I recently celebrated three years at Connect, the Swedish angel investor network. My job is to coach startups in raising their first pre-seed / seed rounds.

In my work I see a clear pattern of three levels of investment maturity among the entrepreneurs. No matter how fantastic your idea or product is, you need to pass these three levels of investment readiness to raise an investment round. Call it the investment readiness maturity process.

Level 1: Product Lover

I meet almost 100 startup entrepreneurs every year. Most of them make the same mistake spending 90% of any pitch time talking about their fantastic product.

Product Lover Pitch:
“Look — I built this fantastic new CRM system. Look how well it shifts header colors when you scroll between different user groups. It also has spelling autocorrect. And integration with Dropbox, Salesforce, Google Drive and Hubspot. Here are ten slides I filled with USPs. I need a seed investment of €0.5M to launch and market it. Everyone will sign up, since it such a good CRM system”

Most of the entrepreneurs I meet are passionate product owners. Passion for your product an important ingredient for long-term success. But just product passion won’t get you far with the investors.

Level 2: Market Explorer

The second level of investment maturity is about realizing that the product/market fit is more important than the product in itself. The most successful startups I meet always start with the market first. Then they go and create a great product designed solely to solve a market problem they discovered. Understanding your target market is a huge bonus with the investors.

Market Explorer Pitch:
“Look, I’ve been working as a Key Account Manger at this marketing firm for five years and our main headache was that our CRM system was disconnected from all other tools. We had to manually copy-paste presentation material and information between different notes, emails and CRM. I did some calculations back than show that we lost on average 5 hours a week per employee by doing this. And my friends working at the other agencies in town had similar issues.

So we prototyped a new connected CRM system and invited my former CEO and some other marketing agents to try it out. They all love it, keep using it though it’s only a beta and we now have 60 more people on the waiting list.

We benchmarked to other competitors and asked our users — our research show we can charge € 15 per month per user. An average agency would be paying us €150 / m. There are 1500 agencies in our segment in Sweden alone. If we sell to 20% of them our turnover would be € 540,000 per year. We also looked at market entry price points in Norway and Germany. Those would be our next target markets.

So I need €0.5M to hire three b2b sales people, four more developers and set up a resale partnership with a major IT company that would be selling our CRM as part of their portfolio.

This entrepreneur has a 5x higher chance to get an investment by proving that there is a market for the product. Recent interviews with angel investors from our Connect angel network show that previous experience from your target market might be the most important reason why an investor decides to back your company.

Level 3: ROI Master

Let’s be honest. Pitching investors is really a sales meeting. You are “selling” a share of your company, promising them a fun ride and a 5–10x return on investment if you succeed to make it all the way to an Exit together.

So put yourself in the investor perspective. They can either:

A. Have their money in a low-risk index or hedge fund generating an average 2–7% return annually. And the flexibility to sell their shares and take the money out any day.

B. Lock in their money in your company (at a much higher risk) and aim for 5–10x ROI (return on investment) in 5–10 years. But almost no chance to take out their investment until the end. Plus a high risk to never see the money again.

Which one would you choose yourself? Obviously, you might be inclined to B only if the entrepreneur in front of you has an almost perfect plan of how she will generate the 5–10x ROI and return your money.

ROI Master Pitch:
“So as you see we have quite a demand for our connected CRM product. With 3 sales people a large scale integration partner we will be able to take 20% of Swedish market within 24 months and be ready to enter Germany and Norway. Our turnover will reach €0.5M by the end of year two if we play our cards right.

Then will for sure need at least a Series A (€4M) to take a strong position in European market and enter US and Middle East. The VC round will dilute us further leaving YOU with just 11–15% of the shares. But similar companies got acquired by big players like Microsoft, Salesforce and Atlasian for very large amounts. If we succeed and push it all the way to the Exit or get listed our Market Value will be at least €40 M meaning you will make at least €4,4M off your €500,000 invested. Let’s make it happen together!

This entrepreneur did her homework: the forecasts, the future capital needs, the research, and benchmarks for future exits. Her chance to get an investment here is 10 times higher than at a pure product pitch.

So please do yourself a favor, do your homework and complete all 3 levels when preparing your presentation. Make sure to spend at least 33% of your presentation talking about the market and 33% about the investment opportunity and potential ROI. Also, make sure that the numbers add up.

Bonus: My Pitch Deck and investement readiness lecture at Hetch incubator

Alex Esser - Investment readiness and pitch decks

In my work with business angels and startups, we are obsessed with finding the new disruptive companies developing new high-level tech innovations. We are constantly scouting new startups try to find the future Spotifys, Teslas, Apples and AirBnbs. It’s a unicorn hunt.

