Save Your Spin for Someone Who Cares

Posted on Nov 29, 2009 | 118 comments


Handling PR with VCs

I recently got a phone call from an entrepreneur whom I respect and who runs a company that I hope will do great things one day.  He had pitched me in the past and I told him that for a variety of reasons his company was too early stage for me, but that I would happily keep track of their progress.

He started the call by telling me he had exciting news.  He was about to be featured in a major US news magazine as one of their “hot” picks.  I think my response surprised him, “Really?  Is that why you called?  To update me on your PR?  That’s what you’ve got?  PR?  Save it for someone who cares!   What progress have you made in your business?”

I don’t think that’s what he was expecting.  Entrepreneurs get so used to friends and family congratulating them on their press coverage that they forget sometimes that this isn’t real.  A positive news story means NOTHING about the core performance of your business.  A good friend of mine was featured on the front cover of the LA Times business section with a glowing article.  He had 2 weeks’ cash left in the bank and was facing massive layoffs or potentially bankruptcy.

Press doesn’t mean anything other than free advertising.  Don’t get me wrong, I’m very pro PR but please see it for what it is and don’t think that smart or experienced people are going to see it as any more than it is either.

Our call recovered and we spent the rest of the time talking about the development of their management team and their product.  But it got me thinking about how often entrepreneurs overplay their PR so I thought I’d try to offer some advice and how to play PR with VCs (or more broadly with customers or business development partners)

1. Press coverage really matters – The good news – your press coverage really does matter.  I know that most people will tell you that they aren’t influenced by what they read on TechCrunch but the reality is that people are way more influenced by what they read in the press than they even admit to themselves.  Just notice how many VC emails you get after your TechCrunch article or after you were on stage at TC50.  Please don’t take my post as meaning you shouldn’t have PR as an important part of your company’s strategy.

In another post I’ll talk about how PR has changed dramatically in the past 10 years or you can just read Brian Solis’s blog or buy his book on the subject.  Most notably you need to understand Earned Media and how blogging, public speaking and social media play an important role in the new PR landscape.

Stop-watch2. In your VC pitch your PR page should take no longer than 30 seconds – Wait.  If press coverage matters so much then why shouldn’t I talk it up more in my VC pitch?

Many entrepreneurs have a PR page in the PowerPoint deck.  It has logos of the 5-6 most prominent places they’ve been covered with a paragraph from each article.  They proceed to read these paragraphs out loud to the VCs in the meeting.

PR is subtle.  When I read an article about you I’m influenced.  When you sit and walk me through it for 4 minutes on a page I’m reminded of what it is – press coverage.  It shows nothing more than you have the ability to get coverage for yourself.  Again, I reiterate, it IS important.  Press coverage helps you to recruit team members, it helps add legitimacy to your customers who often do Google searches on you before buying and it helps influence biz dev (partners), corp dev (acquirers) and investors.

So what is the right way to pitch your PR page – either in a VC meeting or in a biz dev meeting?  Put up your slide with the 5-6 logos of journals that have covered you.  Reduce any quotes to a few key words and make them large.

When the page comes up say,

“I guess every entrepreneur needs to put in the obligatory PR page.  We feel honored that we’ve gotten such good press coverage.  Most notably we loved that ReadWriteWeb referred to us as ‘a next generation TripAdvisor” because that’s exactly how we want to be positioned.  PR has helped us to drive our numbers faster than we had planned and has gotten us to our 300,000 registered users.  We plan to continue to use PR as an ongoing part of our customer acquisition strategy.”

End.  Next page.  And only go back if you’re asked to.  Leave them wanting more.  You’ve accomplished two things.  One – you’ve shown that you understand how PR plays an important role in customer acquisition and more broadly in your company’s success strategy.  Two – you’ve been subtle about your PR achievements so the VC is left with a positive impression of your press coverage rather than becoming cynical.

