Over a hundred twenty applicants put their startup in the game for Venture Madness 2016. There was a lot of talent and potential brewing as these were narrowed to 64 participants. Over the course of eight weeks, these startups pitched in bracket style matches to place in the top 16. The sweet 16 startups went head to head during the three day the Venture Madness Competition. We asked the judges to give us their main factor in choosing one over the other. Three key considerations echoed among them and resounded with Gregg Scoresby of Campus Logic: CLARITY ON BUSINESS MODEL, MARKET POTENTIAL, CUSTOMER TRACTION.
BUSINESS MODEL. Among the various sections of the business plan, having a clearly defined business model is critical. Make sure your presentation answers the basic question: “How do you plan to make money?” Who is your customer, what solution do you provide, what value do you deliver? How is that different from available options? How will you reach, acquire and keep customers? What is your cost structure and profit margin? And how ill you generate revenue? It is critical that the presenter clearly describe the flow of economics related to their particular technology, adds Matt Likens, President and CEO of Ulthera Division, Merz Device Innovation Center. He expands that “I also favor those companies that can establish a proprietary (either patent protection or a significant competitive advantage over anything else currently on the market) position with their technology/business model.”
MARKET POTENTIAL. Possibilities and probabilities must factor. According to Greg Head, Entrepreneur, VC, and Advisor, the startup must indicate the “likelihood of getting investors and paying them back.” Figure out your customer profile, the geographic area targeted, and the number of those people are in that area to determine your general market potential. Know also the number of competitors and their strengths (and vulnerabilities) in the market area. Conservatively estimate business you’ll take from them or how you will expand the customer base. That, in a nutshell, is the market potential of your business. John Mayfield, Principal, Peak Ventures, stressed the importance for startups to communicate the “strength of the team, magnitude of the opportunity, and the likelihood of success.”
CUSTOMER TRACTION. Don’t present without numbers showing technological or customer or user traction—numbers that show people want your product. Conduct market tests or do a beta launch of your product so you can show customer interest, users joining, etc. “I look at revenue traction and growth,” reflects Travis Wood, Managing Director – Business Development, Silicon Valley Bank. So, don’t just come in with an idea—bring proof that it might be right.
From the start, Randy Gustafson, Vice President of Innovation, Arizona Commerce Authority, looks for indications of success. “While it is a combination of every section of their application and business plan, the overall ability for a company to be successful is a primary factor” for advancing in Venture Madness. “Stated differently, which startup has the best chance to actually scale their business successfully—and either grow it big, or have an exit,” Gustafson explains. Your presentations should always reflect the greatest possibilities for your startup. Sidnee Peck, CEO of SMART Brain Aging Inc, sums it up well. “The main factor that determined one startup winning over the other was traction on an exciting model in a large market.”
Get ready. See you at Venture Madness 2017.