Next Generation: Unveiling the Contenders (part two)

[00:00:04] Sloan: I'm gonna be honest and say I'm feeling a little bit nervous ahead of Rice going into it. I didn't know how big of a deal this competition was, but the caliber of the other companies that are represented is amazing.

[00:00:16] Shiv: And it's also about telling that story, right? Because we need to pitch it slightly differently to, to truly unlock or to really show people that we can unlock that level of market potential.

[00:00:24] Richard: It's one thing giving a 20-minute presentation that includes a lot of well thought financials. It's another thing trying to distill all of that down into just a minute or two.

[00:00:34] Shiv: And we're spending so many hours thinking about this and modeling things and estimating things and having to summarize all of those hours and hours of work into a couple minutes at most it needs to be very thoughtful and we're trying to be as thoughtful as possible.

[00:00:50] Andrea: Hi, and welcome to “This is Small Business: NEXT Generation” - a miniseries brought to you by Amazon, where we follow 4 student teams behind the scenes as they try to win the Rice Business Plan Competition. [00:01:00] You’ll hear all about their challenges, hopes, and fears as they prepare to pitch. And if you’re a This is Small Business listener, you know that I love pointing out all the key takeaways by the end of each episode and I’ll be doing the same here! I’m one of your hosts – Andrea Marquez.

[00:01:18] Mitch: And I'm your co-host, Mitch Gilbert, the CEO and co-founder of Oya femtech Apparel, and a former Rice Business Plan competitor.

[00:01:25] Andrea: So far, we’ve talked about the prize money AKA 350 thousand dollars at stake that could totally change the game for your business. No pressure.

[00:01:35] Mitch: And we also explain how the competition works. The competition gets a practice round on the first day where they get feedback from the judges and then they go through three rounds of pitching eliminations over the course of the next two days. No pressure again.

[00:01:48] Andrea: On our last episode we introduced you to two of our four teams, Unchained and Outmore Living and in this episode, we’ll be looking at our two other contenders: Active Surfaces and DIA. [00:02:00] But first I was curious to see what might turn some of the judges away from voting for our competitors. Because I think it’s equally important to know what not to do when you’re trying to get someone to invest in your business via pitching.

[00:02:15] Pilar: I think having a overall vision for your company and for a overall roadmap for your product is important. But what I, I don't expect you to spend too much time on is expansion, right? Sometimes you'll listen to a pitch and they're already sharing their plan to, you know, go global and we wanna do, you know, we wanna start here and then we're gonna go to this state and then this country.

And, and it's, it's great that they have that vision, but what we wanna see as investors and as judges is that you have a solid strategy early on to accomplish your goals in one, you know, specific area and then expand as it makes sense and, [00:03:00] and not just jump around too many places without truly understanding the user and getting that user feedback to, you know, tweak your product and figure out, you know, different features for it and then expand. So sometimes I think founders get a little ahead of themselves and that can hurt the pitch versus helping.

[00:03:22] Andrea: After hearing Pilar say this, I had A LOT of questions because you’d think investors would want to know how well your company is going to do in the long run right? And that’s actually one of the things that Mitra, another Judge at the Rice Business Plan Competition is keeping an eye out for:

[00:03:40] Mitra: Investability. Is this a company into which I and other investors are willing to put our money? And Investability really comes down to four key things. Is this the right product at the right time? Is it being delivered by the right team? And do they have the right backing. Each one of those really unpacks to a lot underneath it, [00:04:00] but each one is critical to success. And without any one of those four, it's not investible. Second of all, I wanna know that this is a product or a service and a company that can both scale and grow massively across the country, and that can get to some sort of an exit within the next five to 10 years. We prefer five years, but 10 years is certainly sometimes what we see.

[00:04:28] Andrea: So, Mitch, what do you think? What exactly should you be focusing on when you’re planning your roadmap to make it more appealing to investors? Does the information you choose to include in your roadmap depend on the investors/judges you present to?

