Cilian Fennell on Startup Stories and the Future of Hardware
What's the most effective way to give a pitch?
Each cohort, our startups are presented with the opportunity to hone their pitch, which essentially boils down to “What’s the best way to get your investors to invest?” For the answer, we turn to expert mentor Cilian Fennell of Stillwater Communications, who’s been with Highway1 since the beginning and has given invaluable coaching advice to countless teams. We caught up with him for a chat that ranged from tips on constructing effective narratives to the ideal hardware startup business model.
HWY1: What’s the best place for a startup to begin their pitch?
CF: The idea is to start with a really stark description of the problem. If it’s an existing problem–a known problem, we start there. Sometimes there’s isn’t one — if the company is building a new technology, for instance — we didn’t know we had a problem until this technology comes along and solves it for us preemptively. Still other startups are making technology that isn’t necessarily designed to solve a specific problem, but can instead unleash massive potential. So I often ask: are you solving a problem, or are you unleashing potential?
What’s the initial advice you give the startups when you first arrive?
At the early stage, when they first arrive at Highway1, they’ve usually identified a market, which means there’s some kind of issue they can purport to solve. By the same token, when they get here I often find they haven’t stood back or zoomed out for a long time. They’ve been so close to what they’re working on; they’re in awe of what they’ve done, not who and how it can help.
So one of the first things I always ask is: Who wants to do what? Why can’t they? How does your product help? They often try to talk about market size. I always think the value of a company is the pain it solves multiplied by the people who have that pain.
To do that, we often have to humanize the problem:
- This is Anne. She has an issue.
- This is her issue: this is the pain it causes, the cost it causes in terms of efficiency or resources or money.
- This is the solution: this is what Anne’s life will look like after that solution.
- There are [x] many Annes; therefore, there’s a market.
What you don’t want is to be formulaic. Sometimes you can start by describing the problem itself, making it so visible — almost visceral — that people get it right away, they feel it. Or you can go for impact: “Imagine [x] were possible. Well, now it is. Watch what that allows us to do…”
Do you find they’re confused about who their audience might be?
What we have to remember is that they’re looking for investment, so their audience is comprised of investors. That means their audience is usually going to have a certain profile, age, and background. If you’re pitching a farming technology, that audience might not know the state of the farming industry, so you have a lot of work to do to get there. If you’re actually introducing a new bit of technology, they definitely won’t know it. It’s a real balance to still stay fresh and innovative, but also bring your audience with you. That’s why I like using a person: it’s easy to identify with one person, so if you can bring it down to that level — “this is their issue” — then the audience’s understanding can grow from there.
Are there techniques or tricks you’ve seen teams use that can be effective?
You know me, I love a story. [grins] So when I hear about a product, I like to see that product in an existing situation that anyone can imagine. We’re working with a company now developing a very good piece of hardware for maximizing moments of extreme sports, but it’s kind of technical. So we take someone who’s trying to have that moment and tell the story of how that person’s life is enhanced by the use of this product, the value that person places on said enhancement. Story is the perfect medium for this kind of thing. Facts do not convince; truths convince, and truths are the output of good stories.
Do you find that there are commonalities within or even across cohorts, things you’ve seen the various startups at Highway1 try?
I see sectoral things. When I came here first, there were a lot of gadgets; the next time, there were a lot of industry plays — automotive, construction, pharmaceutical. We see fewer gadgets now; which I think is as the head of IKEA said: “We’ve reached peak stuff.” So tech isn’t about making something I can have so much as it is making something I can use.
Lately I’ve seen a lot of VR and AR, so we’re getting into a different type of world. That’s one we’re finding it hard to pitch, because nobody has a problem in a world without AR — that’s the world we’re in presently, and most people don’t know what AR is. That is an absolute case of a technology coming in to unleash potential, so that’s a very different pitch to one that is, say, there to make something that we’re doing inefficiently now, efficient.
Is that where you see hardware going in the next few years?
Where I’d love to see hardware go is new startups working with established businesses, and we’re seeing a few of those. Like Drop: Drop was a lovely kitchen utensil, but now Drop is working with major suppliers that don’t have the capacity internally to develop things like it. What I don’t want to see is startups all going the same route: develop your product, do a crowdfunding campaign, spend a fortune on video, PR, marketing, etc. What we’ve learned after seven cohorts is that there is no one route to success; there are many routes to success.
What people really need to do is think: can we use established big businesses to get our product out to a lot of people, or do we have to start out at the very beginning? There’s a mindset where people think the startup route is the only route, and that’s dangerous. They’re supposed to be innovating; when you see all startups doing the same thing, where’s the innovation? What I’d love to see is the boy-meets-girl story of a really high-functioning tech startup working with an established business, because that business has the relationships, distribution channels, trust, and brand that a small startup needs to get massive adoption of their product. There’s no need to reinvent the wheel.
Is there a set of characteristics that make a startup an ideal candidate for that sort of match?
If you look at more conservative industries like, say, railways or farming — industries that aren’t generally known for high-quality innovation — if a startup can make an impact in one of those spaces, it can change the whole industry. That’s the ideal: a smart team with seriously good technology who also has the thorough understanding of an established business.