3. In an email you can have curated links - So at the risk of sounding contradictory, I still think press coverage is important to VCs.  The best way to handle your press coverage is to send a series of links in an email to the VC you’re getting back in touch with.  It can be a simple email on any topic and toward the end say, “I’ve included some links to the most important (or most recent) articles covering us in case it helps with your research.”

I’ll close this story down with the one I started – the entrepreneur who called me to tell me he was about to be profiled in a major news magazine.  How could he have turned this into a positive?  After the article was written he could have sent me a short email with a one paragraph intro saying, “Just wanted to let you know we got this great coverage in ABC magazine: (link to article).  We’ve been making progress in bringing together our management team and our next release is about to ship.  I’d love to do a 30 minute call just to update you on our exciting news.”

9 times out of 10 I’ll click on the link and peruse the article.  If it’s positive it will probably have some minor impact on my perception of you – whether I acknowledge it to myself or not.  Strike one up for subtlety.

  • http://www.freddestin.com Fred Destin

    Hey you of the fabulous tumblelog. Yes, there is a lot of outbound reaching out to startups.

    The guys who are most mechanical about it are folks like the analysts at Insight Venture Partners who want to make sure they have some record of “every” company out there, so don't get excited just yet. They call them “dial for dollar” guys. They tend to focus on later-stage growth companies and will genuinely engage when they come across the occasional bootstrapped company that now books $5M a quarter and has somehow stayed off the VC radar until then.

    Also, really watch out for folks doing competitive analysis and not being open about it.

    In any event reachout programmes are far for systematic (if we VC's knew how to run a process it would be a known fact by now and we would not be getting so much crap for not getting back to people) and the venture firms that have no junior staff as a matter of course (which includes say Accel Partners on the West Coast) are less likely to spend time covering the ground and reaching out systematically. They will still be using the network for entrepreneur discovery, not TC50 or DEMO.

    So …. I think you are stuck with spending a lot of time chasing VCs, particularly when looking for early-stage financing, and occasionally getting your brain picked by a guy who wants to fund your competitor :-)

    Sorry, no easy way out…

  • http://florentpeyre.net/ Florent Peyre

    This is a great point. Because as an entrepreneur, you're living in the small ecosystem of VC/fellow entrepreneurs/tech journalists, you tend to very quickly focus on the PR coverage, especially if it comes from a fellow member: a blog post from Fred Wilso or TechCrunch will probably score higher in your own hierarchy as a feature on MSNBC.
    But at the end of the day, what makes the right VC invest in your company is the quality of the product you're pushing.
    And if you think a VC will invest because you got a blog post on TC during your pitch week to investors, then you're probably going after the wrong VC (especially if he did want to invest because you got great press coverage…).

  • http://www.appwhirl.com Richard Jordan

    Thanks for the response (and blog shout out).

    That's more or less what I have come to understand about it. I am sure we'd get giddy the moment a VC cold called us, but we're not going to get distracted by it. So long as we keep our heads down, pick the right VCs (from a fit point of view) at the right time and focus on them, and get the right introduction from someone they respect, we're probably going to do best.

  • http://markgslater.wordpress.com markslater

    whats the name of that PR guru (its a she) in the valley that everyone w**ks on about?

  • http://www.davidblerner.com davidblerner

    Thanks for another great post Mark- you've really become my favorite blog. This kind of real-world wisdom is very helpful and this last post definitely resonated with me. Keep it coming please!

  • dereklicciardi

    When we first set out to build our game, we announced to the world that we were going to build the next great massively multiplayer game. Press coverage ensued in large quantities. IGN, Gamespy and a few European web sites all picked us up. Every one of our developer diaries and newsletters were splashed all over the Internet. When we didn't get the funding we needed at the time, all of that PR and the expectations that went with it became a huge weight on our shoulders. We had and continue to have a good size following on our web site that was built from the initial PR we received but the price for that PR is continued maintenance of our online community. We learned a lot from that initial experience.

