Welcome to Technollywood: How Funding a Startup is Like Producing a Movie
Used to be, we’d joke that everyone sitting in gridlock on the LA freeways had a partially written screenplay stashed under their seat next to the Thomas Guide (remember the Thomas Guide?). At any given moment, you could rear end the car in front of you, and all the principal elements of movie were in place: a lead actor, a writer/director and blockbuster potential.
Now, no one’s got a Thomas Guide in their car (‘cause there’s an app for that), and instead of an idea for a movie, they’ve got, well, an idea for an app. Now, a collision on the PCH is merely the fortuitous intersection of a CTO, a CEO/CMO and blockbuster potential.
There’s only one thing missing, of course. Tha’ money.
In Hollywood, everyone’s perpetually looking for an EP (executive producer). In Technology, it’s a VC (venture capitalist).
In so many ways, the tech industry and the film biz are twins that were separated at birth. Or dopplegangers living in parallel universes. Here’s why.
If you’re looking for funding, you’ve got to have a really big idea. The big idea shouldn’t be a new idea because new ideas are like indie films: they have a hard time finding their audiences, and the ROI is iffy. So forget sweet and unique and loaded with good intentions, and instead go for something that has mass appeal. A franchise with a toy tie-in. A new ecommerce platform. Whatever it is, make sure your idea is based on someone else’s idea that other people have already made money on. Superman meets the apocalypse. Abraham Lincoln fights zombies. Ebay for local artists. Radio with only music you like.
Then, turn the screenplay, er, prototype, of your big idea into a pitch. And it’s all about the story, of course. Feel free to set the tone, identify the genre and hint at the world we’re entering into, but you gotta hook the audience from the first moment. Introduce your characters and their special powers. Identify the problems and how you’ll overcome them. Throw in some really clever twists they didn’t see coming. Build to a climax.
But don’t explain the entire story; that’ll take too long. You want to leave ‘em wanting more, which means you have to focus on the most important plot points. Hone them into a fast-paced, entertaining delivery. Practice it on friends. Get feedback. Rewrite it. Iterate. When it’s perfect, memorize it. Be able to start and stop it.
Then fill your calendar with meetings and get real comfortable with rejection.
Here’s another interesting thing about film and technology. Women are in the 5% club—doesn’t matter if you’re talking about directors or venture-backed startups founded by women. We’re in the minority. The scintilla of the minority. But I don’t pay any attention to the studies that suggest men are 40% more likely to get money than I am. All I know is that we’re all chasing money. And money can be funny. Sometimes it doesn’t want to know your story, it just wants to know if you have an A-lister in a leading role. Or it only wants to see that you have a solid business model that includes both foreign and domestic territories. And money likes company; it has a herd mentality. Even so, regardless of gender, getting money is hard for everyone.
It was hard for Kathryn Bigelow to get the money to make Hurt Locker. She developed the screenplay on spec (without funding, i.e. bootstrapped), had to cut her already modest budget by 35%, and then was turned down by every entertainment bank in the world. She was forced to cobble together financing from risky and expensive sources that included pre-sales, gap, bridge, tax credits and equity funding.
Likewise, it was hard for Howard Schultz to get the money for Starbucks. After presenting his idea of opening a series of Italian-style coffeehouses to 242 potential investors, his father-in-law (whose daughter was pregnant with their first child) asked Howard to give up his dream and get a job.
Bigelow went on to become the only woman ever to win the Academy Award for directing. And Starbucks? There are now more than 21,000 of ‘em in over 65 countries. And counting.
So I’m going to keep doing this thing and follow the examples of my predecessors: jump over the no’s until I get to the yes’s.