Why Startup Demo Day Is Like The Film Festival
I recently spoke about the process of securing funding and publicity for feature films with one of the producers being nominated for an Oscar at tonight’s Academy Awards. Mitchell Block, a professor at USC, produced the Oscar nominated short subject documentary Poster Girl with a more logical approach to the business of film than most typical starving artists. Block explained that the commonly perceived “normal” approach to producing a film is to complete it though post-production first, then hope to secure financial backing from the film companies present at one of the various world-renown film festivals. While the majority of highly capable film students and artists take this approach to creating their films, Block emphasized the backwardness flawing this course of action due to the unprobable success rate.
Instead, Mr. Block highlighted his extensive portfolio of various short documentaries as a model for which other budding producers should follow. Block said that every time he creates a new feature film, his first objective is to secure the financial backing from a film studio. In the case of Poster Girl, he leveraged his film industry contacts to submit a shortened and unedited clip of the documentary to HBO, who promptly funded the project. Thus, Poster Girl had received the necessary support from HBO to ensure the proper financial and publicity resources to promote the film once post-production was complete.
This exploration of the film industry with Mr. Block gave me the revelation that startup companies often go through a similar process. Essentially there are a bunch of ramen-eating hackers building their ideas in anticipation that during a “demo day” or launch conference so-to-speak, investors will be lining up at their table with a newly inked check in hand. I view these “demo days” as the film festivals which leave many talented visionaries out of touch with any potential in their product. Instead of spending weeks or months developing a minimum viable product, the hackers should put on their top-shelf thrift shop suit and sell their idea to investors.
With the necessary idea-validation and support from venture capitalists, hackers and founders can then focus on building their vision rather than winning attention at a tech meetup. There is undoubted merit in the application process to events such as TechCrunch Disrupt and Launch Conference, but the future success of all companies on stage is rare. Startup accelerators such as Y Combinator realize this methodology produces stronger startups on average because they are only buying into the ideas that they know will work, and especially sell for a high valuation on their own demo day.