What if an entrepreneur starts a traditional business. Let’s say it’s a cleaning company. And works so hard and scales so well that the cleaning startup reached 5 X ROI (return on investment) in five years. This is not “innovation” according to the industry, but still very much entrepreneurship. Sometimes it’s less risky and more economically rewarding to run a “traditional work hard” company.

It’s ok to be obsessed with innovation. But we must never forget to recognize and praise all types of entrepreneurship. Both high-tech and low-tech.

I also run a music festival called Backyard Sessions and a record label called House Music With Love. They both are growing slowly and require a lot of attention and love. Here it’s all about team work. I’m nothing without my people.

I also do some small angel investments of my own.

ADHD lifestyle anyone?

The summers are full of adventures. We humans become truly mobile, creative and flexible in the summertime. In summer it does not matter how I dress, any t-shirt works when it is 28 degrees outside. It does not matter when I go to bed. It is so easy to get up with the morning sun shining outside and no meetings booked. The staff at my kid’s daycare does not care if we drop her off 30 minutes too late.

Then what happens is the somewhat traumatic shift back to “normal” work-life after the vacations. Suddenly my calendar is getting full of meeting requests, the TODO list grows exponentially and I oversleep since I forgot to put on the alarm on. Then suddenly I don’t have any clean shirts to wear to my meeting.

Here are my personal ideas on how to shift back into work mode after a long summer:

1. Go to bed early — Get up early

Summer nights are light and beautiful. But once I shift back to work mode it’s so easy to get stuck in front of the laptop in the evening just to do “that one more thing”. So no work related screen time for me after 10 p.m. I’d rather read a book or watch a documentary with my partner. Going to bed between 10 and 11 pm leaves room for really early mornings.

I usually try to get up at 5 or 6 before the rest of my family is awake. This way I get my very own 2 hour private time window to meditate, do my morning journal and to work out.

2. Get back to your routines

Find the order in chaos. I try to get back to my routines if they got lost in the summer heat. Prepare the clothes you gonna wear tomorrow the evening before. So you don’t have to think. Pack your bag the night before. Iron all your work shirts before the hectic weeks start. I make sure to meditate every morning and go to the gym in the morning before work every 2–3 days.

3. Meditate in the morning

It’s hard to sit still for even 10 minutes if you have ADHD. But this one makes miracles for the rest of the day. Start slowly with 5 or 10 minutes every morning. Extend the time length gradually if needed. Try to focus on your breath. Don’t get angry with your mind racing around and thinking up hundreds of things. Just acknowledge and let them go, shifting back your attention to the breath. Repeat every morning.

I also practice Wim Hof breathing every morning to start the day well oxidated. I try to go to the gym early in the morning every second day for a quick 40–60 min workout before work.

4. Accept that its gonna be tough for a few first weeks

Nothing is perfect. I know I might feel down and unmotivated some first mornings. I will forget to pack my lunch box one of the days. And I will get behind schedule a few times. Everyone is struggling for the first 2 weeks. Don’t blame your self and make it a slow start instead.

5. Keep your space and your mind clean.

I keep my desk, my bedroom and my bag clean. No laundry laying around on the floor. No receipts or paperwork on the desk. I double-check my bag every two days for accumulated clutter making sure nothing but my laptop, my business cards, my notebook, chargers and a few pens are there. I make our bed every morning when getting up. A clear space helps a lot to keep your mind clear and focused.

We are back from once again a life-changing week at Borderland.

One way to describe it is as a festival co-created by 3000 people. Borderland is a Nordic gathering in Denmark, inspired by and following the 10 principles of Burning Man, is always one of my absolute highlights of the year. 3000 hippies, startup-ers, engineers, punks, DIY creators, kinksters, musicians and artists building up a city full of music stages, bars, mobile cafe’s, tantra tents and art installations for one week in the Hedeland national park in Denmark. None of these are created by a central team or any kind of leader or authority, the whole city and all the content is created by the participants, either in camp teams of 20–40 people or by sole creators. No money is being exchanged at the festival. Everything is for free, the gifting culture is always there but never taken for granted. Everyone is self-reliant when it comes to food, water and infrastructure. If anything needs to be done, someone will take a lead and make it happen. Otherwise, it’s not important enough.

The Burning Man set-up can’t be copied entirely to our everyone world quite yet. Removing the money and the centralised leadership would throw most of our society into chaos. But gradual change, social and structural experiments like Burning Man, Teal and un-events are most certainly necessary for our continuous social evolution.

