Ready or not here comes the Pitch!

Is a person’s common sense inversely related with their attention to detail or their stress level? Have you ever met a financial guru whose complex financial model simply didn’t make sense or doesn’t take into account questions that start with “What if … ”? Well if you haven’t, just take a walk along Wall Street and you will meet plenty of them. You will also find entrepreneurs with PhDs in computer science or engineering struggling to raise capital for their disruptive new technology—of course everyone believes their product is one of a kind and will change the world. However, there are plenty of breakthrough innovations out there that never get enough VC attention because the masterminds behind them fail to clearly define their business. The reason for this could be that they were paying too much attention to the details and completely missing the big picture. The trick is finding the right balance between attention to detail and the big picture.

While I was working on my MBA in San Francisco I attended a lot of entrepreneurship and pitching events. I sat through hundreds of 2-3 minute pitches and I couldn’t help but notice that there was no shortage of brilliant entrepreneurs with astonishing backgrounds and who were very passionate about what they did. Yet when it came to pitching their ideas they underperformed. At the time, the sole purpose of my attendance was out of curiosity and to see if I could observe and detect—with an outsider’s eye—any generic patterns, and I did.

At the end of each pitch the judging panel or the investors would ask (sometimes complex) questions and allow the entrepreneur very little time to answer, often leaving them under tremendous pressure to give succinct, convincing, and well-articulated answers while maintaining the right attitude … and their poise.

I wrote down all the questions that were asked and the answers that were provided, both loved and hated. I also added other potential questions that I found through research to create a “FAQ Checklist.” I believe that this list could prove to be very helpful to entrepreneurs in their preparation for the big pitch day.

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The big question still remains, what would make investors take out their checkbooks and write a check to a specific company? It ultimately boils down to whether they really believe in the idea and fall in love with it and the entrepreneur behind it.

The above checklist is one tool that would help prepare entrepreneurs for selling their ideas and also give them a 3D view of their business, which would enable them to locate and fix any blind spots they may have otherwise missed before pitching to others. However, making investors fall in love is the tricky part because—as we all know—there has to be a natural chemistry. But even if there isn’t, that doesn’t mean that you still can’t give it a try.

Announcing the ArabNet Digital Summit 2013

For those of you unfamiliar with it, ArabNet aims to be a hub for digital professionals and entrepreneurs to connect and learn. They have recently announced the details of the much anticipated ArabNet Digital Summit to be held June 24-26 in Dubai.

Here’s what you need to know:

  • The heart of the event will be the Forum, three days of panels, talks and interviews focused on cutting-edge trends in digital business.
  • The first day will feature Startup Track, which tackles the recent developments in the MENA entrepreneurship ecosystem.
  • Not only are StartupQ8 members eligible to a 20% discount on the professional rate, one of them will receive a free ticket. To be eligible for both, you need to become a member be signing up to our mailing list. Details will be coming next week.

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Announcing GIST Tech-I Competition for science and technology entrepreneurs

Organized by CRDF Global and the US Department of State, the Global Innovation through Science and Technology (GIST) initiative aims to build entrepreneurial ecosystems in countries across the Middle East, Asia and Africa. As part of their mission, they’re announcing the 3rd annual GIST Technology Idea (Tech-I) Competition.

Here’s what you need to know:

  • The competition has two tracks: The idea stage and startup stage.
  • Participants are competing for cash prizes, mentorship and the chance to pitch their ideas at the Global Entrepreneurship Summit in Kuala Lumpur, Malaysia.
  • If you would like to participate, you need to prepare and submit an executive summary and 2 minute video pitch.

