StartFast's James Shomar: Three key points for investment
When James Shomar of StartFast Accelerator started his presentation sans-Powerpoint, I was skeptical. This skepticism lasted all of two minutes; I realized I felt much more connected to James than I had other speakers at Whitman School of Management, purely because he was more present. He stood in front of the computer — in front of the table in front of the computer — and looked at us as he spoke.
While James invests in software start-up businesses, he stated he’s “investing in ideas, not the technology” — technology can always be revamped and fine-tuned later. “What matters is your ability to find product-market fit as quickly as possible,” James explained. His perspective on investing is similar to his communication style: it’s not the technology that drives the conversation, it’s knowing your audience and speaking directly to them. His very human presentation was still articulate and thoughtful regardless of any tech.
It was fortuitous that James should speak this week, as I’m in the midst of preparing a business pitch for my own company. His lists and points about pitch inclusions helped two-fold. Some “key points” validated work I’d already included in my pitch, and some directed to me towards the weak points I could strengthen. Every sentence he delivered was full of information, explaining the “how” and the “why” behind them.
James noted he looks for three things when making investments: team, problem-solving, and demonstrated traction. He then gave further information on each point, insight into what makes a strong team.
From his inclusive and personal presentation style, I could understand why he repeatedly returned to the importance of teamwork. Understanding the team behind the idea is just as, if not more, important than the team’s business idea.
“I ask them ‘why did you found this business?’” he explained, and if the team responds with an experience they had, a customer-focused “need” they discovered and wanted to explore, he’d listen. If a team “nerds out over tech,” he said, he’ll bypass this venture. A team with a story about need, target market and customer focus is demonstrating its knowledge of the market and has all the earmarks of a successful foundation. After all, as James writes, It’s not how you see the world that matters, it’s how the world sees you.
Based on the roughly 530,000 new business owners entering the arena each month, based on The Kauffman Index 2016 Startup Activity study, I’m not surprised James reviewed around 5,000 start-up applications last year. In terms of business market projections, it appears startup incubators are great start-up investments in themselves.
While great in theory, and despite many success stories, these businesses, too, have structural issues. “These programs need better ways to consistently monitor every new business team’s capabilities and capacities to adapt and evolve,” Fast Company notes in article “Do Accelerators And Incubators Serve Themselves Better Than Startups?” This directly connects to James’ points that teamwork is at the center of any business.
It is clear the big takeaway from James’ presentation is his focus on teamwork, and it’s equally clear that this is at the core of all successful start-ups.