My takeaways of this year are:

1. Always be nice and helpful to the people you meet. No matter what they look like and how much they diverge from the societies norm. Just because some of us got fancy suits and work in skyscrapers doesn’t make us any better than anyone else.
2. What is success?
   Success should be measured by how much you are able to help others and how much change you can (co-)create in the society around you. Being an expert / rich / famous in your field but without affecting other people and without driving change is actually meaningless. Of course, it’s not bad to make some money along the way in your profession, but your number one measure of how successful you are, should always be by how much change and impact you are able to create. If you don’t feel like you are driving any change or helping others in your everyday job, quit it and do something else and more rewarding instead.

We just wrapped up the first annual Backyard Sessions XL Festival here in Malmö. It was a bit of organisational experiment with completely transparent budget, both with whole team and all the partners, and decentralised decision making. (Read more about Teal / Reinventing Organisations Theories)

The summary:

These are my experiences from running a project for nine months in Teal Mode:

• Teal removes the traditional “bunker wars” found in traditional companies; where management and different VPs come up with completely opposite (one very optimistic and one very cautious) versions of the annual budget and then struggle to meet in the middle.
• Teal gives every team member full understanding of the companies overall situation, making the team solve problems together rather than “blaming that other department”.
• Teal empowers everyone involved, making the organisation agile and quickly adoptable at every given moment.
• Teal makes the organisation more human.
• It’s easier to set up a new project or company like ours in Teal mode from the start. But I firmly believe it also can be applied to more traditional (smaller) companies and department by department in large companies.

The Setup:

You need two important presets to operate in TEAL mode:

Step 1. Open up the budget completely, make it look sexy and easy to grasp.

Use Google Spreadsheets for easy sharing. Use color background for costs (red) and revenues (green). We run an open and editable budget spreadsheet for 13 team members and three external partners.

Use further color backgrounds for different cost types. Move the current financial status (costs / revenues / break even) to the very top so it’s the first thing you see when checking the document. Make sure to keep it updated, ideally daily, so everyone involved can follow the live ticket sales and new costs added.

Step 2. Move the decision making from the center of organisation out to every team member and their responsibly area.

Every team member has FULL mandate in her / his responsibility area (bookings, design, decoration, marketing, kids village, safety & security, social media, etc). The only requirement is that area responsible asks the team for advice BEFORE making a cost heavy decision. For example to invest €1000 in Facebook ads, hire a subcontractor or buy 30 giant disco balls. Once the advice has been given the responsible team member still has the ultimate choice to follow or to ignore the advice.

Step 1 is crucial for empowering everyones trust with economics and context of the project, “The playing field”. The context changes rapidly in a volatile project as a festival (sponsor deals, artist availability, ticket sales, weather, etc). So step 2 is crucial for empowering and motivating every team member to operate fast, responsibly and become the true owner of her/his responsibility area. With full access to overall budget (Step 1), no irresponsible decisions will ever happen as every team member has full understanding of how such a decision will affect the overall outcome. It’s a trust & safety mechanism in one.

Lessons learned

• TEAL is a perfect framework for working in a volatile environment where you want the team to dare to experiment, be agile and adaptable. Costs can be cut quickly when needed, by gathering everyone around an already open budget.
• Decentralized decision making makes everyone operate quickly like one living organism with no top-down decision bottle necks.
• This set-up is ideal for newly launched projects like in our case where many team members are busy with other daytime jobs (full time or part time) and can’t attend regular meetings or sit in the same office.

Tips for implementing TEAL:

• Make a sexy, fun looking budget. Expect a dozen of people with different backgrounds accessing it. Use colours and focus attention on the most important items like current financial status.
• Prepare to kill your darlings. Each team member has the ultimate mandate for decisions in their area. As leader/project manager/CEO you may not overrule them.
• Find the right communication platform for different people. We used a mix of Slack, Email, Google forms and Facebook groups. Over-communicate rather than under-communicate.
• Add 20% unexpected costs item to the overall budget.
• Be brave and don’t look back.

Upgrading Backyard Sessions to a full scale festival was one great success. We are overwhelmed by positive feedback from our guests, volunteers, partners, sponsors and subcontractors. Everyone involved is already excited about the the next year’s edition. Financially we turned over €85,000 during the festival weekend and missed the break-even target by just €3,000 (3,5% loss of total revenues).