If you have any questions, you can contact Zehra Hirji at the US Embassy in Kuwait. Here’s the full text of the announcement:

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Wrap-up: StartupQ8 7th Monthly Event

We hope you guys learned something and had fun at last Monday’s event (we certainly did). Before we start planning the next one, we wanted to wrap up some loose ends:

  • There was a lot of positive feedback on Burhan Khalid‘s presentation.  Some of you even requested copies, and Burhan kindly obliged. You will find the presentation at the end of this post. Let us know if you have any questions.
  • Similarly, we learned a lot from the interview and discussion with the founders of Vewmo.com, including the founders themselves. They’re still on track for a May launch, we’ll let you know once they go live.

We’re always looking for more feedback on how we can make these events better. If you have any ideas, please leave us a comment or send us a tweet.

A special thanks, once again, to Burhan, Faisal and Tareq for speaking at the event. You guys were super. See you all next month!

Oh, and here’s the presentation in PDF format: StartupQ8-PaymentServices.

What Do VCs Look For?

Over the past couple of years or so, I’ve been coming across great ideas with bright minds that are certainly redefining the startup community in Kuwait and enriching the ecosystem we all work in.  As they learn, build and measure their startup’s progress, smart money becomes key to scaling up and regionalizing their business.  Despite their commitment and excitement, I realized that the lack of venture capital “VC” exposure to local startups leaves a fundamental gap in preparing local startups for venture money.  This post was prompted by a few conversations I had with local startups over the past month as they were shopping for an angel round. Here are key questions to think of while building your startup that will hopefully shape how you position your pitch to VCs once you’re ready for their money.

 

What do VCs look for?

 

  • Trust – How well does the VC fund trust the principals? Can VC work with them? How long have they known each other, worked together and why are they working with each other?

 

  • Team – Does the team have complimentary skill-sets? Do they communicate well with each other? Are they enthusiastic or is this a lifestyle business for them? Is there a blend of corporate and start-up experience in the team? Does the VC have references on the team from people the VC knows well and trusts?

 

  • Mentorship – Has the team gone through an incubator? List the team’s advisors/mentors and what side of the business did they impact most?

 

  • Returns – Possible VC return on investment “ROI” of 20 times in 5 years? Will the startup be cash positive in 18 months? Who’s leading the funding round? Follow-up funding required? When and what size?

 

  • Revenue and Market Share – Is the time required for significant revenue increase far away? Does market share come quickly or slowly? How will you grab market share?

 

  • Market – What market are you in and how big is it (history and projections)? How well do you know your market? What key suppliers/customers can you reference for a quick call? Who are your competitors? How do they compete with you? Market/product momentum

 

  • Product – What is your value proposition? Is the competitive advantage sustainable? Are there market barriers? How durable are they? How much has your product evolved and over how long of a period?

 

  • Customers – Describe your typical customer? Walk us through a transaction. Do you currently have a paying customer?

 

  • Barriers to Entry – How do you prevent someone with bigger pockets from offering the same product? How sustainable is your barrier to entry?

 

  • Cost – What is your costing structure? Does the startup have a cost structure significantly better than competition?

 

  • Profits – Does the plan focus on profit or on product development? (cash flows equal to returns, inventions fill history books)

 

  • Investment proposition – Funding round, size, equity offering, breakdown of investors by category, key terms, proceeds use

 

  • Skin in the Game – Does the management team have a personal financial commitment of their own net worth? What is there for you to lose if you close shop?

 

  • Geography – Is the start-up within 1-hour drive/flight from our money? How friendly are the logistics to taking a trip to your startup?

 

  • Exit Strategy – What is your exit strategy? Clearly spell it out

 

  • Risks –What risks your startup may encounter and how will you address them?

 

Although due-diligence on IP/technology validation is an important box to check, it usually comes post checking all the boxes highlighted above.  I certainly do not speak of all regional investors in MENA, but smart money for startups typically focuses on four key aspects when evaluating an opportunity: Team, product/market, momentum and returns. VCs more importantly invest in game-changing startups that can potentially deliver astronomical returns; if you’re not a game changer, don’t ask for VC money.

