Even if you don’t need to raise money, or if you know you probably aren’t fundable, you should probably get in the habit of hanging out with and pitching VCs regularly. Why?
Because VCs have more meta-data about who is doing what than any one else in the business world. They are on the front line of all the emerging technologies, the best new ideas, and they know hundreds and hundreds of entrepreneurs and funded companies.
I blogged last month about the phenomenal meeting that David Bradford and I had with Tim Draper of Draper, Fisher, Jurvetson, where he gave us a HUGE idea for FundingUniverse.com. That has started the ball rolling and our team is mobilizing around his idea.
Yesterday one of our teams had a meeting with a very successful VC who shared some excellent wisdom with us. Here are some tidbits:
He asked, “Who are you going to sell the company to?” We didn’t have a good answer. He said, “I never start a company without knowing who is going to buy it. And then I run the company with the intention of not selling to them, otherwise we stop focusing on our customer.”
“Laser focus on your customer and serve their needs. If you don’t know who is going to buy you, then you don’t understand your customer.”
“Who is your customer? How many have you talked to? What are the top 3 features they want?”
“Focus groups are a complete waste of time. They have made more companies go out of business … if you get the wrong panel, you won’t solve the right problems.”
Build a panel of customers from the kind of people that always say they knew what was coming. Nail the panel. Have them tell you what is coming and then work back from there.”
Must read book: “Getting It Right The First Time” by Internet Research Group
Our venture friend also told us about a great new technology that might fit into what we are doing.
So bottom line was we got feedback on our business, our team, potential partners, and some pointed questions that will force us to better define our customers, systematically talk with more of them, and think about our exit and who will want to buy us as we meet our customers needs.
So when is the last time you pitched a VC? What is stopping you from trying that right now? Make some phone calls. Use LinkedIn. Get introduced. Try your pitch and see what you can learn.