Billionaire Sir Tom Hunter presenting the prizes beforehand, had mentioned the trials and tribulation entrepreneurs go thru and his opinion was that the support, community and mentor-ship was more important than the money. He did say we would not agree, but we were wrong. I will agree to disagree on that one.
It has been a long journey for nooQ, we have applied twice previously to Scottish Edge, getting to the semi-final, then into the final but didn’t received any funding. After failing twice, I hope this will give you an insight of how I got there, what I have learned and inspire you to apply.
The Lottery
The first Scottish Edge I entered was the first time the competition was opened in January 2013. After some 300 applications, I managed to get thru the first application form stage into the semi-finals of 120 or so. Still wet behind the ears, I pitched up with, in our minds, the next big thing, the greatest tech business known to man, it would be a no brainer for us to get the funding.
We had been well honed on pitching from our time in Entrepreneurial Spark so when I delivered the pitch, before the 3 minute buzzer, feeling confident, it was a shock that the judge were perplexed. All the questions were around, so what exactly is the product. They kind of got it after ten minutes of question and answer but that was the end of the road for us. Even judges with a technical background, judging 30 applications in a day will understand your technology but they don’t want to work hard to understand it when there are other people that can pitch and communicate their idea simply. At the time, we were not allowed to use visuals which was a slight disadvantage for a technology company to show their product, as with physical products no explanation is required when you can show your baby product, latest whiskey or chocolate.
I learned that the pitch was about the listener, making it easier for them, not a case of showing off how clever you are. It was like the first time I entered the lottery, thinking just pick 6 numbers from 49, I was thinking… woah this is too easy. How naïve?
Sick of it
I did a huge amount of work to get to Edge Round 2 Final in June 2013. Financial projections for 5 years took almost 6 weeks to complete, verified by McDougall Johnstone accountants specialising in startup investments. About two months of daily pitch practice, getting our proposition clearer, simpler, understandable and pitching it in front of many eSpark workshops, colleagues, family and friends. Repeating it 20-50 times per day, over and over until you are sick of it. Then another 5 times after that too. In front of audiences of 30-50, taking the feedback every-time and agonising over one line here, one word there. Every single word, comma, pause carefully scrutinised and tested. It’s not funny, but after memorising it, changing one word or sentence can take another week to forget the old way and do the new line, very frustrating.
We took a full day for the filming of the 3m pitch. Got friends who are amateur video production specialists to film our pitch, edit it with the logo, sound levels perfect just for the 3m pitch. For free, of course as you learn to barter these things when money is tight. Without a product demo or visual, this time we got a full 6ft roller banner display made, no mistaking us this time. I had for pitch training from the fantastic Mel Sherwood on delivering the pitch, which was invaluable life lesson on communication and presentation delivery. Oh the mistakes I was making made before.
I got thru the application stage, got thru the semi-final pitch stage in Perth and received some great feedback. All the effort was paying off. Feeling confident as I got thru to the final 30 from 250 or so applications to present at RBS Conference Centre in front of Lord Willie Haughey. Confident after delivering the pitch perfectly, I sat for a few hours watching the other pitches but agonising over how one or two questions could have been answered better. 17 out of 30 companies that day received funding. I was one of the twelve who received a trophy and a pat on the back. As a competitive type, I can see the positive aspects but don’t subscribe to the everyone-is-a-winner message and it was a severe kick in the stomach.
Not for the first time I gave Elaine Morrison of Scottish Enterprise some constructive feedback on how the process could be improved, especially on the limited feedback given to me was not clear enough. I prefer my feedback without sugar coating, which I believe is the best way to improve if you can silence your harshest critic, that can only be good for your company. After so much effort, just try again was not enough.
On reflection, what we were going to do with the money was not clear or strong enough for the stage we were at. I had asked for funding to licence real-time language translation software, which would have given us a market leading product, we had a buyer for it but limited ways of capitalising on distributing it further in the Asian market. A common them amongst the winners were that they were employing new staff and creating jobs. Trtl were the only one of 17 of those winners that received funding without creating jobs. I was banking on the indirect benefits if we had the money, new products would have creating new revenue which would have created more jobs. Yet future revenues are harder to quantify. You have to think from a judge’s perspective, analysing 30 applications you would mostly likely categorises each of them against several criteria and weightings. The hard part is guessing beforehand what that criteria are and line up your proposition, very clearly to meet that. Keep asking questions at the application stage on what they are looking for, analyse past results, speak to former applicants on what worked and more importantly what didn’t.
Several factors meant that we did not enter rounds three or round four of applicants for Edge Funding. After putting in so much emotionally and time-wise we decided to focus on developing the product & business. There was a limit that you could not apply more than three times, so we decided to leave it until we were more certain of winning and had a stronger case.