[00:04:42] Mitch: So investors are not customers, right? So now that I have been in business, I have a slightly more nuanced version. So investors just wanna see that you have a plan and that you're aware of where certain things can trip you up. And where you may need help. [00:05:00] And then they also wanna see that you have a budget where you can allocate money towards all these different parts of your plan, regardless of whether your business is actually executed in that fashion or not, because they expect a lot of things to pivot into change in real life. I would say, um, looking back in my initial roadmap, what I wish I would've included, Were the people in the skillsets that I needed in order to execute all pieces of my roadmap. Uh, I have a problem where I can do almost anything. Like literally, if you told me to get a rocket and like I worked at like SpaceX and like get it to Mars, fine. And I'm a hard enough worker that like, I'll figure it out. Whereas most employees do not work like that, or most people are not like that. And so I wish that I would've been more intentional about thinking who I needed on my team to execute each piece of my roadmap, because not everyone is like myself.

[00:06:00] Andrea: And in a competition like the Rice Business Plan Competition, where the judges and investors may be looking for different things, how do you create a pitch that's going to appeal to them all? Do you do research the judges beforehand in order to better know how to pitch to them?

[00:06:15] Mitch: I once read on LinkedIn, a, a pretty successful founder posted. I didn't realize as a CEO that I'd be responsible for making so many pitch decks. So you have pitch decks that you give to your investors, pitch decks that you give to customers, pitch decks that you give to employees, partners, B2B partners, et cetera. So you may be the same person or the same startup, but the way you communicate. Is going to be different to all of these groups and the faster that you realize that the more successful you are going to be as a startup. And so we did our due diligence. Who is in the room? We knew that there was a lot of oil money. [00:07:00] And so we took all of that feedback in when thinking about how we were going to create a memorable pitch. And I said, I'm, I really pray that all of our founders are doing the same.

[00:07:08] Andrea: Okay, now that we have a better grasp on the competition and what some of the judges are looking for, let’s meet our teams, starting with Active Surfaces!

[00:07:18] Shiv: This is Shiv from Active Surfaces. We're an early-stage spinout that's re-imagining the way we think about solar with our groundbreaking ultra-thin film, flexible solar technology, our IP developed here at M-I-T can unlock terawatts of solar energy by making any surface active in a way never before possible. Our team is led by Richard, who's an M I T PhD graduate and an expert in energy innovation. He actually invented a lot of the tech that goes into what we're making. Khalid an MBA candidate, MIT, and who's also gonna be pitching with me in Houston is leading the development of our go-to-market strategy, trying to figure out how do we get this to the world.

[00:08:00] And I'm Shiv an MS MBA student here with over five years of experience in the energy sector at Exxon and the DOE. My job is all about sales. How do I get the right investors on board? How do I get the customers excited about this and how do I get the right team members to come out and help us build the future?

Our main concern right now that's like on my mind is striking the right balance between conveying the huge potential of this technology and focusing on a strategic beachhead market. Because we believe that this can actually revolutionize solar. It can change the way we think about it. Any surface can be solar. So if you have something that's a hundred times lighter than the solar panels we know, and you can make it flexible, then what does that unlock? What are our go-to market? What are our sales channels? And the way we're trying to solve this is through a ton of customer discovery. Khalid is hard at work. Organizing meetings with the REITs, real estate investment trust, solar installers, large asset owners, and deepening our understanding of how this works. [00:09:00] What is the sales channel? What are their pain points? How can we add unique value and solve the problems they're experiencing in the field today? That's the only way to truly understand this, is to talk to these people and have conversations, and that's what we're focusing on.

Our game plan is twofold. First, we're gonna focus on perfecting our pitch. We're gonna revamp the slide deck, understand all the general pieces that go into it. Getting mentorship from all the awesome professors and mentors that have offered to spend their valuable time guiding people like us, just because they believe in the vision too. And second, our game plan is to make the most of this opportunity. There's gonna be an awesome community of people here. There's gonna be investors in the crowd. There's gonna be other awesome founders working on cool problems that we wanna connect with. Cause this is an ecosystem. And if we can help each other succeed, we can help build the future together.

