How Entrepreneurs Need to Learn to Sell

How Entrepreneurs Need to Learn to Sell

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The tech entrepreneur wakes up. It’s still dark outside. Cup of coffee and Marmite toast down the hatch, and it’s off to the office. An hour or two responding to email, a quick meeting with the business partner and software dev manager, then off to pitch to the suits from the VC company they’ve managed to get interested in funding them.

It goes well, but the VC guys are non-committal. Quick lunch, back to the office. By five its exhaustion time, but another hour or two trying work out how to get those invoices paid to be able to meet payroll in less than a week. Then it’s time to quickly check the tech news sites before heading home by way of the local Nando’s.

“Nooooooooo!”, a scream rings out. “Those guys got R25 million in funding? But everyone knows they have nothing – their tech is vapourware and PowerPoint. It’ll never work! How did THEY get funding? Anyone that knows about coding knows that our tech is awesome… at the last jQuery hackathon we were voted ‘Best Tech’!”

Missing the boat

This scenario is played out month in, month out in South Africa. We have some of the best programmers and technology developers in the world (we do, seriously!), and yet for far too many start-ups this story rings far too familiar.

So what’s not working? Why are these awesome technology entrepreneurs not finding their funding match made in heaven?

Mostly, it’s the communication gap.

Tech entrepreneurs in SA are often not terribly good at articulating their technology vision – and how it will be successfully commercialised. They may build great tech, but can they show it off in a way that makes investors (who are usually not technical at all) get it?

Is there a minimum viable product they can show? Is the revolutionary new product they’re showing potential investors complete and operating (even if it’s not yet very polished), or are they showing them a number of boxes containing rocket-science parts?

Selling to investors

An investor wants to see what you plan to sell, not what it will be made out of.

How does one articulate the value it will give the users? Is it palatable to the market in terms of usability, the technology adoption cycle, the cost? One day the startup will be selling a product, and the technology must be packaged as such for the potential investors to see.

Often we try to pitch an idea, when the investor wants to see a product.

Anything that is ahead of the market is hard to articulate. If the investors are not familiar with your line of thinking (and you can safely assume they’re not), then you need to take them on a journey to show them how it will be taken to market.

How? Well… the typical tech entrepreneur should not be too proud to ask for help. To articulate market positioning, to clearly and concisely express the customer demand the product would satisfy is a skill, requiring experience and training. There are people who do this for a living. There are also piles of information available from startup blogs and forums: there is a whole community to get advice from.

Matching VCs to start-ups

Arguably VCs and funders inSouth Africacould also meet tech developers halfway. Many in the funding community in our country follow a similar practice to Europe and theUS, where they expect the entrepreneur to come in, blaze away at them and leave them convinced. This is not terribly realistic in SA where the gap between technologists and marketers is still very wide.

Investors in SA do need to do an awful lot more work to pull out the gems. More often than not, they’ll need to see a good idea, see a good mind, a committed entrepreneur and the inklings of a great product, and then help the entrepreneur articulate this.

In the US a funder can be just that – a funder. In SA, they may need to also act as a midwife to help in the successful delivery of a new product.

Of course, entrepreneurs should not rely on investors to help them do their pitch. It is their idea, after all.

We also need to share more when there are fundraising successes, or when a funded company goes live. We need to bang our drums, make some noise. This needs to come from the funders and the entrepreneurs. We need more success stories, so that people can see that it’s worth taking the risks as a tech investor. Every successful entrepreneur builds another round of angel investors.

The start-up community needs to work more closely together – to share successes, to support each other. We must worry less about someone stealing that great idea (ideas are easy, it’s the execution that’s hard), and worry more about helping each other succeed.

Getting funding for your start-up is not a zero-sum game… for every winner, there can be another winner.

Wesley Lynch
Wesley Lynch is the founder and CEO of Realmdigital, a top South African e-business strategy and technology partner, specialising in Web, Social and Mobile platforms. As a technology entrepreneur, Wesley has over a decade of experience in the financial, business and software development industries. He is also the co-founder of MyTrueSpark which sees him regularly consulting with start-ups, Venture Capitalists and Angel Investors. Wesley has recently been recognised in the Old Mutual Entrepreneurship Guide as one of the 38 emerging South African tech entrepreneurs to watch.