WIIFM
This time was easier to apply, the application form we had most of the answers from working on our investor pitch and business plan, just a few tweaks here and there, I completed the application form in under a week without breaking a sweat. The 3 minute video, I recorded myself as a selfie. As it was another late night where I was the only one left awake in the house, a selfie it was. I was taking the terms and conditions to the extreme, where video quality didn’t matter it was the pitch that mattered.
In the summer we had completed 14 week Start Global programme on entrepreneurial training from Scottish Enterprise High Growth Unit. Although we were not new to pitching, lean startup, marketing, investment finance and taking a product to market the training took us up a level or two. Especially Steve & Rowan Gardner’s course on Entrepreneurial Finance. Normally a four day course, crammed into one. A long, brain exploding day of learning from two people who have raised over £700m, from a startup idea and taken them onto publicly listed companies. It may sound daft now, but previously we had been focussing 99% of our pitch on how great our company was and not caring too much on the proposition for the investor. Surely they would love nooQ so much they would invest in the next big thing, the upside would be huge, let’s jump on. The exit has to be extremely clear. The exit my not mean selling the company. Just enough for the investor to get his piece. The WIIFM has to be super clear. Whats-In-It-For-Me. They hear ideas all day, 1200-1500 per year. The WIIFM has to closely match what they think you need and what you are asking for at. You may think you need one thing, but an investor may think it is something else. These have to align. You have to package it with a crystal clear message, the goal, and how you will deliver the project from start to end. No thinking required on their part required. Try your pitch on 50 people see if you can make them all get it clearly without any “I’m not clear on …”
Since Start Global we now have a very clear idea on what we need investment for now, next round and the one after that. It takes a lot of financial forecasting, planning, time and effort to do this, then you have to explain it simply. Then simpler again, then even more simply again than it was previously.
The panel for the final was Scottish Enterprise high growth unit Eleanor Mitchell, Alison Rose Head of Commercial Banking at RBS, Bill Morrow from Angels Den, Sir Tom Hunter & Kevin Dorren from the rapidly growing Diet Chef. I was confident Eleanor & Alison would understand my pitch having pitched and consulted at RBS & Scottish Enterprise many times before I understand the organisations well. I had met Raymond McLennan from Angels Den’s several times previously, but not Bill Morrow. I had pitched to Kevin Dorren & Sir Tom before and they were the two I was least confident would invest in my tech business with them both being more retail and consumer focussed.
Sir Tom Hunter is a huge inspiration to me. As an insight I urge to you watch this speech from the event on how to create a better Scotland & especially one of London Business School’s most popular talks on how he created Sports Division, became a billionaire and following Carnegie’s philanthropist example. On the final day, minutes before my pitch I met Sir Tom Hunter in the preparation area. I was very flattered to hear him say he remembered my submission and was very impressed by the application. I thanked him but remembered previously pitching nooQ to him at Entrepreneurial Spark 18 months previously where it delivered one of the worst pitches I have ever done. I barely got my name out and tried not to be too rehearsed but a casual conversation pitch and failed spectacularly to do either. I was hoping this was a good sign but didn’t want to get too presumptuous.
My strategy was keep it very, very simple making sure nooQ was explained simply enough, which in two years doing it, there is always at least one of five doesn’t get it. In the pitch focus mainly on the product and leave some points out of the three minutes, so they would definitely be asked in the Q&A. Then to be very prepared on my on my numbers, plans for my use of money, the market and competition. In previous rounds and investor panel pitches, I used to worry a lot more about every possible question that may come up, in general judges especially with large audiences want to be fair and not interested in embarrassing or criticizing you. They may be harsher with their judgements and review comments afterwards but that is essential feedback I always take on board & learn from.
Pitch went very well, no questions on not understanding the product (which for us, with a technology that is ahead of the market is a huge thing) and no-one noticed my leg shaking like fury with adrenaline. I even managed to ad-lib & suggest in the Q&A that Eleanor might want to use nooQ to turn down the volume on Sir Tom, much to the audience amusement. After the pitch I went back to the office to work for the afternoon, to try to take my mind off it & returned for the evening announcements.
Seven hours later, the judges announced there would be 16 winners receiving £800k funding, hinting most winners had applied several times previously. A good sign. The next two hours were the polar opposite, not pleasant at all, a gut wrenching, palm sweating, time crawling wait. Winner after winner was announced, no tech companies, no predictable pattern, confidence was plummeting. After 13 winners had been announced I was feeling a mixture anxiety, déjà vu and surely not again. I remember Donnie McLean of Eat Balanced telling me he was announced last of all Edge winners when he won, and going thru similar turmoil.
With only a few trophies left on the table, Gordon Merrylees then killed my immediate thoughts of failure & announced nooQ had won £32k of funding. Sir Tom Hunter congratulated me on stage and said my pitch was excellent. What a huge feeling of relief. It does add drama for everyone else in the room, but it is far from pleasant when it means something your immediate future depends on.
We are delighted to win this award and even more excited to speed up improvements to our marketing, our product and growing nooQ faster!