Ok so yesterday I went through what was possibly the most terrifying experience of my life so far – Y Combinator demo day. Demo day is when each of the Y Combinator groups does a ten minute presentation to all the other groups demo’ing what they have done so far (5 weeks into the programme). That might not sound like a big deal – it’s only the other groups (and the YC partners) that you’re presenting to – and indeed I had generally been relaxed and not worrying about it much. That was until this weekend when the fear suddenly hit me and I realised – this was DEMO day and NOT presentation. Presentations Kul and I can do – we’ve made so many presentations and pitches to investors that I’ve lost count. We have it all nailed down, practiced and presented – from the opening “this is the problem we’re solving” to the “here’s how we plan on going after the market”. You’d think that presenting to VC’s and angel investors would be far more nerve wracking than to a group of hackers right? Wrong. Very wrong.
Demo day pretty much sums up the difference in attitudes to tech startups out here in the Valley and anywhere else. Out here people aren’t interested in your Powerpoint slides and the typical “The market we’re in is an X billion dollar/pound industry so we only need to take 1% of it to be worth a lot” lines. They want to see what you have done – they don’t want you to explain what you’re doing, they want you to show them. In all our time running boso in London (granted it wasn’t very long, 6 months full time for me and 10 months for Kul) not once were we asked to demo what we were doing. Sure we had plenty of longwinded conversations about our idea and what we wanted to do but not once did someone say “whip out a laptop, connect to the wifi and show me what you’re all about”. Believe me if people had that attitude we would have paid 100 times more attention to every single nook and cranny of our site.
To put it quite simply, when you demo your product there is no scope for bullshit. Either you have a product that works well and is impressive or you have a piece of crap that breaks every two seconds and it’s obvious no one would ever use it. There is no scope for fudging around the edges and making excuses – for those ten minutes you’re presenting the audience is not interested in how hard the fight to raise angel money has been or how you can’t find the right people to join your team. There is only one thing they are judging you on and that’s the projection on the wall that’s hooked up to the laptop from which you’re running your site. That’s a scary thing – peer pressure is a powerful thing and I was amazed at just how much I wanted to impress these people, who are all the same age as me and at the same stage in start-up life.
Well it all ended well, the demo went ok and we were voted as one of the top three most promising companies in the current YC batch (by the YC partners and fellow YC founders) which was quite nice. But it’s got me thinking a lot about the power of actually sitting down and taking someone through what you have built. The three hours before we had to leave for Mountain View (where the YC offices are based) were by far and away our most productive hours since being out here. We’ve been working hard but when you have the pressure of a demo it forces you to raise your intensity up a notch that you didn’t know existed. Kul and I spoke about this on the way back – if we had the mentality that we had to demo at the end of every day life would be a lot more stressful but it would also make us raise our game a whole new level. Maybe every day is too excessive but at the very least – I think getting into the habit of actually demo’ing things when you meet someone important i.e. someone you really want to impress is a powerful one. It also makes the meeting more productive, as the saying goes a picture paints a thousand words and that can be applied across here. A five minute demo gives a much clearer understanding of what you’re all about than half an hour of revenue projection and market research talk (that stuff is obviously very important but I think it’s more later stage – the first five minutes of a meeting are when you really need to engage and make people interested in what you’re doing. If you have a working product to demo you’re already one step ahead of the rest of the pack who are just talking). I’m going to suggest to my friends at Zenopy that they hold regular demo days for each other as I think it will have a big benefit.
Ok so besides demo day this week we also went to the Powerset Series A funding party. I find Powerset to be a very interesting company – they’re going after what is an incredibly hard problem to solve, they’ve raised a lot of money (from very smart investors) and have generated a lot of hype around their prototype. It’ll be interesting to see what happens but I did have the feeling in the back of my mind that perhaps I was going to my first bubble party and would look back in a few years and think about the free food and drink that was offer and say that’s when the crash all began. Time will tell but people like Reid Hoffmann and Peter Thiel don’t invest in average start ups so I’m sure the Powerset guys have something special under the hood.
At the party though I ended up meeting a load of Facebook people – including Mark Zuckerberg himself which was pretty cool. It probably sounds a little pathetic but I was actually kind of star struck, I’m still adjusting to the fact that the guys who have started all these amazing start ups actually live in the same neighbourhood as me now and I’m going to bump into them every now and then. I was met Aditya (one of the first engineers at FB), Ruchi (another early engineer) and Jeff (who I knew from a house party in my first week out here). The first thing that struck me is just how young these guys were – they’re managing teams, making recruitment and strategic decisions and they’re only a couple of years older than I am. When you think of Facebook as being one of the most exciting companies in the Valley right now and then you realise it’s being driven by a young team it makes you question a lot of assumptions. So my “intended” career path had been law – where your pay and rank is determined purely by the number of years you have worked at the firm for. When you hit a certain age maybe you make partner and maybe you don’t. But the point is that age and experience rule in that culture and not raw ability. Why do we have to assume that we can measure the ability to perform well purely by the number of years someone has worked in a particular field? Mark Zuckerberg doesn’t have 10 years experience of running companies worth $1 billion but he’s doing a pretty good job of it so far (he obviously has an awesome team around him but he’s the one who put them together in the first place).
And that tapped into something else I’ve noticed since being out here in the Valley – age is nowhere near as a big a deal as it was in the Uk. I remember one of our first conversations with a Financial Director we brought on board for boso in the early days – it revolved around our next hires. Apparently we needed to get some grey hair on the team to give us credibility and make sure we didn’t make rookie mistakes. No. What we need were grey haired investors who would lend us their resources (of which money is only a small part) and leverage their experience where we needed it without trying to run the show. The management of the company had to come from us and so what if we’re just out of university/college. Why does someone who has spent 10 years analysing financial markets have a better chance of making a success out of an idea we live and breathe everyday? The attitude in the Valley is that your age is determined by the number of startups you’ve gone through – there are people here my age who have already started and scrapped a couple of companies. That gives them experience and all the “grey hair” they need.
If you want to replicate the Valley and develop and ecosystem you really need to start believing in young people. And believing in young people isn’t patting them on the back or giving them an Enterprise Week where they can network. It’s giving the money and telling them to go away and make something happen with it. Even the VC’s (the most risk averse of all investors) in the Valley do it (Sequoia invested in Loopt, of which the CEO Sam Altman was still in college at the time and the Youtube guys weren’t exactly planning their retirements when they raised VC).
It’s also why the Y Combinator set up is special – it focuses on smart young people and gives them just enough to go away and build things. It’s not complicated. What I’m realising everyday is that a lot of this stuff isn’t complicated. Building a startup is not rocket science and it doesn’t need 15 business analysts. It’s all the peripheral distractions (raising money, budgeting, investor relations, sales, etc) that are complicated and hard. The actual part of just building something and tweaking it until you’ve made something people want and need to use is actually fairly simple. You sit down and work and focus all your energy on that. Knowing what to do is not the hard part, actually doing it is. That’s why you can get away with Powerpoint slides but you can’t bs your way through a live demo.
Right we’re running low on food and I need to shower so catch you all soon.