Written by Justin Baker
Ever since I quit my job at a grocery store to start my own lawn care business when I was 15 I’ve always wanted to run my own business. After college I started a career in Internet marketing because a lot of other people were finding success as entrepreneurs in that field. After a few years working for other companies I had the confidence and the know how to start my own so I built a site to solve a problem myself and many other people had. I had a great idea and I knew how to turn it into a fully functional site, but I didn’t know how to get other people (especially journalists and investors) to give my site a try. I read a lot of blogs written by other entrepreneurs and all of the offered the same advice on launching a site: Do it at a big conference.
I took that to heart and went after the best startup conference I could find – the Launch Conference run by Jason Calacanis. If you haven’t heard of him Jason is one of the most powerful men in the early stage web investment scene. He created Silicon Alley Reporter, Blogger, Mahalo and he was the co-founder of the TechCrunch 50 conferences that launched successful startups like Mint and Yammer. When I heard he was creating his own conference to help startups get off the ground I knew I had to launch there.
By the time I found out about the conference it was too late to apply for the main stage, but I could still show off my site along with 100 other web startups in the demo area. With a guest list that included Aaron Patzer (Founder – Mint), Kevin Rose (Founder – Digg), Matt Coffin (Founder – LowerMyBills), Mike Jones (CEO – MySpace) I thought the Launch conference was a great place to show off my new company.
The conference got started at 7:30 AM on Wednesday Feb 23 and it didn’t disapoint. Many successful founders, investors and journalists were milling about the building by 9 AM as the show was about to get started. 40 handpicked companies would be presenting on the main stage in the conference hall in front of 1,000 people while myself and 99 other startups pitched passersby in an open area called “The Launch Pad.” The first thing I noticed was how down to earth everybody was. I saw people who have created $100+ million companies listen carefully to new companies pitch their product in the demo pit and then give insightful feedback. There was a strong sense that everybody was here to see and support new startups even the ones that didn’t make it to the main stage.
If you did make it to the main stage you had an amazing opportunity to show off your company to a captive audience, but you would be trouble if you were not prepared. Some pitches went well, but many companies were in for tough criticism. For example one company spent the first forty five seconds explaining the product instead of showing it and that prompted Jason to pick up a mike and order them to “show the product. Don’t explain it, show it” 20 seconds later he interrupted their presentation and asked them to explain “what the company does, in English this time.” There were some more questions that were tough especially in front of a crowd of 1,000 people, but these things happen because Jason worked so hard and did such a fantastic job of putting together the event that he wanted everybody to be prepared to do their best.
On the other end of the spectrum some companies got on stage and had break-out moments. Green Goose is the company that seemed to get the most press. They didn’t get accepted to the onstage portion of the show initially, but they were plucked from the 100 demo pit companies and given the opportunity to present on stage because their product was so great. As a way to apologize for not letting them into the competition in the first place Jason arranged for $100K in investments to be made into the company on the spot and Green Goose raised a total of $500K at the event on the heels of their warm reception. More than anything else that showed what a great event the Launch Conference is. When a company can go from presenting alongside 99 others in a demo area to getting on the main stage and then raising half a million in two days, that speaks volumes about the quality of the conference.
Even if you didn’t get to go on the main stage there were still great benefits. Here’s my top 5:
- Great Advice – You will never be in a room with such highly concentrated talent in the web startup space and everybody is happy to openly share their advice. People who had raised millions in their own companies stopped by my booth, listened to my pitch and then gave me advice on how to be successful. That’s pretty impressive when you consider I’m just a young guy from the midwest who has no connections and has never even been to California before.
- Insider Information – Want to know how much it costs to hire an American design company to design a new website that needs dozens of pages? The companies I talked to were paying 15K-30K. Want to know the best country to outsource mundane tasks to? The Phillipines. English is popular there and a lot of other web companies have cut labor costs by more than 50% on tasks they didn’t even know they could outsource. Want to know why convertible notes have fallen out of favor as a financing method? (Sorry, you had to be there to know that one.) It was easy to pick up valuable tidbits just by asking people.
