Dave Drach

Go ahead, apply to the Kinect Accelerator, you won't regret it!

If you are even inkling about building a company around Kinect, you need to apply to the Kinect Accelerator. http://KinectAccelerator.com

The Tuesday before the holidays, December 13th I believe, I was in Mountain View, CA for some team meetings. A friend said that there was a Kinect meetup at the Hacker Dojo in Mountain View. Now, this I could not miss. I attended and spoke about the Kinect Accelerator and then stayed for a half dozen Kinect demonstrations.

After the demos were completed I was chatting with some of the companies. I encouraged them all to apply to the Kinect Accelerator. I was surprised by the conversation with one of the companies, the one which I think was the most viable business. The founder was giving me excuse after excuse why he did not want to apply to the Kinect Accelerator, nor any other TechStars or Y-Combinator accelerator program. I was quite surprised, because this founder would be perfect for any of these programs.

I have been involved with accelerators around the world and I constantly ask those in the program, and many of the founders who I have gotten to know after the programs, what do you think of your experience and do you think it is worthwhile. I have yet to have a single founder say to me that they wish they had not done the program. Event companies that have failed have raved about what they learned.

So, bottom line is this, if you are building a Kinect based solution that you would like to evolve into a business. You need to apply to the Kinect Accelerator. And, even if you do not apply, you need to keep track of the Kinect Accelerator web site and see what is going on, because, even if you are not there, you will learn about how to complete a real product and then bring it to market.

In fact, to make it easy, we are going to create a blog here, on the Kinect Accelerator site. Just sign-up for the RSS feeds and enjoy. It's going to blow your mind.

Need some seed funding? How about the US Government… NSF SBIR Grants

It's tax season and I just wrote a large check to the US government. I often wonder exactly where my money is going? Some MRE's for a soldier hoofing it in Afghanistan, a new trail in Rocky Mountain National Park, or a shrimp cocktail on Air Force One. But one small slice of my tax check goes to the National Science Foundation, and an even smaller slice of that goes to the Small Business Innovation Research (SBIR) fund.

Last week, I had the honor or helping our federal government give that little tiny slice of my tax check to some very well deserving startups. The intent of these grants is "to provide funding for some of the best early-stage innovation ideas -- ideas that, however promising, are still too high risk for private investors, including venture capital firms." This is goodness. I have been engaged with the Venture Capital community long enough to know that they take calculated risks. Investing in technology or products that are clearly innovative, but don't have a near term potential for massive market growth is something that most VC's, and most angels for that matter, avoid. But then you say, why should anybody invest, just wait until the market is ready. Well, sometimes technology needs to pushed along a bit until the commercial application becomes apparent.

Some examples of success from the NSF SBIR program – the bar code and the technology behind CDMA (Qualcomm), so now you can check-out by yourself and make cell phone calls that don't drop. But the NSF continues to press the envelope. My participation is part of the grant review process where industry and academic professionals are brought together as a panel to help review the proposals. From academia you have scientists that understand the core technology being presented, and to some degree, how their education programs can develop more technology around what is being proposed. From the private sector, VC's, entrepreneurs and corporate venture folks like me, help decide whether the technology can be brought to market, whether it is commercially viable and if the business management in place has a chance. It is a well run process, and one that does select the right proposals.

The competition is tough to get an NSF SBIR grant, so you need to be on your game and it is more of a documented proposal than you may be accustomed to with most VC pitches. But these are grants, so you do not have to commit any of your company's equity to the US government. If you execute against the milestones, you get your payments, and you can grow your company as you see fit. There are 3 phases that are available. SBIR Phase I grants range up to $150,000 and are essentially seed capital for your idea. SBIR Phase II grants are proposed based on successful execution of your Phase I grant and is essentially an angel round to get the company functioning or launch the product deeper into the market. Phase II grants can be up to $500,000 but can include up to an additional (Phase IIB) $500,000 to match private investment if it is acquired. The goal of Phase II is to develop the technology, company and product to the point that private investors will fund the company to prosperity from there. Do you want to apply – go here: http://www.nsf.gov/eng/iip/sbir/index.jsp .

Hey, now, every tax payer has just a little bit of angel investor in them.

I'm good with that.

The Art of the Demo

In my career I have seen hundreds, perhaps even more than a thousand demos. From the elevator demo, literally, in the elevator, on somebody's iPhone, to the two hour, every mouse-click of the application, "I'm so proud" demo. Honestly, I like demos. I like them more than most other presentation content or style. You learn a ton about a product, the company, and even about the people presenting the demo.

I have also written a few, designed quite a few and presented many demos – mostly in my time at Great Plains. When I was at Great Plains we cooked up one particular demo that was presented to the largest live audience in history, at the time, and then went on to be deployed as a sales demo to thousands of Microsoft sales personnel. This was before Microsoft acquired Great Plains when I was working at Great Plains running the tech platform activities.

But first, we need to categorize the types of demos that you may need to perform, just like the different types of presentations you may perform.

• The Elevator Demo: So easy, so portable, that you can do it in an elevator.
• The DEMO Demo: 6 minutes, soup to nuts, you pitch the product, and the company.
• The Show Case Demo: Lights, camera, action – grab the ooh, the ah.
• The Sales Demo: It's gotta close the deal. But be careful, because it's gotta work too.
• The Acquisition Demo: It's about the company, but shown through the app.

Just like any presentation, a good demo is aimed at the audience, with the intent of eliciting some response from that audience, or a key member of that audience. It is theatre and follows the same premise. When you start the demo, people have to get what you are talking about, and really get it. If you start off with some kind of complicated set-up, the audience will be lost before you even begin. Just like a great song, you build up slowly, keep everybody comfortable, engaged, wondering, and then you get to the payload. The core of what the product or service does. That the audience gets it and can remember. There may be, and usually are, many technical details in why the demo is even working, but don't explain it. Keep the audience wondering, but keep them believing.

Then there is the close, and in any demo, or any format, you need to close with something that is sticky, that resonates. It may be glitzy, an animation, even gimmicky, but it has to fit, don't go too far. One of the most memorable demos was a company that graduated out of TechStars in Boulder in 2007. That's literally 100s of demos ago for me and I still remember it. Search-to-Phone allowed a user to call one phone number, ask for a service, and that service would be broadcast to dozens of service providers. So, in the demo, the CEO of Search-to-Phone, Carmin Turco, picks up his cell phone, dials the Search-to-Phone number, and asks for an Elvis impersonator. The system sends out the inquiries, and connects Carmin with a service provider that can deliver. Carmen negotiates the rate, on the phone, in front of the live audience, and closes the deal. Carmen closes the phone and then you hear a guitar strumming outside and through the door walks an Elvis impersonator.

Search-to-Phone did a variety of deals and is private labeled in different web applications. A great demo does not necessarily mean that your company will be the next Facebook, but it gets you noticed, and is worth all the time and effort. Perhaps more so than all the effort you put into that killer PowerPoint deck.

My guidance on how to do each of the types of demos I described will be coming next.