I think we're all on a bit of a high after the incredible success of Start-Up Alley's first year at Solar Power International. I've thanked the judges, start-ups, and the folks over at SETS myself privately via email, so please take this as my public thanks for all of the contributed time, energy, and money that made it a success.
In the few days since we all returned home, and in letting the experience mentally process, there were a number of clear lessons, not just for ModSolar as a company and myself personally, but also for the start-ups who were there, those who won and those who didn't. I thought it was important to get some reflections down so others could see the thought process and learn from what we all experienced.
What was the most interesting to me was how the judges' questions often contained hard-won lessons from their own experience. That was the value the judges brought. I happily spent a lot of time with some of the start-ups that came to me for advice. Their questions often reminded me of lessons I’ve learned along the way—lessons that I always benefit from being reminded of. Here's a quick summary in no particular order, for whatever value there may be:
Be open to new opportunities, always
This sounds like a no-brainer, right? But many start-ups, especially in a competition, feel like they need to have it all figured out. The answer? You don't. You may think you have a great solution to a thorny problem, but just listen to your potential customers, and a better business model—one that will give you greater success—might just fall in your lap. ModSolar made this mistake late last year (more on this in a future post), and we're still cleaning up from it now.
The bottom line is that trade shows are all about seeing what can happen. Be out there, be honest, be optimistic—and who knows? That potential product you discuss on the show floor today could add $1mm to your bottom line tomorrow.
Ok, again that sounds like a no-brainer. But one of the start-ups in the finalists competition had something in their presentation that didn't mesh with the rest, and one of the judges leaned over to me and said "What was that part about?" and I quickly said, "Ignore it, focus on the core."
After speaking with the start-up, the reason why they added that little extra part was because they thought their revenue couldn't scale, so they were getting into something ancillary because the revenue over there was better than what they currently saw.
But the flaw here was just that — they were comparing it to current revenue. The whole point was that their revenue from their one core offering in 12 months could be 5X what it is today. Again, from their core offering! Entrepreneurs can be impatient by nature-- trust me, I know. But sometimes, a little patience and focus actually gets you to that tipping point faster.
So the lesson here is to stay focused. When you feel like you've run out of customers on your core product, or at least have an organization that can keep it running for you, then it's time to diversify.
Follow up, follow up, follow up
It's 9pm on the Sunday night after the show (ET). The only reason I'm writing a blog post now is because I spent 4 hours on Friday on the way back, three hours yesterday (during my kids naptime), and another four hours today (again, naptime) doing follow up with all of the folks I either met with, missed, or new folks I met at the show. My calendar is already mostly filled for next week with meetings with new business, or business I pushed forward because of the show. How much closer am I to my goal of selling more licenses because of this quick follow up?
For those folks in start-ups that are responsible for sales and reading this post, follow-up, quickly, is critical. Remember, you're always fighting for attention. People meet dozens, yes dozens, of folks at shows. Beating others to the punch for their mindshare when you want something from them has no downside. Do it, and do it quickly!
Leverage the work (and reputation) of others
One of the competing companies had what looked to be a revolutionary process. But when they tested it, they chose to test it themselves with their customers, instead of going for industry-accepted testing practices and laboratories. When asked why during the competition, they said, "That's what our customers asked for."
This may seem to make sense on the surface, but digging deeper there's a critical mistake here. This brings up the topic of early adopters.
Basically, any product can find early adopters. There are just people out there that are open to trying just about anything if it solves a problem they have. Early adopters, by their nature, are optimistic people and understand that product development can be messy. They do it because if you become successful, they like to be able to say, "I knew this product back when..." We certainly have our share of those at ModSolar, and they have played a pivotal role in helping us to mature our Platform.
So if you're a start-up and your early adopter customers are telling you that testing at their facility is fine, then, that's okay. You know what you do? Design the test you'll do with them and then take that same test and pay an independent lab to do the same test. And if you're lucky, you can charge the early adopter for both tests! There is no more perfect solution.
Why do this with the early customer if they're satisfied with just the less formal test? Two reasons: First, the early adopter may not need the independent test, but the second mover who will buy your product, after it's successful, certainly will. Generally, they won't buy without it. Second, if a superior of your early adopter comes calling and asks their junior person why they bought a product without independent testing, then both of you are covered, and a very important contract to you was just saved. It's called "de-risking your operating model."
Each of these 4 lessons I observed in Start-Up Alley relate to a specific start-up alley finalist. Since I haven't asked them if it was ok to share these lessons, I've decided to omit their names for now. Can you guess which finalists may have learned which lesson at #SPISUA13?