[00:09:48] Andrea: Okay, so Shiv said that their main concern is:

[00:09:56] Shiv: …striking the right balance between conveying the huge potential of this technology and focusing on a strategic beachhead market.

[00:10:00] Andrea: Mitch, can you tell me what beachhead means?

[00:10:08] Mitch: It’s a term that comes from war, like the Battle of Normandy, and this idea that if you can capture the beach, you can capture the island. And so you'll send a lot of people and soldiers to die, but you'll capture that beach and then from there you'll be able to advance as a military.

[00:10:30] Andrea: That’s so interesting. When you were pitching Oya to the judges at the Rice Business Plan Competition, how were you able to do that?

[00:10:36] Mitch: Being an underrepresented founder who's woman presenting, we already know that judges are more likely to ask us questions around implementation and about risks as opposed to big picture. So I think it's good that his brain is going this direction because he is an underrepresented founder, and that is where a lot of underrepresented founders get tripped up.

[00:11:00] I think you do though, have to say big numbers at the front to make that sexy. And so what I would say is RPBC gives you a framework. So they're like, these are all the slides that you need to have in your pitch, and I think it's making sure that you have a slide that addresses each of the sections that it says that you need to have in the pitch. So you have a slide that talks about big potential, et cetera, and gives a really big, investors love the number billion, so like the more billions you can put in the deck around your target market, it's great. But then you also have a very detailed and yet simple to understand slides speaking on how you'll capture your beachhead and how you'll grow.

[00:11:45] Andrea: And I also really like how they’re approaching the competition – that they’re looking forward to meeting the other competitors because then even if they lose, they still benefited from meeting other founders that could help them along their own journey. This is something that Detara Williams, co-founder of Darlyng & Co. [00:12:00] mentions on episode 15 of This is Small Business. She gives a lot of advice on funding your small business and pitching. One of the things she advises everyone to do in a pitch competition is network because then, even if you lose, you still walk out of the competition with something.

[00:12:18] Mitch: I think that's critical. You can meet investors, you can meet advisors, you can meet potential partners, and so it's really important. It's exhausting because it's multiple days where you're in a different city, but that you're on and that you're receptive to all of the energy that people want to give you.

[00:12:40] Andrea: I’m so excited to see what Active Surfaces pitch is gonna sound like but for now… let’s meet DIA.

[00:12:45] HOST (Andrea): You're listening to This is Small Business Next Generation, brought to you by Amazon. I’m one of your hosts, Andrea Marquez, and along with Mitch Gilbert, we’re introducing you to the world of business plan competitions and learning about how to best pitch your business in a way that attracts investment, [00:13:00] in the case of the Rice Business Plan Competition, teams are competing to win up to $350K towards their small business startups.

Did you know that nearly 60% of products sold in Amazon's store are from independent sellers - most of which are small and medium-sized businesses? If you’re an aspiring entrepreneur or an early-stage small business owner, there are many resources that Amazon offers to help you succeed and grow. One of those resources is the Amazon Small Business Academy where you can find the help you need to take your small business from concept to launch and beyond. You can strengthen your skills at no cost with live and on demand trainings, Q&As, events, and even find more This is Small Business Next Generation content. If you don’t know where to start, you can take the free self-assessment on the Amazon Small Business Academy site at www.smallbusiness.amazon.

[00:13:56] Sloan: DIA aims to revolutionize the realm of healthcare by making point of care non-invasive sensors [00:14:00] that measure many molecules crucial to mental and physical health through saliva and sweat. Currently, my co-founder, Julio and I, are hard at work building out our pitch deck in order to try to not bore you in Houston in a few weeks. Rice is a little different for us from other pitch events we've done because it's the first time that Julio and I are pitching together and because the Rice pitch event is a lot longer, 15 minutes from the other events I've done. On the one hand, this is great because it allows us to share more about what makes DIA's technology truly capable of disrupting the biomarker testing market, but it's also a lot more content to keep track of and prep ahead of the competition.

