Faithful readers may recall that our software technology company, Dynamic DesignWare, Inc. applied to the TAG Business Launch competition. I was cautiously optimistic: We have a great technology platform, rights to intellectual property, a sound business model, an experienced team and an initial channel to ASID, a prestigious association of 20,000 interior designers.
We worked on the pitch for almost two weeks. The challenge was to make our presentation and create excitement in six minutes. We had to cover all of the usual elements for an investor pitch, including a statement of the problem, how we solve the problem, our team, competition, our business model and financial projections. All in six minutes. Not an easy task.
After our initial dry run with a local legend (his name is omitted to protect the innocent), we knew we had more work to do. Back to the drawing board. After countless hours we had another rehearsal, this time before our mentor, also a local luminary. He pronounced us ready to go.
Unfortunately, we didn’t make it to the next round. But the lessons we learned are universal, and I will share those lessons, along with our presentation’s shortcomings, with you:
• The presentation needs to “pop.” You need to grab the attention of the audience early on. Maybe we should have done the presentation in video rather than PowerPoint.
• You need to be able to define the market. Our judges probably expected us to prove how much designers, decorators and building contractors spend on e-commerce and collaboration software. The problem is, they don’t spend that much and the amount they do spend is difficult to determine. So we tried to show the number of possible users in each category and the size of the furniture, furnishings and building supplies markets.
• The company needs to have a “secret sauce” and proprietary IP. We have both, but we didn’t do a good job of describing them. For example, our Dynamic Bundles enable contractors and designers to create bundles of items, with bundle pricing. What’s unique is that the client can change their bundles or even create their own. Each bundle is priced automatically as it is changed based on proprietary algorithms and the vendor’s objectives. We own our software platform and have an exclusive license of rights under two patent applications.
• Will anyone pay for the technology? The best way to prove this is by sales. We were at a disadvantage, because we hadn’t sold anything yet. But we do have have an arrangement that will integrate our technology into an e-commerce platform that will be offered initially to 20,000 members of ASID, the leading group for designers, and thereafter to tens of thousands of interior decorators. We will be offering it for free on an introductory basis, and thereafter for $25 per month per seat.
• The projections need to be believable. We understand that our projections were not convincing to the judges. This is frustrating. We used Venture X Group, a consulting firm with years of experience building models for venture-backed companies. They were meticulous and based the model and projections on industry research. In a different type of presentation, there would be time for the investors to explore the business model and projections, but we didn’t have that luxury.
Many times I have advised clients and friends who receive bad news in this type of competition, not to be disheartened. In this case I have to follow my own advice. With every presentation and every competition, you should learn something. And there is no shame in changing your business in response to feedback. (It’s called a “pivot”). But you have to persevere. And only the strong survive.