Some more photos from Backyard Sessions 2017:

Yesterday I found a 100,000 SEK check in my friend Erik’s apartment. The money that our startup (Tunaspot) was awarded some five years ago in Venture Cup, a Swedish business plan competition . I remember how we celebrated all night long. Then we evolved Tunaspot into one cool company and run it for a few years.

The problem is I tend to forget my successes when moving on to new projects and problems to ponder.

To be honest with you, despite quite a successful track record, I very often find myself doubting my own abilities. Doubting them big time. Quite often I find anything and everything I do simply not good enough. “Oh only if I did it that way and double the growth”. “Oh look at those guys, they are making [insert number] per year on their label, we are just breaking even”, “Look at my old friend, he is my age, but got a more successful law career and a giant pay check every month”. Actually, I’ll tell you a secret: Sometimes I even find myself questioning my whole existence and wondering if any of the choices I’ve made during the last 15 years were any good.

Luckily I found a simple relief tool that helps me to instantly boost my confidence when in doubt and get back on the track. It’s called the Jar of Awesomeness. Every time I do something good, big or small I make sure to write it down.

The “Jar” can be physical or digital. Mine isan Evernote Document. I prefer Evernote since I can access it any time from my mobile, when I need a confidence boost like before going on stage.

It can also be an actual jar in your kitchen with post-it notes. Every time you achieve something awesome or experiencing a good moment, write down a few words about and put it in the jar.

My Jar of Awesomeness looks like this (samples):

• Raised €200,o00 from German investors for our start-up
• Launched Balanspodden — totalled 10,000 listeners
• Richie Hawtin contacts us personally re Tunaspot
• Taught Annabel to ride the bicycle
• Swim (A HMWL label artist) is number 1 on iTunes in Sweden
• Went to Borderland festival, built a camp.
• Paul Kalkbrenner praises one of our label’s releases in his Facebook feed.
• Finally found and returned those library books (thought they were gone forever and I’d have to pay a fortune).
• Made a really good three course indian curry and invited 10 friends over
• Sold out our Backyard Rooftop party
• Got a ride in a Tesla
• etc…etc.. etc…

Every time I start doubting myself I just quickly open the Jar doc and feel the confidence instantly returning. After all I’ve done some cool stuff before, so the current project (that I’m currently doubting) might end up successfully too. Or the next one. It’s like a breath of fresh air of calm and determination.

Try it out, start recording your big and small successes today, to be able to access and browse them anytime. Actually I find myself getting most happy and confident by reading about my small everyday achievements “Cooked a very nice dinner with friends” or “Taught Annabel to ride a bicycle”. More than from the work related ones.

P.S. Tunaspot was connecting music tracks and location. Like a cross-over between Spotify and Foursquare. We raised €200k, acquired som 100,000+ users and got a nice feature in WIRED magazine. Then 2 years later we shut it down after failing to find a sustainable business model. It was great fun though and many lessons learned.

Yesterday I found a 100,000 SEK check in my friend Erik’s apartment. The money that our startup (Tunaspot) was awarded some five years ago in Venture Cup, a Swedish business plan competition . I remember how we celebrated all night long. Then we evolved Tunaspot into one cool company and run it for a few years.

The problem is I tend forget successes like this one, while instead moving on to new projects and problems to ponder.

To be honest with you, despite quite a successful track record, I very often find myself doubting my own abilities. Doubting them big time. Quite often I find anything and everything I do simply not good enough. “Oh only if I did it that way and double the growth”. “Oh look at those guys, they are making [insert number] per year on their label, we are just breaking even”, “Look at my old friend, he is my age, buy got a more successful law career and a giant pay check every month”. Actually, I’ll tell you a secret: Sometimes I even find myself questioning my whole existence and wondering if any of the choices I’ve made during the last 15 years were any good.

Luckily I found a simple relief tool that helps me to instantly boost my confidence when in doubt and get back on the track. It’s called the Jar of Awesomeness. Every time I do something good, big or small I make sure to write it down.

The “Jar” can be physical or digital. Mine isan Evernote Document. I prefer Evernote since I can access it any time from my mobile, when I need a confidence boost like before going on stage.

It can also be an actual jar in your kitchen with post-it notes. Every time you achieve something awesome or experiencing a good moment, write down a few words about and put it in the jar.

