Tag Archives: advice

AlleyBoost Fireside Chat with Brian Cohen of NY Angels: Pinterest, pitching and personality

11 Nov

AlleyBoost hosted Nir Eyal and Brian Cohen at Mercy College on Tues. November 4, 2014. I’ll post Nir’s talk in a separate post later this week. You can read about his chat at StartupGrind here.

Brian Cohen, chairman of NY Angels and author of What Every Angel Investor Wants You to Know, spoke about everything from angels to Pinterest, his most famous investment to date.

briancohen

Brian Cohen talking to an entrepreneur while subtly showing off his book.

Although Cohen didn’t spend the whole time talking about Pinterest, the reasons he initially liked the startup illustrated many of the points he made during the fireside chat.

Cohen was the first investor in Pinterest. He likes to get in early and give the first check. He’s aware it’s risky, but sometimes it works out really well – like Pinterest well. What helped Ben Silbermann, cofounder of Pinterest, even more is that Cohen really liked him. Cohen cares a lot about the person he gives his money to.

“I like to know ideas early,” Cohen said, adding that founder’s backstory adds to the allure of the pitch. “I want to know the person behind the idea. Who are you? Where did you come from? Why did you think of that? A lot of times I want to be the first check.”

He calls everyone he has invested in a friend or someone he’d like to be considered friends with. This is because often times, the person is even more important than the idea. Not just because Cohen values friendship.

“I’m not investing in your idea; I’m investing in your ability to execute,” Cohen said.

The reason the person is important is because they have to know how to build the business, even if it’s not the idea they started with.

“75 percent of the time the company I invest in is not doing the same thing 1 or 2 years later,” Cohen said.
This was the case with Pinterest. The site started as an iPhone app called Tote, a catalog for women’s accessories, which in itself was a good enough idea with a good enough team to get Cohen on board.

Pinterest customers told the founders they wanted a way to collect all the things they liked. Silbermann cared a lot about what his customers thought. Using their feedback, he gave the world a place to digitally pin, and a new interface called a board. It duplicated an action people do in the real world online and it did what the customers asked for, which are factors in its success.

Today, Pinterest is valued at $5 billion. Cohen said almost no company gets that kind of valuation, most are somewhere between $2 and $4 million, depending on the sector and the team (serial entrepreneurs are valued higher). When it comes to investing, while valuation is a piece of the decision, he said it isn’t everything. He also doesn’t care about traction but said it helps increase the valuation.

Pitching advice
Cohen, who studied rhetoric as an undergrad, believes in the power of a great communicator when it comes to pitching. He also believes in the power of a Google or LinkedIn search – meaning know the investors’ background. When speaking, be clear, crisp, clean and definitive. This means don’t use qualifiers like “I hope” or “We’re trying.” If those are the only words you can use to describe your business, it could mean you are in a position of weakness, and Cohen said that is a bad time to look for money.

For those who would rather “bootstrap” than raise money from a VC or Angel, Cohen thinks that’s stupid. He said people who are self-funding probably couldn’t convince anyone to invest. He also advises raising money six months before you need to it.

Remember to talk about exits in your pitch and have a timeframe in mind. Cohen said the average exit takes 6 to 10 years. Exits are important to angel investors – it’s how they make money.

“The word ‘exit’ to me is like sex – that is at the end the ultimate prize,” Cohen said.

This was originally written for Office Lease Center.

How to improve sales – tips from a former salesforce exec

6 Nov

Elay Cohen, the former Senior Vice President of Sales Productivity at salesforce.com, shared his proven communication-based sales techniques at an AlleyBoost class on Tuesday, October 28 at Mercy College. 

The entrepreneur and author urges companies to bring humanity back into sales – internally and externally. Cohen injected this personal, relationship-focused attitude toward sales into the culture of salesforce.com, which grew from $500 million to $3 billion in revenues while he was there.

“People would ask how we hit our numbers so fast,” Cohen said. “It has to come from the heart and soul of the company.”

Cohen’s sales philosophy comes from his experience learning sales from his father, a furniture storeowner, selling products door-to-door, and working in sales at various companies, including salesforce.com. He wrote a book called Saleshood and started a SaaS sales-solution startup with the same name. Founded less than two years ago, the company is already breaking even without any VC funding. Cohen said they are starting with a limited amount of customers so they can get the product right before they scale.

Salesforce

At salesforce Cohen created an environment where the entire team shared a single sales vision, which encouraged both results and relationship building with customers. When salesforce started in 1999, Microsoft and Oracle were competitors in the space. Sales reps met with customers, told them how salesforce could solve their pain faster and for less money than the bigger companies. Salesforce surprised the big names by expanding rapidly.

The company is known for its boot-camp training for new employees. The sales team continues to communicate with weekly and monthly meetings where they share success stories and allow for peer-to-peer learning.

Cohen’s formula for SUCCESS…

Read about his formula and more at Office Lease Center’s blog: http://bit.ly/1vqANez.

Shark Tank’s Barbara Corcoran answers questions on Onevest webinar

15 Oct

Screen shot 2014-10-15 at 1.56.40 PMBarbara Corcoran, one of the favorite Sharks on ABC’s show, explained what makes her invest, stressed the importance of the entrepreneur and debunked some widely-held convictions.

