Top Ten Sh*t Not to Say to a VC

I was planning to blame it on demo day, but in reality, I am simply having writer’s block. (Another possibility, I just ran out of interesting things to say – which is very likely given how much I’ve spouted off in the past.) There is a cure; however, for writer’s/blogger’s block – its called top ten lists. The dirty little secret in blogging is that anytime you see someone posts a top ten list – it usually means that he/she ran out of shit to say. So to cure my writer’s block – here is a top ten list: Top Ten Sh*t Not to Say to a VC. (in no particular order)

10. “Blah blah blah blah . . . Daily Deals . . . Blah Blah Blah” – Its unfair, I know – consumers are still lapping up deals, and businesses are issuing coupons like never before. BUT VC’s have all moved on. The reality is that it just takes too much effort, time, and tongue twisting for a VC to tell his buddies how his latest investment is better than all the other daily deal companies that came before it. And it will take too much effort for you too.

9. “Big shots like A,B,C,D,E,F,G are advisors” – Simple rule . . . advisor AND investor is 10x better than just an advisor. Doesn’t mean you don’t want lots of advisors and mentors, you do. You want LOTS of helpful and passionate advisors – just be careful about thinking that VC’s will give a damn. I care about your ability to convince important and influential people to help you build your business (and invest) – I don’t really care who they are, and how many there are. Its not about who, its about you.

8. “. . . . Uncapped Note . . . . ” – If you are an YC company – go for it. The rest of us mortals – let’s get real and understand the point of investors is to have smart people with money on your side.

7. “I’m pretty sure my product will sell itself, I’m not worried about customer acquisition” – Saying that you are not worried about customer acquisition is like saying you are not worried about running out of gas. If you are not, you will eventually. So, pretend you are worried even if you are not and either have a really detailed customer acquisition plan or show some metrics that allay the fears that acquisition would be too expensive or will never scale. Even product purists care about acquisition.

6. “ . . .. SoLoMo . . .. ” – Pick 2 out of 3. Any two. And if you must, at least jumble up the sequence – “MoLoSo?” or “LoMoSo?” . . . just don’t say “SoLoMo.” Everytime I hear it, a tingle goes up my spine (not in a good way), and I’m pretty sure I’m not the only one.

5. “I don’t need to do market research, consumers are incapable of envisioning the future, you just have to give it to them.” – to which a VC could only respond, “I served with Steve Jobs, I knew Steve Jobs, Steve Jobs was a friend of mine. You sir, are no Steve Jobs.”

4. “My product is naturally viral” – Every entrepreneur claims to have a “naturally viral” product. Its like everyone believing he/she is an above average driver. The fact remains that average CTR on facebook news feed links are around .2%  – about the same as banner ads . . . no one has ever claimed that banner ads are viral. Until a product have gone viral, its not viral.

3. “My addressable market is $XXXB” – Any marketsizing higher than $100B (actually, I would really be careful starting around $50B ) is simply not credible. It either means the entrepreneur has no idea how to segment the market to find the initial target customer segment (and thus a smaller addressable market) AND/OR the entrepreneur has no idea how to tie his business model to a market sizing calculation. (e.g. if you are selling foodtrucks , you can’t say your addressable market is the total $$$ of food sold by foodtrucks.) Neither one builds confidence.

2. “I want to build a great user experience, I don’t care about monetization and revenue.” – There are a handful of guys that can say this – Zuckerberg, Dorsey, Page, Brin, etc. Plus the only reason they can say it, is because they have proven abilities to build a large audience AND eventually figure out a way to make lots of money. Unless your last name happens to be one of those, you need to have a plausible business model (BUT typically you don’t need to have exact pricing figured out).

1. “I’m Pinterest for . . .” – You know, I cannot figure this one out. Apparently it is perfectly fine to be “AirBnB for X,” “ShoeDazzle for Z,” and “Dropbox for Y” . . . but the moment someone utters the word “Pinterest for …” everyone’s eyes just glaze over. Just don’t do it.

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