Currently I'm in the process of writing out our script, which I never follow exactly, but it's always really good to have in mind for longer presentations. I actually sometimes record myself practicing and play it back to myself on my runs just to help me get it in my head. While I'm a scientist by training, I've spent the past six years working in scaling and startup tech companies and will graduate with my global executive MBA from Duke in May. [00:15:00] So at DIA, while I understand our science. My role is really to handle the business end of things, financials, strategy, operations, and Julio handles the chemistry. Julio is an absolute brilliant electric chemist, currently finishing his PhD jointly between Tech de Monterey, and Mexico and Purdue.

We also have a third co-founder, Fernando, who is an engineer handling the mechanics, electronics, and app integration with both Julio and I being trained as scientists, the feedback that we usually get about our pitches is that we are too technical, so I'm definitely worried that our Rice presentation might lean that way as well. We are working with a lot of our advisors and mentors to sharpen up our presentation into a true pitch that hopefully investors will find compelling.

[00:15:43] Andrea: This is exciting. So DIA is doing two things right. Consulting mentors and practicing. I love that she’s recording herself as she practices, that’s such a good tip!

[00:15:55] Mitch: I think it's important to practice at other pitch plan competitions [00:16:00] before you get to Rice, because if rice is your first competition, it can be really intimidating. You're like all these people, all these competitors, there's a lot going on, lots of critical feedback. So it's important to get some reps under your belt. And I would say it's even more important not to practice by yourself or like recording like yes, we did that at some point to make sure that we had lighting and all of that stuff, right? But I practiced in front of people. I practiced in front of people who didn't like me. I practiced in front of people who were advocates. I practiced in people who weren't interested in investing in my vertical. I've practiced in front of people who have succeeded at what I wanted to do before. And so getting all those different types of feedback really helped me create a compelling case. And I would say in between rounds. At Rice specifically, I went through all the feedback in the notes and the day of right after my pitch, and then I would try to implement as many of them as I could, and then I got more feedback to change everything. And then the next morning I practice again [00:17:00] with the notes and updates that we had, and then I kept practicing until I felt like I had something good going into that day of competition.

[00:17:10] Andrea: I am a little worried about their pitches being too technical because they sound like complicated products. Explaining it is super important but making sure you’re able to deliver it in a way that’s easy to understand and interesting is even more important, right. It doesn’t matter how good your product is if you can’t explain it well. Here’s what Pilar, one of the RBPC judges, had to say about delivering your pitch:

[00:17:35] Pilar: A lot of times you're nervous and you're trying to quickly go through your slides that you don't want to just sound, you know, monotone and just kind of going through the motions. You really wanna show the judges, Hey, this is something that I really care about, that I'm passionate about, that I'm dedicated to. And you really wanna let your personality show through that pitch, it really makes a difference.

[00:18:00] Andrea: I think when it comes to technical and complicated products like DIA’s it’s difficult to do that. So can you talk to me about your experience of integrating your personal story to the Oya story so that it resonates with more people?

[00:18:12] Mitch: Yeah, I really resonate with Dia, not just because they too have a complicated product, but also, Sloan is an underrepresented founder and so is Julio. And when you're underrepresented, it's easy for investors to get lost in the gray areas. So it's really important that what you're communicating emotionally resonates with the audience that you're talking to, and that they're able to somehow find truth into what you're saying. And so while working on my Rice Pitch, it was very

important to me every round to take in the feedback to understand what exactly were judges hearing and what they were not hearing. And so that way I was able to recalibrate every round and get a lot more effective. [00:19:00] I was also embarrassed to really talk about my story. When we first started rice. I was like, yeah, yeast infections, nebulous and like add all these statistics. And by the end I was like my own story and it required a lot of bravery for me, but it again helped me better emotionally connect with judges.