    Today, we run under the radar for the most part with the exception that we recognize the fans that follow our game need updates on our progress. They bought into our concept from the onset and stuck with us over the years and I feel like, I owe it to them to update even if it's not the best news. That original PR continues to be part of our current operations to this day. Some days, I think it is too much to handle while juggling everything else. But most days, I'm grateful for the dedicated fans that have been following us religiously for these years. They force me to think about how my actions might be perceived by our future customer base. So PR is a balance like Mark says. It's all about when you need to engage and what you're trying to accomplish with it. What I wish I would have known before is that in today's world of social networking PR, most of your PR will remain with you for many years to come and is readily visible with a simple Google search.

  • http://bothsidesofthetable.com msuster

    Thanks for your input. Spot on. Listen, I think what is important is to have a GREAT product built before you tell the world. I think PR is vital to the success of startups but don't come out of the gates too early. You'll always be racing to catch up to the expectations that the market has of you and will have competition before it is wanted.

  • http://bothsidesofthetable.com msuster

    Richard, thanks for the question. You'd be surprised by how attuned VCs are to the tech press (and vertical industry press if they are sector focused). Often bigger VCs have more junior staff that call into companies. I consider this more of a “fishing expedition” and am personally wary of it. But you may very well land on a partner's radar screen, too. Always best when either they're calling you or they know of you by the time you turn up. But for most people, good old fashioned VC intros are the way to go (sitting and waiting to be discovered is a lonely business!)

  • http://bothsidesofthetable.com msuster

    Thanks for the input, Fred. Agree 100%. And as for blog shout-outs – been enjoying your posts. Mostly in complete agreement. A couple of minor nitpicks that I keep meaning to write about but never find the time! But great to have some London VC bloggers – not many (who are at least not anonymous ;-). I lived in Old Blighty for nearly a decade.

  • http://bothsidesofthetable.com msuster

    Yes. I'm cheeky like that ;-)

  • http://bothsidesofthetable.com msuster

    Couldn't agree more. That's a post for a different day. Website conversion is everything. Press with no conversion are wasted dollars.

  • http://bothsidesofthetable.com msuster

    Mostly agree. But the press coverage does help to shape VC perception if used in the right way. No VC will admit to that but I'm 100% sure it's true.

  • http://bothsidesofthetable.com msuster

    Can't remember her name but I read a whole NY Times piece about her. Can't say that I have met her or worked with her. Not my thing.

  • http://bothsidesofthetable.com msuster

    Thanks, David. Appreciate the feedback. I'll do my best not to disappoint!

  • http://markgslater.wordpress.com markslater

    i think i read the same thing – your post got me thinking about her and how totally rubbish the whole article was…

  • http://markgslater.wordpress.com/ markslater

    whats the name of that PR guru (its a she) in the valley that everyone w**ks on about?

  • http://www.davidblerner.com davidblerner

    Thanks for another great post Mark- you've really become my favorite blog. This kind of real-world wisdom is very helpful and this last post definitely resonated with me. Keep it coming please!

  • sudhi

    So true -PR matters – but what is important is “STUFF”.

  • dereklicciardi

    When we first set out to build our game, we announced to the world that we were going to build the next great massively multiplayer game. Press coverage ensued in large quantities. IGN, Gamespy and a few European web sites all picked us up. Every one of our developer diaries and newsletters were splashed all over the Internet. When we didn't get the funding we needed at the time, all of that PR and the expectations that went with it became a huge weight on our shoulders. We had and continue to have a good size following on our web site that was built from the initial PR we received but the price for that PR is continued maintenance of our online community. We learned a lot from that initial experience.

