking them for $1 billion this is pretty dumb.
I wouldn't say it's necessarily dumb. You fail if you're pitching a search engine and you don't have a compelling answer to "Why wouldn't people just use Google?"
A search engine needs $100+ million to $xx billions to create and a very different angle to market since Google is bookmarked and people go there to search for stuff. You see Blekko trying to get some press by saying that they deleted 1 million domains from Serps? As if that makes sense
But yeah, if he wanted to create a web search engine, then he was asked the right question.
But yeah, if he wanted to create a web search engine, then he was asked the right question.
Thanks for sharing your major takeaways!
Has anybody had any experience with AngelList?
Has anybody had any experience with AngelList?
* Know in advance of the meeting whoever your most popular competitor would be. Be prepared with a damn good answer to answer the question "Why wouldn't I just use [most popular competitor]"?
* Be prepared with a damn good answer to the question "How are you going to get users?" My experience is the best answer is to both have something on your website that can go viral and also have a good way for users to easily refer more people (like searching their address book for contacts, clicking a button to send somebody an email, etc). Tweets and Facebook Likes are not aggressive. You need to use email.
* When you're making a mock-up of your start-up, be sure to make a mock-up of however you plan to make money. The monetization plan is the last thing on the founder's mind and the first thing on the investor's mind. Potential investors will absolutely ask "how are you going to make money?" "We're going to get big fast and then rely on Google/Yahoo/Facebook to buy us out" is crazy talk and your investor's won't believe it. Seriously: Even if you have a good answer for monetization, BE PREPARED TO ACTUALLY SHOW INVESTORS AT LEAST A MOCK-UP OF A MONEY-MAKING FEATURE ON YOUR SITE - SOMETHING THAT WILL ACTUALLY ACCEPT REAL PAYMENTS WHEN ITS DONE!
* Many, if not basically all, start-ups these days rely on user-submitted content. Be prepared to answer how you will deal with the legalities of that and potentially compensate the users that do the submitting.
It was a tough sell with this potential investor. It didn't work out but I learned a lot. As I meet with other investors, I will share my experiences.