Final Reminder: The StartupQ8 7th Monthly Event is tomorrow

A final reminder: The seventh edition of The StartupQ8 Monthly Event is tomorrow at 7:30 pm. You’ll find the detailed schedule below. We have also posted interviews with the speakers at the event (here and here) as well as some useful reading material.

Attendance is free. All we ask is for you to register on the event’s Dawrat page.

See you all tomorrow!

startupq8-event-invitation-7

Three blog posts you should read before starting an online marketplace

Ahead of our “online marketplace” themed StartupQ8 Event this Monday, we wanted to share some excellent tips we found on various blogs that can help entrepreneurs maximize their online store’s performance:

Post one: 5 Retail Lessons For Ecommerce Sites, by Jim Stoneham on Mashable.com

Jim talks about how to bring the best elements of offline shopping to your online store. He advises to let people express emotions, having a platform to showcase trending items, and the importance of enabling 1-click purchases. On the latter, he has this to say:

Ditch the Cart

Pushing a cart around is a drag in the real world and online. Since social commerce product discovery often comes from within a social stream, it is all about spontaneous, one-off buys, not shopping from a pre-defined list. Enable your shoppers to immediately buy with one click rather than filling up a cart they have to manage and can more easily abandon.

It’s all about taking friction out of the system so impulses can result in instant sales. The iTunes store has shown the clear value of this one-click, cart-free approach.

Click here to read the full post.

Post two: 5 Tips for Connecting with Your Customers and Making More Sales, by Mark Macdonald on Shopify.com

Mark’s post focuses on how online marketplaces can increase sales. He shares various persuasion tools and sales techniques that can help increase your conversion rate. A part of his post discusses removing the customer’s doubts:

Risk Removal

Once you’ve got your potential customer in the right buying environment and emotionally connected to your product, the last step is to remove any risk with a solid guarantee. Every potential purchase comes with some risk for the buyer and adding a money back guarantee backs up the promise that your product is making.

Click here to read the full post.
Post three: 7 Usability Mistakes That Will Kill Your Online Sales, by Gregory Ciotti on KISSMetrics.com

Gregory discusses usability mistakes that can affect an online store’s profitability. He stresses the importance of headline emphasis, legible typography and taking read patterns into account in your page design. He has an interesting take on the “3 click rule”:

Relying on the “3-click” Rule

There is an unfortunate misconception out there among some UX designers that if it takes a user more than 3 clicks to do something, they’ll become overly frustrated.

While this makes sense logically, and web users don’t want to have to click around too much to complete a task, sticking to an arbitrary rule with no data to support it is not the way to go.

As it turns out, most users will not give up on something just because they’ve hit the magical “3-click” ceiling, and I’ve got research to prove it.

Click here to read the full post.

So there you have it: 17 tips from 3 experts. Join us at our monthly event to learn more and meet other entrepreneurs in our community. See the schedule and register to attend by clicking here.

Watch Now The Business Design Summit Online

Our friend Mona just told us that the Business Design Summiting is currently streaming online for free via this link:

http://bds.strategyzer.com/

The summit will be running today and tomorrow, and I was just watching a talk by a women that works in Toyota and she was talking about how is Toyota currently using the Business Model Canvas to help them innovate. Very interesting stuff!

Thanks Mona for sharing this with us 🙂

Creating an online marketplace: A quick interview with the founders of vewmo.com

We wanted next week’s StartupQ8 Monthly Event to be useful for people interested in online marketplaces and their challenges. So we asked Faisal AlMahmeed and Tareq AlShaikh, the two founders behind the soon to be launched online marketplace vewmo.com, to join us and discuss their experience. Not only did they agree to that, but they were also kind enough to answer a few questions about their startup for a blog post. Here’s the Q&A:

 

What is vewmo.com?

Vewmo.com is an e-commerce website where customers will be able to buy either products or vouchers for offers at spas, restaurants, salons, etc. We are supporting the small business community is a part of our social responsibility, by making it easy for small businesses to partner up with us and feature their products and services.

