I'm Brett Slatkin and this is where I write about programming and related topics. You can contact me here or view my projects.

12 February 2013

Double your valuation

You can have the most leverage raising money for your startup if you have data to support your idea.

Raising money is complex. I hear a lot about the importance of elevator pitches and celebrity incubators. But in your pitch deck, you should just answer these questions:
  • How many people would want to use what you're building?
  • What would they pay for it?
  • When would they use your app/site/service?
  • Why do they think they want it?
These are covered in presentations I've seen, but it's often handwaving, like: "Well, (other company) is an X-billion-dollar business; if we just got 1% of that then we'd be huge!"

You could answer these questions with a census: Ask everyone on the Internet yes or no and calculate your potential market size. But just as good, you can use statistical sampling (like Nate Silver). For example, here's a representative survey that shows 16% of people on the Internet have a personal website (US-only). Long-form content startups: Did you know that?

Data frames your opportunity. It puts a ceiling on your growth. It describes the challenge you're facing. It highlights how your target market is underserved. It identifies your initial customers. If you're pitching a startup today, please have data to back up your idea!

Without data you only have your wits. With data you have the truth.
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