June 18, 2020

The Secret Art Of Fundraising | Peter Pham on The Pomp Podcast

Check out The Pomp Podcast Podcast Page

If you have an idea or a brand, ask: How is it different? Why will people talk about it, and how does it scale?
- Understand what will be culturally relevant in 12-18 months
- Think about what people love to hate (E.g. Taxis, Razor blades, Plastic waste)
Slow rejections are the worst when looking for investors, get a quick NO and move on
A pitch should tell a story and capture investor’s attention
Startups that do too many things always fail; focus on scaling the first idea
- Focus on 3 things that will drive exponential change
A founder has to understand why things are happening
- Else, whatever a company does can be copied

Peter Pham (@peterpham) is the co-founder of start-up studio Science, which is behind many of the world’s best consumer internet companies like Dollar Shave Club and Liquid Death
Host – Anthony “Pomp” Pompliano (@APompliano)

If you have an idea or a brand, ask: How is it different? Why will people talk about it, and how does it scale?
Understand will be culturally relevant in 12-18 months
- For instance, what products and services will people use post-pandemic
- Find an idea and founder that resonates with you; this is different for different people
Think about what people love to hate – A few examples:
- Dollar Shave Club: Everyone hated razor blades because they felt ripped off
- “Uber works because everyone loves to hate taxis”
- Liquid Death: plastic water bottles and straws kill fish and whales

Social media facilitates word of mouth
- 100 people could be heard by thousands or millions
Create content and give people something to talk about – For instance:
- Liquid Death turned hate comments into a death metal album
- Jeff Bezos recently shared hate email on Instagram with the comment “Dave, you’re the kind of customer I’m happy to lose”

Peter talks to 70-100 people during every fundraising round
- The key is to find the person where time and space align
  - Someone who is thinking about the space and has the dollars to commit now
If an investor doesn’t contact you within 24 hours, it’s a no
- Slow rejections are the worst, get a quick NO and move on

The story hierarchy of every startup:
- How was the world before? (e.g. before iPhone, Google Maps, etc.)
- What changed that allows the new reality?
  - Examples: Cheap shipping, mailing, easily reaching people on social media
- What are you doing to take advantage of that?
  - What special secret do you know that the rest of the world doesn’t know?
Practice telling the story (Peter practiced pitching Liquid Death over 500 times)
- Your story should resonate with an ordinary Gen Z person, not just investors
You have 15 minutes of attention with an investor, capture them or lose them

Pitch with confidence, not arrogance
Keep in mind: desperation never works
- You don’t need to tell potential investors everything
- Your shares in the company are valuable, treat them this way
Additionally, it’s a privilege to invest in a company that will be worth more in the future
- Make investors sell you

Startups that do too many things always fail; focus on scaling the first idea
- Case in point: Uber took a long time before starting UberEats
As a founder, focus on 3 things that will have the biggest percentage change
- E.g. Recurring customers, customers converting to paid service, people sharing, etc…
- Think about the cohorts of customers and follow their journey
  - “For the customers that came in last month vs this month, everything is much better”
“Linear is flat”, linear change isn’t interesting
- Exponential growth attracts potential investors who feel like they are being left out
Investors love to feel they are taking advantage of previous investments
- So, show how your business improved since the last fundraise

A founder has to understand why things are happening
- Else, whatever a company does can be copied
“Every startup, you want to be either number 1 or number 2 in the market, there is never number 3” – Peter Pham
- Typically, one pulls completely away from the other
  - Example: HomeAway was first but Airbnb understood the customer better and pulled away

Arrive Outdoors – rent camping gear
- The pandemic came along and shut everything down
- Luckily, everyone wants to go out and camp post-pandemic lockdown
Lambs – for protective clothing against phone radiation

“It’s not work when you love what you do” – Peter Pham
We will see the digitization of everything and the globalization of digital assets
- Example: buying Tesla stock from any country without having an account with some bank
Good ideas allow people to customize, personalize, and make it their own
“Do good things, celebrate your wins, and ignore the haters” – Peter Pham
Peter is always the first on the dance floor