Posted by: David Croslin
angels, Funding, innovation, invention, Startups, Venture Capital
I have talked to thousands of startups over the last 15 years. And most of them make mistakes that dramatically limit their overall potential for success. An unbelievably small fraction of startups succeed and there are good reasons why.
“Referrals” is one of those topics that normally ticks me off pretty bad. People constantly email me and ask me to send them a list of contact names so that they can get funding or find a partner or get a customer. Sometimes the startup tries to minimize it by asking for ‘just a few’.
I know a lot of people. Those people know a lot more people. My personal Rolodex has over 6K names in it of people that I have dealt with in some way or I have met over my career. I know a large number of executives at very big companies. These are great people to know. And most of the time they will take my call or respond to my email quickly. They are contacts, acquaintances, business associates, friends, etc. No matter what you want to call them they are professionals and I treat them like professionals and I never waste their time.
Why will my contacts take my call? Because they know I am calling because I have something I have reviewed and that I think they will want to know about. I never contact them unless I am ready to lay out the startup or company in under 3 minutes. I can define exactly how they will benefit and I have materials prepped and ready to forward to them or their team to back up what I say.
So, if I have this great Rolodex of names, why aren’t I willing to just share a few with someone I know nothing about? Hmmm. Seems kind of obvious to me and you wouldn’t think this would be an issue.
Here are a couple of reasons I don’t share:
1) Startups often contact me and can’t tell me what they want. They tell me they need help but can’t specify what help other than “I need money”. If they can’t tell me what they need do I think they can tell my contact? No.
2) Startups contact me and can’t articulate what their company does in a paragraph or two or tell it to me in under 3 minutes. And they can’t tell me how they would be valuable to a potential partner. And they can’t lay out their plan for making their potential partner money. So, do I think they can sell themselves to my contact? No.
3) Startups contact me about an ‘idea’ they have. They can’t tell me how they plan to protect it. They can’t tell me how they would eliminate competition. They can’t tell me who their potential competitors are. Do I think they will be able to answer the same questions when my contact asks? No.
4) Startups contact me and within the first email ask me to send them some contacts. They genuinely seem to look at me like a phone book. Do I think they respect my contacts, my reputation, my experience and my time? No.
Like I said, this topic ticks me off.
Why don’t I share some contacts with strangers I am not in business with? Because if I did I wouldn’t have any contacts to share.
This is #2 in a series of 50 mistakes that startups make.
I am looking for a company that I can work with on their road to success.
I am the former Chief Technologist at Hewlett-Packard and the Chief Product Architect at Verizon. I hold 25 granted patents that are referenced by over 400 other patents. I have started five companies and driven them to success. I have two startups in stealth. I was on the M&A committees at HP and Verizon.
Drop me a note or connect with me: email@example.com