There have been many attempts to implement this business model. What makes Vewmo unique?

We are mixing concepts of the traditional online shopping experience and the daily deals experience. Gift vouchers will be available too. We believe that we should sell things that people would want to buy! Hence, the in-store availability of certain products will be displayed on the website. We will also carry some products exclusively, and other products can be bundled for even better pricing.

What are the most important elements in terms of design and user experience?

This is a very important issue that we thought long about and worked hard to address. In terms of design, we made sure that it is uniquely different from what is currently out there. We want the experience to be cozy and neat. We also worked very hard in developing the mobile version to give it a totally different, mobile-centric experience, so that customers can view the products with the look and feel of an app.

What are your plans for vendor acquisition? What about users?

We’re looking for vendors who have a sustainable business line so they can sell products year-round rather than seasonally. Also, vendor diversification is important so that customers can see a variety of products and services. This should be reflected very positively in our customers’ shopping experience. We will also have a “Feature Your Business” section that should attract small businesses to become our partners. User acquisition will be start with an aggressive social media strategy. Everyone in our target market can be found on social media, and it will help to spread the word about our business.

What are your plans post-launch?

We have built the platform, now it’s time to measure and learn. We will closely monitor what sells and what doesn’t. We will evaluate vendor and consumer experiences. These are very valuable elements that you can get for free. We have a dedicated page on our site called “Help Us Improve” where customers can recommend areas of improvement as well as suggest unique products to be featured on our site. Finally, constant adaptation to market changes and consumer taste will be another pillar of our efforts post-launch.

 

Vewmo.com will be launching soon. If you want to learn more or have any questions, join us at the event next week. To view the full schedule and register, click here.

A quick introduction to online payment gateways in Kuwait

One of our more active community members, Burhan Khalid, is speaking about payment gateways at the upcoming StartupQ8 Monthly Event on April 22nd. He will  is the Electronic Channels Development Manager at one of the local banks, and is very familiar with payment gateway issues.

He is also a swell guy, so he agreed to sit through a quick interview about the subject ahead of next week’s event. Here’s what we discussed:

What are the available payment gateways for startups in Kuwait?

There are plenty of options available for Kuwaiti startups looking to integrate a payment gateway. The solution can be local or international.

  • Local gateways include KNET, which is available through all local banks, and credit cards gateways, which vary according to your which bank you use.
  • International gateways obviously include PayPal, but there are plenty of other options out there, including CashU, Skrill, 2Checkout, Gate2Play and many others.

What do the entrepreneurs need to consider before deciding which gateway to implement?

 Each startup has different needs and constraints they it should consider before choosing which gateway to implement. Entrepreneurs should ask themselves the following:

  1.  What level of integration do you require and how much technical experience does your team have? More technical experience means you can handle more complex solutions.
  2. What is the volume and value of transactions that you are expecting to process in a month? Each solution has different rates, minimum monthly amounts, etc.
  3. Do you need the gateway to process offline transactions as well? If so, consider a gateway that can do that.
  4. Do you need the gateway to process payments from different geographical markets, or is your startup aimed solely at Kuwait? If so, consider a gateway that can be used regionally or globally, depending on your startup’s requirements.

What do gateway providers typically ask for to implement the integration?

The most important requirement is that you have a SSL certificate, although that may be waived in certain circumstances depending on your integration requirements. Some gateway providers will put you in a sandbox/test environment before they qualify you for live payments. Others may let you qualify yourself for the live environment.

When should entrepreneurs decide between all these options? Should they just accept cash on delivery (COD)?

First, COD is a high cost, high risk payment method and should be the last resort of payment in most cases. However, the answer to this question is different for each startup. Does most of your target market already have access to credit cards? Will they prefer using KNET? If the startup targets mobile users, did you consider mobile payment options such as Next Pay? While there’s no one right answer, the best thing to do is know your market and do your research.

If you want to learn more or have any questions, join us at the event next week. To view the full schedule and register, click here.

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