    Today, we run under the radar for the most part with the exception that we recognize the fans that follow our game need updates on our progress. They bought into our concept from the onset and stuck with us over the years and I feel like, I owe it to them to update even if it's not the best news. That original PR continues to be part of our current operations to this day. Some days, I think it is too much to handle while juggling everything else. But most days, I'm grateful for the dedicated fans that have been following us religiously for these years. They force me to think about how my actions might be perceived by our future customer base. So PR is a balance like Mark says. It's all about when you need to engage and what you're trying to accomplish with it. What I wish I would have known before is that in today's world of social networking PR, most of your PR will remain with you for many years to come and is readily visible with a simple Google search.

  • http://bothsidesofthetable.com msuster

    Thanks for your input. Spot on. Listen, I think what is important is to have a GREAT product built before you tell the world. I think PR is vital to the success of startups but don't come out of the gates too early. You'll always be racing to catch up to the expectations that the market has of you and will have competition before it is wanted.

  • http://bothsidesofthetable.com msuster

    Richard, thanks for the question. You'd be surprised by how attuned VCs are to the tech press (and vertical industry press if they are sector focused). Often bigger VCs have more junior staff that call into companies. I consider this more of a “fishing expedition” and am personally wary of it. But you may very well land on a partner's radar screen, too. Always best when either they're calling you or they know of you by the time you turn up. But for most people, good old fashioned VC intros are the way to go (sitting and waiting to be discovered is a lonely business!)

  • http://bothsidesofthetable.com msuster

    Thanks for the input, Fred. Agree 100%. And as for blog shout-outs – been enjoying your posts. Mostly in complete agreement. A couple of minor nitpicks that I keep meaning to write about but never find the time! But great to have some London VC bloggers – not many (who are at least not anonymous ;-). I lived in Old Blighty for nearly a decade.

  • http://bothsidesofthetable.com msuster

    Yes. I'm cheeky like that ;-)

  • http://bothsidesofthetable.com msuster

    Couldn't agree more. That's a post for a different day. Website conversion is everything. Press with no conversion are wasted dollars.

  • http://bothsidesofthetable.com msuster

    Mostly agree. But the press coverage does help to shape VC perception if used in the right way. No VC will admit to that but I'm 100% sure it's true.

  • http://bothsidesofthetable.com msuster

    Can't remember her name but I read a whole NY Times piece about her. Can't say that I have met her or worked with her. Not my thing.

  • http://bothsidesofthetable.com msuster

    Thanks, David. Appreciate the feedback. I'll do my best not to disappoint!

  • http://markgslater.wordpress.com/ markslater

    i think i read the same thing – your post got me thinking about her and how totally rubbish the whole article was…

  • dereklicciardi

    Wow, this is the third time I type this. :( (two browser issues caused refreshes) I wanted to reiterate that I don't think the early PR was necessarily a bad thing. There's definately some good that has come from it.

    1) We have a loyal fanbase. These fans know that we have not acquired funding yet, yet they follow us to this day. The day we announce funding of any sort, they will rapidly recruit others to begin following our development progess. The first of many steps of customer acquisition is nearly done for us.

    2) Because of this fanbase, we've managed to avoid all the “get-rich-quick-schemes” that mar the image of the Zygna's of the world. http://www.techcrunch.com/2009/10/31/scamville-… Without a product on the market, our word is all those loyal fans have to go by and as I mentioned in my first reply, that forced us to consider carefully, our business actions and our future PR. (blogs, twitter…) To date we've never violated that trust with our community and won't in the future. I'm not sure I'd have the same appreciation for our community had I not had to manage ours for so long. It's definately helped us become more customer-centric versus Zygna's revenue-centricity and I believe that will pay off in the end.

    3) Lastly, we've built a brand. Our game is a massively multiplayer game with strong social game play elements and always has been. If I were building our brand from day one today, we'd have to fight the “scam” perceptions that Facebook massively multiplayer games have brought to the media's attention. We have a brand. We're a known quantity and as such those that follow us know and trust our brand. Building a brand takes time no matter what size it is. I'm glad we have that brand and I'm glad it was established long before the current news.