[00:19:20] Andrea: That’s great advice Mitch. So the Rice Business Plan Competition also has a 60 second elevator pitch in addition to the 15-minute pitch. And that's a huge difference in time. So what's the difference between them. And as a competitor, how do you make sure you're including enough information in both pitches while respecting the time given to you?

[00:19:45] Mitch: Yeah, I think it's cuz the judges are looking for different things and as a founder, that's part of your job. The purpose between those two pitches and their length though are very different. So the 60 second pitch is, as a founder, can you succinctly [00:20:00] explain how you're different and how can you carry the energy of a room? And so that's really a test to be like, can you be an Ariana Grande? Like, will people listen to you? And I think that's the 60 second pitch. The 15-minute pitch is a lot more in the nuts and bolts and is really trying to understand how does your business work? Do you understand the risks? Do you have the right team in place to mitigate those risks? And also that's where you start getting feedback on your actual business model from the judges and around areas that you can improve. So I think both of them are very helpful.

[00:20:37] Andrea: And do you have any advice on how our competitors should handle each pitch?

[00:20:42] Mitch: Yeah, 60 seconds. You just wanna sound fun, like, you wanna sound intriguing, right? Like you wanna create some sort of like emotional response where someone's like, oh, I remember this person. And that's so important when you only have 60 seconds. So like, could you clearly articulate the idea? Were you memorable? [00:21:00] Are you differentiated? And can you somehow defend your differentiation? As for the 15-minute pitch, I think that's where it's really important for you to look at the rubric and actually make sure that you're answering all the questions. Sometimes people just kind of go off and do their own things, and it's like that's why you have a rubric to begin with. I also think it's important that you look at... you may not be able to see competitor decks, but you can see other decks of people who've done well in the past or some of the pitches that have won at Rice, and see if you can find their decks and things like that on the internet, because that's a proven model.

[00:21:38] Andrea: Okay so, Mitch I’ve got a little surprise, wanna know what it is?

[00:21:43] Mitch: What is it?

[00:21:45] Andrea: Sloane gave a little sneak peak into their pitch!

[00:21:50] Mitch: Yay. I'm excited to hear it.

[00:22:52] Andrea: Same! Here it is:

[00:21:54] Sloane: I'm not gonna do the full 15-minute pitch, but maybe give you a little bit of the intro teaser so that you'll be excited to tune in for the real thing.

[00:22:00] So, hey everybody, my name's Sloan Tilly, and I'm the CEO and co-founder of Dia. I'm excited to be here with you today with my co-founder and chief Scientific Officer, Julio Freden to talk to you about how DIA's non-invasive sensing technology will disrupt the at-home biomarker monitoring market to save the US healthcare system, millions of dollars and potentially millions of lives.

The origin story of DIA is a personal one, it begins about seven years ago when I was a thriving PhD student at UNC Chapel Hill, who is discovering my love and talent for the sport of triathlon. Unfortunately, while on a training ride, I was struck by a car on my bike and wheeled out of the hospital on my 23rd birthday with life-changing injuries. Over the following weeks. As I was shuttled to countless doctor's appointments to have yet another blood draw for a biomarker test, I realized something with the clinical lab testing industry was broken. [00:23:00] My health depended on my loved ones, fulfilling an unreasonable burden to be available at all times, to transport me to appointments.

While my healing was interrupted from the toll of having to test outside the home, yet I was lucky. I was only monitored for two months. For the over 100 million Americans living with a chronic condition, this burden is a reality that's lived over years. And despite the United States spending the highest percentage of GDP on healthcare of any nation, with over 75% of that spending totally totaling 1.5 trillion going towards caring for chronic conditions, the prevalence of and death rates from chronic health conditions continue to increase.

Now, the Covid 19 pandemic was a tragedy that all of us wish could be undone. However, it forced an acceleration of telehealth in a way that is primed to the market for a complete revolution of remote patient monitoring. Currently, doctors can monitor their patient's blood oxygenation, blood pressure, temperature, heart rate, and even heart rhythm. [00:24:00] From the convenience and comfort of the patient's own home, the data is accurate and securely handled, resulting in lower healthcare costs, better communication between physicians and patients. And ultimately better health outcomes. However, the only biochemical marker that we are able to monitor remotely is glucose, and we've been doing that since 1999.