- Access to investors – Once you setup your booth in the demo area the unspoken rules of pitching quickly become apparent. If somebody is quickly walking by like they have a destination in mind you don’t bother them. If they are slowly ambling along as they look at the companies then by all means hit them with a one line opener like “Want to see a Groupon Killer?” or “Would you like to avoid lousy restaurants for the rest of your life?” If they like your opener they will listen to your pitch and if they like the pitch they will give you their business card and start to ask questions about how far along you are. I spoke to an investor from Kleiner Perkins who said he loved my idea, but since I had just launched I needed to show some traction and if I got that they would like to have serious talks with me. What’s traction? According to the dozen or so early stage investors I spoke with its getting 10-20K registered users when the growth is clearly picking up over time. If you can get that and you have a business model that makes sense and can clearly scale into a huge business a lot of investors are going to want to talk to you. I came away with about a dozen contacts who all encouraged me to reach out to them personally if I can show my business is starting to catch on.
- Learning how to pitch – You can find lots of great tips on other websites about how to pitch, but it won’t fully sink in until you see good pitches and bad pitches in person. In some of my first pitches I made the mistake of going on and on for 5-8 minutes about all the features of my site. I cured myself of that problem after listening to a woman pitch me on all the details of her business for 10 minutes. I was interested in what she was talking about for the first two minutes, then I started thinking about how I could politely leave for the next 8 because I didn’t want to hear every little detail. I also listened to a pitch where the entrepreneur pitched his company for 2 minutes and then asked for feedback and had a candid conversation with his audience about what to do with the business. I quickly decided I would do the same thing and I had a lot more fun and got a lot more out of the experience when I did a short pitch followed by a candid discussion.
- De-mystifying Silicon Valley – When you are used to working a regular job and you only read about all the innovation happening in Silicon Valley it’s easy to feel like everybody out there is smarter than you. Going to one of these events will quickly change your mind. First of all you will see that for all the innovation going on there is a pretty limited number of people making viable new companies and there is plenty of room for ambitious people to bring something new and different to the market. Second, if you are on FlyoverGeeks and you have read all the way down to this sentence I can guarantee you will not feel intellectually intimidated once you start talking to people. Some of the people you meet will be further along in your careers, but you won’t feel stupid in this group. Like me you will probably come away more confident in yourself when you get a first-hand glimpse of all the people you read about in Techcrunch and Mashable.
In 2009 a company called Red Beacon won the predecessor to the Launch Conference – it was previously known as TechCrunch 50. The CEO of that company had worked at Google and McKinsey, had an MBA with honors from Harvard and had graduated Magna Cum Laude from Duke when he completed his undergraduate degree. His team was top notch and the company was created to help people hire local service providers. They went on to raise 7.4 million from investors to grow the company.
After Red Beacon’s success, a fresh graduate with virtually no work experience named Marco Zappocosta started a company named thumbtack with some of his friend to address the same challenge of helping people hire local service providers. It sounds like a recipe for disaster for the unproven youngsters, but today after 2 years of competition Thumbtack is doing fantastic and Red Beacon is a joke. A quick look at compete will show you that Red Beacon is getting about 20K uniques per month and traffic growth has been flat for 2 years. Thumbtack is getting 175K uniques per month and has grown its traffic every month for over a year.
The lesson is that meeting insiders and getting recognition from them is nice, but it doesn’t always lead to success. Fancy degrees, high grades and impressive resumes are also nice but the only thing that leads to success is building great products that people want to use. Nobody understands that better than Marco so I walked over to his booth, introduced myself and asked him “How are you kicking Red Beacon’s ass so badly?” He smiled and explained exactly why they had been so successful while his competition has only succeeded in flushing millions of dollars down the toilet.
Many thanks to Jason Calacanis for putting on a great show. The whole conference was top notch.
Justin Baker is the founder and CEO of MyPersonalShopper. It’s a new site that creates a personalized store for users to show them sales, promo codes, daily deals etc. on the things they love from the big brand stores they trust. You can contact him at justin (at) mypersonalshopper (dot) com