First, she said she has 24 investments and loves doing it because it brings her back to her youth as a 23-year-old waitress. Well, except now she would be a very wealthy waitress. She said these investments aren’t charity, it’s about making money, and she looks for people who have the drive and backbone to make that happen. 

Q1: What makes you invest?

1. Entrepreneurs that can handle objections and stress

“My clear winners, my most successful salespeople and entrepreneurs – who are also salespeople – are fabulous at overcoming objections every single day of their life and they have an inability to feel sorry for themselves,” she said.

She admits these may not be the smartest people, but that doesn’t matter. Their tenacity and quick recovery time leads to success.

2. Plain talk

Corcoran said stay away from using complicated lingo – your pitch should make sense to a 5-year-old.

“When someone talks too fancy, I know they’re overeducated, it gets in the way of success right now,” Corcoran said. 

She wants to her – this is my business, this is why it works, this is my plan.

3. Long-term passion

The first three months in a relationship are the honeymoon stage. Corcoran wants to find entrepreneurs who will maintain that excitement, enthusiasm and passion for the long haul. 

4. Marketing maven

Entrepreneurs need a marketing difference because marketing is half the success of the business.

Q2: Can you speak to a time you failed you failed and what you learned from it?

Corcoran has a background in real estate, and one of her first ideas was Homes on Tape (she recognizes the acronym was HOT), so people could pick apartments from home. “I blew $71,000 on that stupid idea.” In an attempt to save face – she put the homes on tape on Internet, and well, it was hot.

“Every huge success I had was on the hind of failure,” she said. 

Q3: How important is intellectual property in your decision to invest?

She said it’s overrated, “It breaks my heart to see people spend a lot of money on patents before they have their first sale. The right time to do all of that work is after you have people who want to buy.”

Business schools may say patents are important, but Corcoran said it’s “grossly overrated.” 

Q4: How actively involved are you in each startup your involved with and how do you allocate your time?

After two years of spending way too much time on the startups, Corcoran started allocating her time differently. Now, in the beginning, she spends spend as much time as possible learning the business and getting to know who she signed up to work with. 

“The minute I sense the entrepreneur isn’t smart, enough fast enough, I don’t spend any more time with them. In my heart of hearts I think they’re never gonna make it, they don’t have what it takes.”

She will even goes as far as to take the framed picture she has with that entrepreneur and turn it upside down. She’s not that harsh – she’ll still support them and answer their emails, she just won’t look at their faces every day. Sounds fair. 

Q5: What role does barrier to entry make in your analysis in making an investment?

This is another one of those terms we’ve probably all read in our business books, like patent, that Corcoran calls “overrated.” Barrier to entry and competition don’t faze her.

Q6: When you’re about to make an investment decision, what signals do you look for before pulling the trigger?

She said on Shark Tank there’s a lot of show business and she signs up without having all the information. She takes into account how they can compete, price, distribution, revenue, etc.  

On crowd-funding site Onevest she can spend time analyzing carefully. But again, it all comes down to the people.

“If the entrepreneur isn’t good, no matter what the paper work says, no matter what the analysis says, if they’re not gonna make it they’re not gonna make it.”

Q7: What factors take place in valuation of a startup?

“I don’t like stuff with no revenue,” she said. “There’s too much stuff with revenue. Until there’s a sale I don’t believe it.” So she probably won’t invest in SnapChat or Instagram anytime soon, but peanut butter has a better shot. And I just bought the WIld Friends peanut butter that she invested in on Shark Tank – it’s delicious!

Q8: What is your greatest fear and how do you manage that fear?

Corcoran said she uses her insecurities as a motivator. She used to feel dumb at school for not knowing the answers.

“If I’m feeling insecure…I stop the tape and I have a new tape that goes like this, “fuck you!” I have just as much right to be successful, and watch me do it. It stamps out that old tape. I feel prideful that I reached out rather than talked myself out of it.”

Q9: How important is market size to you and financials?

The piece of the financials that makes a difference is sales, cost to produce and revenue.

“Market size is market size, weak entrepreneurs revert to market size when they run out of stuff in their belt,” she said. 

 She also doesn’t trust projections. Who can really predict the future, or trust someone else to predict it?

Q10: What are the top three reasons why you’d pick a startup?

1. The entrepreneur

2. It makes reasonable common sense

3. There’s a lot of people who can use it. “The more people that would buy, the bigger the mass out there.”

A paper clip for only doctors’ papers would be a bad market to invest in, she said. When Daisy Cakes pitched on Shark Tank, Corcoran said she thought, “How big is the cake market – who the heck knows? How many people watching tonight eat cake . . . her sales went through the roof and never stopped.”

Q11: Can you talk about some of your best investments to date?

She said sock company Grace & Lace has brought the best return on her investment. Cousins Maine Lobster has the best upside potential, and she got her original investment back. They have an online business, they’re opening restaurant, sold 9 franchises and have 3-company owned trucks. These are the kinds of entrepreneurs she loves.

“They’re 2 phenomenal entrepreneurs, they’re never happy, and always want to bite off more than they can chew,” she said.

Photo credit: Onevest.com