I spent this afternoon at the Louisville Venture Club, listening to several presentations by local entrepreneurs. Usually, they suck. They get coaching, and they still suck. I'm not criticizing the mis-spoken words, quick pace, and awkward pauses that come from being nervous. That is to be expected if you are asking for a couple of million dollars so that you can keep growing your business. But often, these companies have mistakes in their slideshow presentations, or more often, basic mistakes in the analysis of their business opportunity that make me wonder if they have ever heard of "economics". You already know I'm not a big fan of chinese math. I also hate the "we have no competition" line, and the "this is the next big thing" argument. Business is hard. New business is even harder. Don't tell me how easy it will be. Acknowledge that it is hard, but tell me why you have a shot in hell of making it.
Well today one of the companies that presented was RentalHouses.com. They rocked. They nailed their presentation. They knew exactly what they wanted to get out of their 5 minutes in front of the group, so I want to share with you a few things they did right because, like I said, they were awesome.
First of all, the company was prepared. The slides were clear and direct, and the presenter spoke clearly and to the point. The thing that impressed me early in their presentation was that they got around the chinese math. The company focuses on rental properties that are not major apartment complexes. They focus on houses, duplexes, and condos. After covering the market statistics, they didn't say what most people would say "there are 3.2 million units, so if we just get X percent of that, we will make all our investors rich." Instead, they gave a real reason to believe that this market is underpenetrated. The key statistic – 95% of large apartment complexes list their vacancies online. The other key statistic – 3% of "single unit owners" list online. That means something. They found a statistic that provides some real perspective on what they can expect in their market. Now, maybe SUOs will never hit a 95% online listing rate, but I feel confident that it will be more than 3%. Obviously online listings work, or major apartment complexes would have given that up by now. It is a real reason to believe in their numbers, and it shows they have done research and know their market well. This is a perfect example of how you get around Chinese math. You give investors a real reason to believe that your numbers matter, by finding a reasonably comparable statistic.
The next thing they did right – they talked about their competition. There wasn't any of this "we have no competition" crap. (When I hear that, I like to go home and do a quick search for the product/service. If I can find competitors on the first page, I know a company hasn't done their homework) RentalHouses.com discussed their competition in detail. They talked about how many listings their competitors had, what they charged, how they planned to differentiate themselves, and why they think they will win in the long run. It was very refreshing. It gave them a lot of credibility in my mind.
Finally, they were crystal clear about what they were looking for in terms of investment. They wanted a certain amount, from a certain type of investor, and they knew what they would do with the money. They didn't come across as "we'll take anything" like so many other startups.
So kudos to whoever put that presentation together, because they actually knew what the hell they were doing. With that kind of presentation, I doubt they have trouble finding investors. If you want to pitch your own business someday, take some lessons from this team. Be honest, be clear, acknowledge your competition, and avoid chinese math. Instead of the confusion perpetuated by so many entrepreneur pitches, this pitch made me believe that the company knew where they were going, and that they really could get their. Nice work.