Campus - 07.08.2013 - 00:00 

25 tips for startups (part 2 of 2)

San Francisco is the place to be for every entrepreneur. It’s the cradle of entrepreneurship as we know it today and the birthplace of Internet giants such as Apple, Twitter and Facebook. It’s the place where everything is possible as long as you have a good idea. Here is some advice from our student Laura Behrens Wu.


12 August 2013. San Francisco is the place where I’m spending the summer of 2013 to find investors for my own idea. My time here has been an incredible learning experience that is worth sharing with everybody interested in the American way of startup business. This is the second part of my article.

  1. You must be able to pitch your startup in just one sentence.
    The attention span of many people you meet will be very short. Don’t start explaining your startup and continue going for the next five minutes. The first sentence you say about your startup should be compelling enough to keep the person you are talking to interested. Of course, one sentence will not be enough to explain every detail of your business. That’s why you should say something abstract that is concrete enough to provoke people asking questions. You can then use their questions to explain the details. Don’t anticipate their questions and answer them in advance. If you need more than one or two sentences to explain your startup, you will have lost them. Answering their questions only when they ask them will guarantee that they are listening.

  2. Get traction.
    Show month over month growth. Nothing is more appealing to investors than steady month over month growth. The likelihood of receiving investment is much higher if you’re able to show off these growth numbers. A startup is not about revenue but all about growth!

  3. There are two points of time to fundraise:
    either at the very beginning, when you have nothing but a vision or when you’re hitting significant growth rates. Everything in the middle is dead land. You can convince a business angel with your amazing idea and your personality or you can convince him with solid and undeniable growth numbers. Don’t get in touch with investors if you have started already but don’t show growth; that is not the stage they want to be a part of. This advice is somewhat contrary to the last point but receiving contrary advice is also something that happens all the time.

  4. Know your customers.
    You might think you know them, but you don’t unless you’re talking to them all the time. All your assumptions about them, no matter how sophisticated they might be, could be proven wrong by a simple customer interview. You should take your time to talk to as many customers as you can to understand their motivation to use your product and the troubles they are experiencing. Investors will want to know what your customer profile looks like and how you derived these assumptions. You better be able to tell them that these are actual customer quotes and not just what you imagine them to say.

  5. Buy a dotcom domain.
    Don’t try to use any other domain but dotcom!

  6. The name.
    To get started you can simply choose any name because you need to buy a domain and print business cards etc. But make sure to take enough time to rethink your name before you go live. Also, talk to native speakers before deciding on a final name. A catchy name can be critical to be remembered by customers.

  7. Americans are enthusiastic. That’s why you should be enthusiastic as well.
    Show your passion! Smile! Exaggerate! That ties a little bit in with my previous point about being confident but it goes more in the direction of displaying the American mentality while talking to fellow entrepreneurs and investors. Europeans can be quite unemotional when talking about business. Here, in the States, you should show how much you love what you are doing, how happy it makes you and how much you believe in it. Use words such as “awesome, incredible, amazing and unbelievable” to make your point. Show them how much you love what you are doing and that you are 100% committed!

  8. Why are you the right person?
    Why you and not any other entrepreneur in San Francisco? Why are you and your co-founders the best people to build up the startup? If a team is convincing, the idea becomes secondary. You must be able to make a good argument on why you are the best guys for the job. What kind of special expertise do you have that others don’t? Why is the combination of you as co-founder the perfect one to tackle these problems? Why is your experience useful in the startup you are building? The people you are talking to need to buy in to you as a team in addition to the idea you’re selling to them.

  9. Think about the exit!
    I have been asked this a couple of times: “So, what’s the exit strategy?” This question has been asked even before incorporating the startup and you should have a good answer to that. It is useful to look at comparable startups, and what their exit strategy was and for what price. Investors earn from their investment if the company goes public or if the company achieves an exit. That’s why you should have an exit strategy even before you incorporate. By “strategy” I don’t mean a written plan, but a good reply if investors pose the question.

  10. Start in a niche.
    You shouldn’t believe that your company could enter the mass market right away. Choose a small niche, be it a customer segment or a city, and begin there. At the beginning Facebook was only available to Harvard students. Then they opened up for other Ivy Leagues before they allowed everybody in. You should try to cement yourself within a small niche instead of going too big too fast.

  11. If you don’t have a track record, get some advisors.
    First time entrepreneurs don’t have a proven track record to impress people. If you’re not a serial entrepreneur you should find people that are and convince them to be on your board of advisors. If investors see that these people are willing to advise you, they will look twice. When searching for advisors, you should talk to the entrepreneurs who have already successfully scaled a company or exited one. Give them a very small stake of your company in exchange for monthly advice and list them on your homepage and pitch deck as being part of your board of advisors.

  12. Be just the right amount of informal.
    In San Francisco nobody wears a suit in startups, not even for investor meetings! You can address everybody with his or her first name, even investors.

  13. The mentality here is that “you can achieve everything if you work hard enough. If it didn’t work out, you did not work hard enough.”
    This is a real quote. At the same time failure is not regarded as anything bad. It is even considered a valuable lesson to have a startup that failed. Therefore, don’t be afraid to fail!

Laura Behrens Wu has studied at the University of St. Gallen and Harvard College. She is just about to finish her graduate degree and spent her summer in San Francisco to learn from LendUp, a YCombinator company, and to fundraise for her own startup, Popout. Popout is a curated e-commerce store that sells products with a story and it just launched its referral system.

picture: emmanutella /

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