My Jar of Awesomeness looks like this (samples):

• Raised €200,o00 from German investors for our start-up
• Launched Balanspodden — totalled 10,000 listeners
• Richie Hawtin contacts us personally re Tunaspot
• Taught Annabel to ride the bicycle
• Swim (A HMWL label artist) is number 1 on iTunes in Sweden
• Went to Borderland festival, built a camp.
• Paul Kalkbrenner praises one of our label’s releases in his Facebook feed.
• Finally found and returned those library books (thought they were gone forever and I’d have to pay a fortune).
• Made a really good three course indian curry and invited 10 friends over
• Sold out our Backyard Rooftop party
• Got a ride in a Tesla
• etc…etc.. etc…

Every time I start doubting myself I just quickly open the Jar doc and feel the confidence instantly returning. After all I’ve done some cool stuff before, so the current project (that I’m currently doubting) might end up successfully too. Or the next one. It’s like a breath of fresh air of calm and determination.

Try it out, start recording your big and small successes today, to be able to access and browse them anytime. Actually I find myself getting most happy and confident by reading about my small everyday achievements “Cooked a very nice dinner with friends” or “Taught Annabel to ride a bicycle”. More than from the work related ones.

P.S. Tunaspot was connecting music playlists till location. Like a cross-over between Spotify and Foursquare. We raised €200k, acquired som 100,000+ users and got a nice feature in WIRED magazine. Then a year later we shut it down after failing to find a sustainable business model. It was great fun though and many lessons learned.

Behaviour scientists claim that social apps like Facebook aim to create the same addiction building patterns as used in casino slot machines . Every time you open up Facebook it’s like pulling the lever “What did I get?”. New Notifications? New likes on my status? New Tags? New content to scroll?

The Facebook desktop version is even more of a trap. Every time I would go on Facebook on my laptop, trying to locate an important piece of information I would fail miserably. My focus would got captured by something in the feed and my eyes would be stuck there reading. Suddenly a chat window from a friend in US pops up. Another chat window pops up. 15 minutes later I would “wake up” trying to remember what I supposed to do initially. Back to the to-do list. Trying to start over.

Recognise the pattern? So decided to go on a cold turkey Facebook vacation for 30 days, here is how I did.

The Preparation

Step 1: If you need to keep working with a number of Facebook business pages. Create a fake profile without friends. Like all the pages you administrate. Login into you real profile and grant the new profile admin rights. DON’T follow any other pages than the ones you intend to administrate.

Step 2: Extract the necessary contacts. Figure out which people you will need to communicate with off-facebook. Get their emails / phone numbers.

Step 3: Create a profile picture and a banner showing that you are away.

Step 4: Sign out in your browser, mobile, tablet, messenger apps. Sign in with the new empty no-friends account for Pages access.

How did it go?

The first week was hard. Really hard. I would keep picking up my phone every 60 seconds only to realise I was logged out and not supposed to login. At one point I found myself getting addicted to other “Slot machine”-like apps. Like checking for new followers on Soundcloud every minute or so.

Gradually over week two and three I found myself more and more present and balanced. I would no longer keep flipping around with my Smartphone when socialising with friends or playing with my daughter. My attention span at work started to increase dramatically. I found myself working through my daily to-do list faster and smoother.

On the third week I also started to see the backside, how my work and personal relations would suffer if I would quit Facebook for a longer period of time. If you don’t make any digital noise, you kind of don’t exist. And FB Messenger is my primary channel to a lot of music industry partners.

So I decided to switch the FB messenger back on. I will still keep using the “fake profile” to admin all the pages in order to avoid all the distractions. I will only login to my regular account once a day for max 30 minutes to check out what’s going on in the flow and to post some news.

Lessons learned:

• The amount of productivity increase dramatically already after the first week. Avoid other rebound apps. :)
• I just can’t work / live without messenger. To avoid the timeline-pitfall, bookmark www.facebook.com/messages/ or www.messenger.com/ in your desktop browser to go straight to your inbox. No feed. No ads (yet). No distractions.
• Remove all the facebook bookmarks, avoid spontaneously opening Facebook in your desktop browser.
• Stop using Facebook sign-up to external sites (like soundcloud.com, smarturl.it etc). Switch to email + password.
• After 30 days I no longer care about the number of notifications, likes, tags etc I receive. Won’t be checking, caring about them at all. Freedom!
• I won’t be able to remove the FB app from my phone completely, but will keep logged in with my “no friends” just to manage my business pages.
• I will schedule “Facebook time” once a day, maximum 30 minutes. This is dedicated time to browse content, see what my friends are up to and to share content of my own.
• If you don’t wanna quit the cold turkey way, you can use some Chrome-plugin that make your feed a bit less distracting. Try Social Fixer or Tool Kit For Facebook.
• Buffer.com is a great tool for scheduling your updates without logging in.