Sunday, February 16, 2014

Why TED talks are killing European Disruptive Startups

So many pitches could be so much better!

Good, I have your attention.

Because I have spent several days since September last year sitting through various presentations by young startup companies, most of them tech.

Frankly, most of them were awful.

And I know that none of these teams have yet got funded for a seed round (which is pocket money to keep you going for a few months). Let alone a so-called "Series A".

In many cases, there is nothing wrong with the idea. The technology may be great. Far superior to anything I've seen in Silicon Valley. Their solution may have been validated by 10,000 people.

But the team has put no effort at all in building a story that I believe and trust.

After a particularly poor series of weak presentations this week I asked a few of the teams who had been their inspiration.

After prompting, a couple of them said they'd been told to watch TED talks and copy the format. The reasoning from their mentors was simple. "If such talks attract people willing to pay 6000 dollars to go to a TED conference, then it must work for European startups struggling to find investors".

Except it doesn't.

TED has built a very successful performance platform. It's a strict talk format of either 18, 5 or 3 minutes in front of a invited audience. And it's billed as a stage to "share ideas worth spreading".

And there are plenty of examples to show that it works. The TED blog is proud of its top-20 TED talks of all time, from among the sea of 6000 talks now posted online. There's no doubt that these talks are entertaining. They play with your emotion. Some even get you thinking.

  • Sir Ken Robinson says schools kill creativity (2006): 23,510,221 views
  • Jill Bolte Taylor‘s stroke of insight (2008): 14,343,197
  • Simon Sinek on how great leaders inspire action (2010): 14,228,854
  • Brene Brown talks about the power of vulnerability (2010): 12,703,623
  • Amy Cuddy on how your body language shapes who you are (2012): 12,682,694
  • Pranav Mistry on the thrilling potential of SixthSense (2009): 12,068,105
  • Tony Robbins asks why we do what we do (2006): 10,425,014
  • David Gallo‘s underwater astonishments (2007): 10,266,221
  • Mary Roach on 10 things you didn’t know about orgasm (2009): 9,435,954
  • Daniel Pink on the surprising science of motivation (2009): 9.176,053
  • Pattie Maes and Pranav Mistry demo SixthSense (2009): 8, 363,339
  • Dan Gilbert asks: Why are we happy? (2004): 7,788,151
  • Hans Rosling shows the best stats you’ve ever seen (2006): 7,685,726
  • Elizabeth Gilbert on nurturing your creative genius (2009): 7,593,076
  • Steve Jobs on how to live before you die (2005): 7,223,258
  • Susan Cain shares the power of introverts (2012): 6,807,240
  • Keith Barry does brain magic (2004): 6,371,778
  • David Blaine reveals how he held his breath for 17 minutes (2010): 6,359,084
  • Pamela Meyer on how to spot a liar (2010): 6,256,589
  • Arthur Benjamin does mathemagic (2005): 4,951,918

  • Except, that in the case of startups and their story, I believe it is really the wrong format. Because the audience of investors isn't interested in ideas worth spreading. They are looking for disruptive ideas worth doing. TED is a great festival of ideas. But it rarely leads to meaningful follow-up.

    Investors didn't come to see you for a TED Talk

    Startups that copy TED usually come up with a product pitch disguised in the form of an elaborate world-changing story. There's a beginning, middle and an end. Maybe even a "thank you for your attention" at the end.

    Very variable pitch qualities around Europe
    Let's face it, most events are using a beauty contest format. Each team gets between 5 and 8 minutes to present their company and then pitch for funding. Most want money, but they don't explain what they're going to do with the investor's loan. They don't explain what how they're going to build a relationship with customers or citizens. I was left with the impression that all the team needed was money. I have also seen very slick presentations which fall apart as soon as you start to do due diligence on the company story (Googling on my laptop while they're still pitching). In the end, it's all show, but no real substance.

    So what's the alternative?

    I've mentioned before that there is a path forward. As John Hagel III pointed out last year blogpost, the stories that young companies tell are ineffective. They should be open ended narratives, explaining why those investors in the audience should get involved.

    Instead, the pitches are often a boast that a particular team who have been working together for a couple of years are more than qualified to wipe away the competition. Infact the audience has no real proof of the team dynamics. And often the core story is wrapped up in wild claims and stats which can't be verified at the moment of delivery. I've come to a point where I immediately draw a red line through any company that claims they are working in a billion/trillion dollar market.

    How to Stand Out From The Crowd

    There are over 300 tech accelerators in the world, not to mention countless start-up prizes, conferences, competitions. So perhaps it is not surprising that many demo days are starting to look like the tired, endless talent shows that we see on European television.

    But just as interest in talent shows is waning, there's a danger that demo days need to develop as well. They are being trapped by their own routine. Yes, "demo day" is still important. But it needs to pivot itself. And I believe that the founders of the Lean Startup Movement believe change is now overdue.

    I have great respect for Steve Blank, especially the recent work he has done to take the Start-Up community to the next level with the US National Science Foundation. If you look at the Lean Start-Up Launchpad, or investigate the HUGE list of resources on his blog, you will discover that the conversation IS moving on.

    In the second part of the Forbes interview below Steve Blank says that he's concerned that not enough attention is being paid to the interaction between startup incubators/accelerators and investors. He points the finger firmly at "Demo Days". Most are too focussed on arranging the performance of a great pitch rather than assisting startups demonstrate to investors that they are really a viable company. There's a lot of shouting when information sharing is called for. And, in my experience, people never collaborate with those who raise their voice.

    Blank argues that instead of making a flashy demo pitch, companies need to show they have really built a match between what they make and what the customer needs. Startups need to explain why they started, what they built, what they found when they talked to customers, what they did as a result and where they are going. It's an open-ended company narrative not a finished, polished story. Only then can the audience of investors judge if the company in front of them has discovered a way forward.

    Call to Action:

    Blank says he is going to address the issue later this year. I'm not going to wait for that.

    So we've formed the Critical Distance "guild" of those who see a desperate need for change. We're a group of individuals actively helping startups in several European countries with a different approach to building a company narrative; one that gives the audience of investors what they're looking for.

    Who else wants to collaborate?  If you've made it as far as this, you're probably interested in doing something to improve our story-telling capabilities.

    Contact me (see the contact options in the right column of this blog). We need to fix this. Before the brilliant team's run out of patience. And money.

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