Demo days are wearing out the entrepreneurial ecosystem
Demo days are traditionally a startup’s biggest milestone, a day prepared for after months of sacrifice and sleepless nights. On demo day, a startup is on stage in the bright light, unveiling their baby to potential investors, hoping their newborn will take its first steps toward making them proud parents. But the world of demo days has exploded, leading to fatigue in the startup ecosystem, wherein rather than leading up to a big day where the industry takes pause to peruse the new class of incoming innovators, there are so many demo days that they are becoming more like an exhausting train of events startups frequent, with even more exhausted investors.
Memphis-based venture development organization Start Co’s Co-president Eric Mathews is witnessing this fatigue first hand, noting that investors are being asked to participate in several dozen demo days each year, resulting the pipeline of quality deals flattening out, they’re being asked to view an increasing number of pitches, and founders expect visibility with serious investors which are becoming harder to source.
Mathews said, “Accelerators — the model of building startups quickly with concentrated resources and time — by most standards are still young, less than three years old with TechStars and Y-Combinator as early leaders before that. Demo Days at the end of accelerators started out as a way to match founders and investors efficiently, now must evolve or face losing value for both groups.”
Five ways the ecosystem is being burned out
Below are five of Mathews’ observations about why entrepreneurial ecosystems, not just investors, are experiencing demo day fatigue:
- Quantity not quality. Accelerators have grown into the hundreds nationwide, but the number of investors is about the same. Investors are burned out—for example, here in Tennessee most won’t even drive two hours to see teams, despite the option of having at least 10 Demo Days in-state each year. The net-net is that the quantity of Demo Days continues to increase, but the quality of the deals has not.
- Focus on idea-stage entrepreneurs. Any startup can make a polished pitch deck in 90 days, but practically none can go from back-of-napkin to investable in 90 days. Thus, Demo Days occur prematurely in the lifecycle of idea stage startups. Most startups aren’t prepared for meaningful investment discussions until at least six months after they start an accelerator, if that.
- Demo Days are about hype. Accelerator operators are in a Demo Day “arms race” with their Hollywood-quality production, signature drinks, parties, and after parties to “attract” attention from a dwindling investor audience. Investors now ignore the hype waiting to see if a founding team has the grit to last three to nine months after Demo Day before making a commitment to invest.
- Investors want to know the team. Repeated exposure to founders throughout the acceleration process is what keeps investors interested. That way, they can see the progress as it unfolds and therefore reduce risk. As a result of this shift, investors are now participating as mentors more and more before and after Demo Days – and with the ongoing mentoring relationship in place investors are skipping Demo Days all together.
- Demo Day isn’t the goal. Building a business, not Demo Day, is the goal of an accelerator. Demo Days shift the focus away from what is really important: building a successful business.
How demo days can evolve, improve
Mathews notes that accelerators should have culminating experiences at various milestones, and demo days should be one of those experiences, rather than the end result.
In Mathews’ words, below are several ways demo days can add value rather than fatigue:
- Change the name. Most startups aren’t ready for serious investment at this stage, so we shouldn’t call them investor days. Think of launching, engaging and activating around the accelerator. If you come up with a better name than Demo Day email or comment below.
- Change the focus. Demo Days are really for the ecosystems around the startups, not just for the startups. The event should be a place for service providers, supporters, prior and new investors, mentors, interested parties, and friends and family to experience the entrepreneurial culture, understand the milestone the founders have achieved, and understand the next stops on their journey.
- It’s the start, not finish, line. The event should be about showcasing the teams and allowing them to get feedback so they can strengthen their business offering. The experience will be one of many stops on the long journey for the founders to grow and refine their product or service offering.
- Tap into alumni networks. With most accelerators completing their 2nd and 3rd cohorts this year, those who previously went through the program can be role models and remind founders that hard work and persistence can result in success, but also note that failures are often part of the journey. These alumni/founder connections can lead to mentor relationships as well as job matching in the future.
- Accelerate community activation. For Demo Days that are happening in the fly over-zone of the United States (which is a lot of them) where investor concentrations are lower, they can be helpful to activate the community, recruit more talent and mentors, and help uncover more resources. Think of ways to engage these groups and include programmatic elements for them.