    So in the end, the PR might have left us with a community to manage but it resulted in the hardening of a brand, a loyal following and a customer centric business philosophy. I can't say that those would have existed as strongly had I built the product and then took it to market.

  • sudhi

    So true -PR matters – but what is important is “STUFF”.

  • Saul_Lieberman

    I'm cheeky too. But I guess you and I draw different lines for ourselves.

  • http://bothsidesofthetable.com msuster

    Yes, but I've known the guy for 18 months

  • Saul_Lieberman

    I'm cheeky too. But I guess you and I draw different lines for ourselves.

  • http://bothsidesofthetable.com msuster

    Yes, but I've known the guy for 18 months

  • http://www.vumedi.com Roman Giverts

    Sorry, but I think this is total non-sense. This logic is exactly the problem with good PR and why it can be disastrous (see my own comment below). Replace every instance of “press coverage” with “customers” and I agree. I would much rather cite my customers than an a journalist. This logic that pr is great especially when you are down and not getting traction is so terrible. You're not getting traction because your product probably still sucks. You should listen to the people telling you it sucks and try to fix it, not a JOURNALIST who liked it.

    The day I say “screw you, I have this glowing article written about me,” is the day I fold my company. I prefer “screw you, this customer just paid me 500k upfront for my incredibly valuable service/software.” Now that's worth a press release!

  • http://www.vumedi.com Roman Giverts

    This is such a great post, and I can't believe these points are not made more often by more VCs. It reminds me of this time I went to a small lunch event at a very top tier firm on sand hill (one of those bullshit events where they pretend to help young entrepreneurs but the real goal is to find companies in their infancy and source deals). Anyway one of the partners was giving us advice about how much they like to see companies be written about in techcrunch and other blogs before they invest. Everyone was sucking it in… I though it was crazy. Can you even imagine having an investor on your board saying “we need to change this feature because Mike Arrington doesn't like it?” That firm (or at least that partner) lost all credibility in my book.

    I think good PR is ironically a death trap and can lead to the demise of companies. At least three reasons why:
    1) Companies have inadequate products but don't know it because journalists, who by definition cannot be indicative of your customers, tell them their product is great. The problems persist and are never solved because of the positive pr.

    2) Some entrepreneurs can get complacent from positive pr. This type of public endorsement and praise gives people that warm fuzzy feeling inside, which I think all entrepreneurs are really after. They feel warm and fuzzy yet haven't hit a single milestone. When they should be fighting for their company's life, they are busy feeling warm and fuzzy… until it's too late.

    3) I once asked an entrepreneur what the distribution strategy was for his company's product. He told me: “keep getting PR.” Good PR may bring in some leads, but assuming this is a sustainable way to distribute
    your product is a death trap.

  • fpeyre

    Roman,
    I totally agree on the “warm and fuzzy” feeling… I also think that it's a perk of the entrepreneur lifestyle but it can be very addictive and totally destructive… Very good point.

  • Roman Giverts

    Sorry, but I think this is total non-sense. This logic is exactly the problem with good PR and why it can be disastrous (see my own comment below). Replace every instance of “press coverage” with “customers” and I agree. I would much rather cite my customers than an a journalist. This logic that pr is great especially when you are down and not getting traction is so terrible. You're not getting traction because your product probably still sucks. You should listen to the people telling you it sucks and try to fix it, not a JOURNALIST who liked it.

    The day I say “screw you, I have this glowing article written about me,” is the day I fold my company. I prefer “screw you, this customer just paid me 500k upfront for my incredibly valuable service/software.” Now that's worth a press release!

  • Roman Giverts

    This is such a great post, and I can't believe these points are not made more often by more VCs. It reminds me of this time I went to a small lunch event at a very top tier firm on sand hill (one of those bullshit events where they pretend to help young entrepreneurs but the real goal is to find companies in their infancy and source deals). Anyway one of the partners was giving us advice about how much they like to see companies be written about in techcrunch and other blogs before they invest. Everyone was sucking it in… I though it was crazy. Can you even imagine having an investor on your board saying “we need to change this feature because Mike Arrington doesn't like it?” That firm (or at least that partner) lost all credibility in my book.

