When venture capitalists search for companies to invest in, they are counting on the competence of the founders and the entire team to win. Meaning, if there are more hints that this company will result in failure than it will success, it's unlikely they will invest in it. They look for indicators to assess worthy startups.
A similar and time-tested method is seen in the duck test coined by James Whitcomb Riley. You've heard it before, "when I see a bird that walks like a duck and swims like a duck and quacks like a duck, I call that bird a duck."
Now let's apply this to a startup, specifically two kinds of startups. One that is a good investment and one that is a risky investment.
A startup that walks like a good investment
The manner by which a startup carries itself says a lot. This includes outward appearance and poise. If you look like trash or are missing key pieces of attire, expect the reception of your appearance to follow suit. For example, not having a website in the 21st century is the equivalent of showing up to a party without pants. You're missing something and it reveals a hole in your competence. Same could be said of the design of your product or your branding. Negligence of these is reason to believe that you are not a worthwhile investment.
A startup that swims like a good investment
A duck's primary function is to swim. They are very good at it. Similarly, a startup's job is to make money through having a worthy offering. There needs to be proof of this. If you don't have a solution to a prevalent problem that will make a difference, customers will not use you. If customers don't use you then investors can't either. If you want revenue, of any kind, you need something worth giving up money to have.
A startup that quacks like a good investment
Trickier than the last two, but important nonetheless. A duck's quack is the outward expression to signify "I AM A DUCK." What's a startups outward expression? "I am valuable to others." Meaning, people will pay for what I have to offer because it is more valuable than their money. The brevity of a quack is just as important. The more succinct, the easier it is to identify. This comes in the form of positioning and high-level brand messaging. Failure to define your quack will make it difficult for investors to identify you as a good investment.
If it walks like a worthy startup, swims like a worthy startup, and quacks like a worthy startup... it must be a worthy startup. Worthy of customer buy-in and investor money.
Can you pass the duck test?
One of my closest friends lives in London, but he's in San Diego now for his sister's wedding. It was a pleasant surprise. I hit him up and he told me he'd only be in town until tomorrow evening.
Tomorrow evening!? Dang, that's not a lot of time to get together.
I checked my calendar and saw a bunch of scheduled items. All of them are black, so there's no distinction between them. How could I have scheduled so much stuff on one day?
Cue color coding. I created some alternative colors to use to showcase different meeting types I have. Red for in-person and green for digital meetings.
Sure enough, I have three red items today. That's a lot of meetings in a very short amount a time. Don't get me wrong, I love people (a lot more than most designers, I'd think), but this showed me that I'm spreading myself thin for time. This burns the most when I don't have flexibility to see friends from out of town because of it. Something had to change.
So I set a rule: if I see two red/green slots in one day, that's it. No more. A red flag, if you will.
Color-code your calendar.
"What do you mean?" is the most common response when I tell people I work with rebels.
I proceed to tell my core belief that being different is more important than being better. But there's more to it than that. What drives this core belief home is that I live it. Perhaps not in gigantic ways, but here are a couple examples:
I refuse to be on Facebook and Instagram.
I don't drink or partake in other substances.
I rarely take calls or meetings in the morning.
I plan on staying a small company for the foreseeable future.
These are stories about who I am as a person that seep into my business as well. Stories like these are strong because they are genuine, I don't have to put on a face to live out the truth I proclaim.
When you build your brand, tell your story. Open up your ugly, the things people will think you are weird for. I guarantee there are people who will not like it, but the flip side is that there will others who appreciate it.
Tell YOUR story. Not the one you think people want to hear.