- Cull the herd. Demo events can serve as a method to concentrate an accelerator’s limited resources on the founders that are ready to take the next entrepreneurial steps on their journey. Conversely, those that are off track can be guided back to the drawing board or take a different path without using up post-accelerator support resources wastefully.
PopCom designs smart vending machines to automate regulated products
(BUSINESS ENTREPRENEUR) PopCom raises $1.3 million in equity crowd funding to launch smart vending machines that will securely sell regulated products like cannabis and alcohol.
Dawn Dickson is upgrading the beloved vending machine to thrive in the era of COVID-19. Dickson is the Founder & CEO of PopCom, a black-owned retail technology company whose mission is to “equip entrepreneurs and brands with future-ready retail solutions that allow rapid retail expansion, incredible customer experiences, and powerful sales data.”
Dickson started her entrepreneurial career with Flat Out Heels, rollable flat shoes that fit in a purse. The business was an e-commerce hit, relying on online data analytics to drive sales and growth. She found there was a disconnect in leveraging that technology when she looked for traditional vending machines to sell her products in places with high foot traffic like airports. Like any good entrepreneur, she created her own solution to the problem.
PopCom vending machines use facial detection and machine learning to create an interactive and intelligent retail experience. In 2020, the Columbus, Ohio based company is rolling out secure pilots for automated vending of regulated products like alcohol and cannabis. The machines rely on biometric analysis to verify identity, and can even anonymously evaluate age, gender, and emotional sentiment while a customer is browsing to convert sales. Products can therefore be available on demand with minimal human interaction.
The growth of this technology is timely as COVID-19 continues to ravage retail in the United States. “Vending machines and convenience services are becoming more essential, and retailers are looking for more ways to deliver their products direct-to-customer with less human friction. We are excited about what is to come,” Dickson told BlackNews.com.
And what is to come is coming quickly. Dickson just completed a record-setting equity crowdfunding campaign on Start Engine, being the first female founder in history to raise $1.3 million in just 47 days! Previously, PopCom raised an initial $1.07 million from their first campaign. According to SEC regulations, companies can raise up to $1.07 million from regulation crowd funding sources in a 12-month period.
How to choose the right software for your business
(BUSINESS ENTREPRENEUR) What are the best software options for your company? Well, we have a list of suggestions and questions to help you determine what is best for you.
It’s almost impossible to run a successful modern business without some kind of software to help you stay productive and operate efficiently. There are millions of companies and even more independent developers working hard to produce new software products and services for the businesses of the world, so to say that choosing the right software is intimidating is putting it lightly.
Fortunately, your decisions will become much easier with a handful of decision-making rubrics.
Determining Your Core Needs
First, you need to decide which types of software you really need. For most businesses, these are the most fundamental categories:
- Proposal software. Customer acquisition starts and ends with effective proposals, which is why you need proposal software that helps you create, send, and track the status of your sales documents.
- Lead generation and sales. You’ll also want the support of lead generation and sales software, including customer relationship management (CRM) platforms. These help you identify and track prospects throughout the sales process.
- Marketing and advertising. Marketing and advertising platforms help you plan and implement your campaigns, but even more importantly—they help you track your results.
- Finance and accounting. With finance and accounting software, you’ll track accounts payable and receivable, and countless variables influencing the financial health of your company.
- Supply chain and logistics. Certain types of businesses require support when it comes to supply chain management and logistics—and software can help.
- Productivity and tracking. Some software products, including time trackers and project management platforms, focus on improving productivity and tracking employee actions.
- Comprehensive analytics. Enterprise resource planning (ERP) software and other “big picture” software products attempt to provide you with comprehensive analytics related to your business’s performance.
Key Factors to Consider
From there, you’ll need to choose a software product in each necessary category—or try to find one that covers all categories simultaneously. When reviewing the thousands (if not millions) of viable options, keep these factors in mind:
- Core features/functionality. Similar products in a given niche can have radically different sets of features. It’s tempting to go with the most robust product in all cases, but superfluous features and functionality can present their own kind of problem.