    I think good PR is ironically a death trap and can lead to the demise of companies. At least three reasons why:
    1) Companies have inadequate products but don't know it because journalists, who by definition cannot be indicative of your customers, tell them their product is great. The problems persist and are never solved because of the positive pr.

    2) Some entrepreneurs can get complacent from positive pr. This type of public endorsement and praise gives people that warm fuzzy feeling inside, which I think all entrepreneurs are really after. They feel warm and fuzzy yet haven't hit a single milestone. When they should be fighting for their company's life, they are busy feeling warm and fuzzy… until it's too late.

    3) I once asked an entrepreneur what the distribution strategy was for his company's product. He told me: “keep getting PR.” Good PR may bring in some leads, but assuming this is a sustainable way to distribute
    your product is a death trap.

  • http://florentpeyre.net/ Florent Peyre

    Roman,
    I totally agree on the “warm and fuzzy” feeling… I also think that it's a perk of the entrepreneur lifestyle but it can be very addictive and totally destructive… Very good point.

  • David Smuts

    Roman- I really liked your comment here. It reminds me of a company I used to consult which was on the OTCBB and all they could do was spout out a press release every week about this big name person, university or hospital etc…, looking at their product. They had ZERO sales!!!! But they sold shares on the back of worthless PR. I could never do that to shareholders.

  • David Smuts

    Conventional wisdom says I shouldn't be commenting now on a blog article 5 days old, but this is just such an important topic which Mark kicked off here and the comments coming back from Entrepreneurs with real life experience on this just forces me to pitch in again!

    Roman asks: “Can you even imagine having an investor on your board saying “we need to change this feature because Mike Arrington doesn't like it?”

    The problem Roman, is YES I can imagine this!

    This does happen. Whilst we are focusing our comments on educating Entrepreneurs about some of the drawbacks of PR, it's important that we raise this awareness with VCs/Investors too. I don't taint Mark Suster or other Entrepreneurial VCs with this brush but there are far too many VCs who do get off on the whole external PR thing. I've seen it happen over and over.

  • http://bothsidesofthetable.com msuster

    Awesome. Couldn't agree more.

  • http://bothsidesofthetable.com msuster

    Your comments are spot on. The death of an entrepreneur in front of a VC is to talk about customer acquisition in terms of merely good PR.

    Also, unfortunately, inexperienced entrepreneurs fall into the trap of believing their hype. I even wrote a blog post about this called “Don't Drink Your Own Kool Aid” http://www.bothsidesofthetable.com/2009/09/13/d

    thanks for your input. Valuable contribution to the discussion.

  • http://bothsidesofthetable.com msuster

    Positive PR = crack cocaine for an inexperienced an undisciplined entrepreneur

  • http://bothsidesofthetable.com msuster

    Screw conventional wisdom. That's what I'd like to change the title of my blog to! Hey the VC industry as a whole falls prey to the “lemming effect” and yes, too many people take their cue from Michael Arrington or TechCrunch coverage. I think Michael is about the best tech journalist out there – but TC coverage should not be a proxy for product design – customer input and data should!

  • David Smuts

    “Screw Conventional Wisdom” sounds like the forthcoming and eagerly anticipated book on succedding in Entrepreneurship by Mark Suster. Do I get a signed copy?

  • http://bothsidesofthetable.com msuster

    Signed and free, my friend ;-)

  • David Smuts

    Or how about just: “Screw Convention” – double-entendre titles always sell more

  • David Smuts

    Roman- I really liked your comment here. It reminds me of a company I used to consult which was on the OTCBB and all they could do was spout out a press release every week about this big name person, university or hospital etc…, looking at their product. They had ZERO sales!!!! But they sold shares on the back of worthless PR. I could never do that to shareholders.