There are two very special types of startups that you should know about: the Twitter Startup and the Hoverboard Startup. If you’re one of these and don’t know it, you’re going to screw up your pitch.
Imagine walking in to hear a startup pitch its goods. The CEO gets on stage, clears his throat, and starts talking about the number of teenagers in western countries, and their per capita disposable income. As he drones on about trend cycles and market prediction, you rudely glance at the company summary and it says “Foot-propelled play device with gravitational repulsion field for friction minimization”, and you realize that he’s trying to pitch you a hoverboard.
You’re thinking about this:
and the slide he’s on is this.
You seriously don’t care about his viral strategy or exit strategy, you just want to know if he’s invented the secret of levitation. If he has, you’re pretty sure the rest will follow. If not, then… well, then you’re going to have some stiff words with the “friend” who suggested you meet. A Hoverboard Startup is one where the problem is screamingly obvious, but the solution is prohibitively hard. The only real question in a Hoverboard Startup is – how good is your solution?
Now imagine a second pitch. Someone charismatic and exciting is painting their vision of a new future.
“Facebook has hundreds of millions of users. But you know what? It’s too complicated. Here’s what we’re going to do. First, we don’t host apps any more. They’re distracting and a security risk. Second, we get rid of pictures. Too much storage. Third, we get rid of profiles, or at least all but one sentence of them. We also get rid of school and work affiliations, skip all the new stuff like location and checkins, and pretty much kill all the privacy settings so everything is just public by default. Won’t that be AMAZING?”
You look confused.
“Well, you can friend people. But of course we removed the feature where they have to confirm that you’re friends, so we’re going to rename it to either ‘following’ or ‘stalking’, we haven’t decided. And you can post status updates to your wall. But we decided to cap those at 140 characters.”
“Yes. It’s going to be huge!”
Now think about the questions in your mind. You’d probably look at the technical chops of the founders, consider that what they’re trying to do is a tiny fraction of the complexity of Facebook, and assume that it’s not going to be very hard to solve the problem technically (you’d be wrong, of course, but that’s besides the point). You’d just be sitting at there, staring in wonderment, going, “Why the hell would anybody care?”
In other words, this startup is the exact opposite of a Hoverboard Startup. A Twitter Startup is one where the solution is straightforward, but it doesn’t appear to actually solve any problem.
Now most startups are neither fish nor fowl. Both the problem and the solution seems intuitively reasonable but neither one is totally proven. But recognize if you’re a Twitter Startup or a Hoverboard Startup:
- Instagram (What exactly is the market for mobile photoshop filters?)
- AirBnB (Really, how many people want to sleep on an airbed?)
- CueCat (Do people want their own personal dedicated hardware barcode reader? Oops – no, they don’t.)
- EnerG2 (Yup, if you can make batteries that hold twice as much juice, people will buy them.)
- Mint (If it were somehow possible to make personal finance like 500 times easier, then people would want that.)
- Steorn (Free energy? Yup, that would be nice, if it were possible. Wait! It’s not.)
If none of these apply to you – congratulations, you’re a normal startup. Use the standard pitch deck template, and divide you’re time accordingly. But if you’re a Twitter, you can almost skip the demo – you want to show customer research and traction, because the only thing they’re going to want to know is if anyone gives a damn. And if you’re a Hoverboard? Well, you’d better be levitating by the third slide, or your investor is going to be out of there.