- Integrations. If you use a number of different software products, you’ll need some way to get them to work together. Prioritize products that make it easy to integrate with others—especially ones you’re already using.
- Intuitiveness/learnability. Software should be intuitive and easy to learn. Not only will this cut down on the amount of training and education you have to provide employees, but it will also reduce the possibilities of platform misuse in the future.
- Customizability/flexibility. Out-of-the-box software products work well for many customers, but they may not suit your current or future needs precisely. Platforms with greater customizability and flexibility are favorable.
- Security. If you’re handling sensitive data (and most businesses will be), it’s vital to have a software developed with security in mind. There should be multiple layers of security in place, and ample settings for you to tightly control accessibility.
- Ongoing developer support. Your chosen software might be impressive today, but how is it going to look in three years? It’s ideal to choose a product that features ongoing developer support, with the potential for more features and better functionality in the near and distant future.
- Customer support. If you have an issue with the app, will someone be available to help you? Good customer service can elevate the value of otherwise average apps.
- Price. Finally, you’ll need to consider price. The best apps will often have a price that matches their quality; it’s up to you to decide whether the extra expense is worth it.
Read about each product as you conduct your research, and pay close attention to reviews and testimonials from past customers. Additionally, most software companies are happy to offer free demos and trials, so you can get some firsthand experience before finalizing your decision. Take them up on the offer.
Finding the Balance
It may seem like purchasing or subscribing to new software products will always improve your business fundamentals, but this isn’t always the case. If you become bogged down with too many apps and services, it’s going to make operations more confusing for your staff, decrease consistency, and drain your budget dry at the same time. Instead, try to keep your systems as simplified and straightforward as possible, while still getting all the services you need.
You won’t find or implement the perfect suite of software products for your business overnight. It’s going to take weeks, if not months of research, free trials, and in-house experiments. Remain patient, and don’t be afraid to cut your losses on products that aren’t working the way you originally intended.
‘Small’ business was once a stigma, but is now a growing point of pride
(BUSINESS ENTREPRENEUR) Small businesses make up the majority of companies, employers, and money makers of the American economy, that’s something to be proud of.
Prior to the Industrial Revolution, all businesses were small businesses. Independent craftsmen served communities with vital services. Small merchants opened shops to provide the community with goods. Lawyers, doctors, and other professionals hung out a shingle to offer their services to neighbors. Small businesses were the norm. Some of the most beloved American companies started out local. John Deere, Harley Davidson, and King Arthur Flour, all got their start as small businesses.
Business changes led to a attitude change
It wasn’t until manufacturing allowed businesses to scale and produce more efficiently that the idea of big business became more important. Post-World War II, the idea of a small business became derogatory. It was the age of big government. Media was growing. Everyone wanted to be on top. Small businesses took a back seat as people moved from rural to urban communities. Small business growth plateaued for a number of years in the mid-20th century. Fortunately, the stigma of small business is fading.
Small businesses are the backbone of the economy
According to the Small Business & Entrepreneurship Council, the “American business is overwhelmingly small business.” In 2016, 99.7% of firms in American had fewer than 500 workers. Firms with 20 workers or less accounted for 89.0% of the 5.6 million employer firms. The SBE also reports that “Small businesses accounted for 61.8% of net new jobs from the first quarter of 1993 until the third quarter of 2016.” Small businesses account for a huge portion of innovation and growth in today’s economy.
Modern consumers support small businesses
According to a Guidant Financial survey, the most common reason for opening a small business is to be your own boss. Small business owners are also dissatisfied with corporate America. Consumers also want to support small businesses. SCORE reports that 91% of Americans patronize a small business at least once a week. Almost half of Americans (47%) frequent small businesses 2 to 4 times a week.
Be proud of small business status
Small businesses are the innovators of tomorrow. Your neighbors want to support small businesses, knowing that their tax dollars stay in the community, and that they’re creating opportunities within their own city. Your small business status isn’t a slight. It’s a source of pride in today’s economy. Celebrate the fact that you’ve stepped out on your own in uncertain times. Celebrate the dirt under your fingernails, literally, or figuratively, that made you take a risk to do what mattered to you.
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Ladies and gentlemen, the U.S. National Anthem
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