For whatever reason, this week the workshops focused largely on enterprise-oriented companies, and the Founder Stories happened to come from two people involved with an enterprise-focused company. From a general standpoint, this week has been about growth. Companies are spending a lot of time working out their strategy for the next 6-12 months, and which direction they will head after Techstars.
A lot of that strategy is based upon customer feedback, and there has been a big push lately to acquire customers and prioritize product features. The next several weeks will be the last push before Demo Day preparation begins, and all companies want to make sure they position themselves well.
Applying for an SBIR (Small Business Innovation Research)
This workshop was focused on what the SBIR program is, and how it can benefit companies who are building technology that could be applicable for government (it's a lot more than you think - the US government is big!).
More details about the program, application process, statistics, and more can be found at their website, but here are the highlights:
- The US government buys A LOT OF THINGS.
- There is lots of grant money available, SBIR is just one (SBIR, STTR, BAAs, etc.).
- The government can't distribute IP inside government for 5 years*, and IP issues are nearly unheard of.
- There are matching government funds available for outside investments (see FastTrack and Phase 2 Plus programs).
- Company must be 51% owned by US citizens, have less than 500 people, and less than $50M in revenue.
- The 51% ownership CAN be by a US entity - check details on their website.
- There are generally 2x the companies accepted into Phase 1 who go on to Phase 2.
- Check the 'Resources' tab on the SBIR website for lots of different statistics and tools.
- Put aside one week to write your first proposal.
- Call the person who put forth the topic you are applying for, and after describing your product/company, ask them if they would 'encourage' or 'discourage' you to make a proposal - this will save you time and give you some indication how likely your company is to receive a grant.
*Disclaimer: this entire section is based on my notes, which may or may not be correct - research this in detail for yourself.
Landing a Large Pilot Customer (Enterprise)
One of the biggest knocks on enterprise-focused startups is that typically getting an enterprise client to sign as a customer is tough, and a long process, and generally the bigger the client, the longer the process. This workshop was focused on a process for acquiring those clients reliably, as quickly as possible (which is still slow by consumer standards).
- When dealing with enterprise, you are initially shooting to get any 3 of: references, case studies, and proof points. Revenue is a bonus.
- Your first 'Design Project' should produce: product and pricing, a customer reference, proof points (success metrics) and a case study.
- The process: start in their heads, then capture curiosity > get time > get ideas > build into product.
- You must close these customers incrementally, generally with the following steps:
- 1. Design Partnership, 2. Workshop, 3. Project Proposal.
- A workshop is structured to learn from them and get information.
- You should initially target low hanging fruit who represent target market.
- Take people out for food - there is evidence that forms a 'bond' psychologically (good date advice too...).
- Try to avoid exclusivity; you can offer a unique benefit for them instead. You will likely receive pushback on this point, but it's important, unless there is a scenario where you might have to choose, for example, between two people who dominate a market (Pepsi vs. Coke, etc.).
- Always be candid with your customers; trust is much more valuable than a perfect picture.
- At the end of the Workshop, agree upon a schedule for presenting the Project Proposal. Goal is not to have a solution for the project.
- Can you find one person who has a relationship with all the whales (aka. massive clients you're targeting)?
- Six months is a good target for signing a big client.
The most valuable part of this presentation? Process. This whole process can be refined and repeated, and you can use it to train your new enterprise sales teams, and scale those teams.
This week's Founder Stories, as usual, were moving, and diverse. The variance in backgrounds between founders, who appear similar in the context that I've known them (starting companies) is amazing. That being said, there are distinct similarities that exist between some founders. I'm starting to think there are a couple different founder profiles, which maybe I'll elaborate on in the future.
The takeaways for me this week:
- As a new founder, you will always be naive (ie. you'll look back and think you were an idiot in the context of being an entrepreneur; I've already had this happen to me).
- Communication between founders is so important.
- Keeping your big dreams, no matter how far-fetched, is always good. And your current business may not have anything to do with those goals.
- Grandparents are valuable - try and get their stories from them when you can (I can also attest to this, having only one remaining grandparent).
- Play the hand you're dealt.
- While a cliché, this summarizes something most founders have faced - adversity. In this case, it was more than most people will ever experience.
- You choose your own path - your upbringing and inherent characteristics have some play in who you are, but ultimately you decide.
- Side projects often become the best companies (particularly if started out of interest and/or passion).
Until next week!