So in those many jarring trips back and forth between various doctor's appointments, I wondered why, if it's well known, that many health conditions require frequent monitoring of biochemical markers. And doctors make adjustments to care plans based on these data. Why are we still unable to measure biomarkers at home? This is what we're aiming to change.

This is the DIA solution, and so I'm gonna leave it there on that cliffhanger.

[00:24:55] Andrea: That was great! And it was such a heartwarming story.

[00:25:00] Mitch: Yeah, it seems like a very great introduction. I'd definitely still want to understand how she's going to explain the complicated parts of her business in a way that also emotionally resonates. And, I'm excited to see how it all comes together and to see her pitch person.

[00:25:17] Andrea: I’m excited to see how they deal with it all! Make sure to subscribe and follow us on This is Small Business Next Generation, to see how the different teams we follow perform as the pressure mounts. Will they buckle under the pressure? Will life get in the way of them winning? How will they make the most of their time there? And if you’re a regular listener of This is Small Business, you know I can’t leave without going through some key takeaways from today’s episode:

• Andrea: One. Having an overall vision for your company is important. But don’t spend too much time on the expansion part of it. First think about the solid strategy in place that will help you accomplish your goals in the building phase. Investment in research in development is key here too.
• [00:26:00] Mitch: Two Investability. We spoke to Mitra a little earlier and she gave us her framework for investors and startups and their ability to answer these questions. And those questions were one, is this the right product at the right time? Two, is it being delivered by the right team? Three, do they have the right backing? And four, is this a product or service, company that can both scale and grow massively across the country, and that can get into some sort of an exit within the next five or 10 years. So according to Mitra, each of those things really impacts a lot underneath it, but every single one of them are critical for success. And without any of the four, that business is not investible according to her framework.
• Mitch: Three. Balancing explaining your product and all of the finances can definitely get really tricky. I would say make sure there's someone on your team who can really help you prepare. I wouldn't say that that's an area to wing it. Find someone who has some business modeling or financial modeling experience and to create a model where you feel comfortable [00:27:00] with great returns, medium returns and lower than expected returns.
• And then as far as explaining your product, I would say it is very important to be working with a coach and to be receptive to feedback, because sometimes you're gonna get feedback that you suck. And that's really important.
• Andrea: Four. Make sure you try to make connections in any pitch competition you compete in. These competitors are on the same path you’re on. So, having a community of entrepreneurs that can help each other out is super important in the often-lonely journey of building a business. And if your team doesn’t win one of the grand prizes, you can also win in other ways… maybe it’s by meeting a key investor that will help you raise the money you need.

[00:27:45] Andrea: We’d love to hear your stories wherever you are in your journey. Whether you're about to start your own business, in the process of it, or maybe even getting ready to pitch your business in a pitch competition. Reach out to us at thisissmallbusiness@amazon.com to tell us what you're up to. Or let me know what you think of the episode by leaving a review on Apple Podcasts [00:28:00] – it’s easier if you do it through your phone. And if you liked what you heard -- I hope you'll share us with anyone else who needs to hear this!

If you’re an aspiring entrepreneur, and I hope you are if you’re listening to This is Small Business. Or maybe you already have your small business up and running and you’re ready for the next step. A super valuable resource that can help you is the Amazon Small Business Academy where you can find the help you need to take your small business from concept to launch and beyond. Take the free self-assessment on the Amazon Small Business Academy site at www.smallbusiness.amazon.

This is Small Business: Next Generation is brought to you by Amazon with technical and story production by JAR Audio. I’m one of your hosts, Andrea Marquez –

[00:28:43] Mitch: And I'm Mitch Gilbert.

[00:28:45] Andrea: Hasta luego and thanks for listening! [00:28:50]