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Woeful Websites: How to Guarantee Your Startup Won’t Get Funding

Xconomy National — 

You don’t have to work in venture capital to know that many biotech startups are having a difficult time raising money. The economy remains in the tank, and the former Olympic-sized pool of accessible cash now more closely resembles a wading pool. There are an enormous number of reasons why a company will have difficulty acquiring capital. These include unexplainable technologies, business plans crafted by devotees of Karl Marx or Scrooge McDuck, a lack of issued (or even filed) patents, or a management team just a few years removed from the lemonade stand or Federal prison.

One easy way to sink your start-up: anchor it to a woeful website. I’m talking about one that is so unprofessional and singularly uninformative that it will prevent you from raising enough money for a successful morning run to Starbucks (and that’s without the pastries). Count yourself fortunate if you’ve never come across one of these horrors. If you have, you probably found yourself wondering if they were trying to chase away investors and potential customers. I’ve found that these poorly crafted websites generally share at least some of the following unattractive characteristics:

1) No information provided as to the location of the company (cyberspace is not a physical address), the composition of the leadership team (with associated bio’s), a telephone number, or anything else that might help to convince me that the organization really exists somewhere in our universe. Instead, you often see a generic suggestion to “contact us at info@dreadful-biotech.com”. Why would I send you an email? If you think it would be to get more information, sorry. You already blew your first, best, and likely only chance to tell me about your new organization. Actually, your website did tell me about you, and the news report wasn’t good.

2) No description of the technology that the company is built around. No clear business model. No drugs and no devices. No reagents. No service plan. Nothing to buy, nothing to rent, and sometimes nothing to read. I’ve come across sites that have hardly any text at all. The sad and lonely space is filled with only a single graphic, which, if you’re lucky, will be a stock image. Illustrations on a few sites look like someone’s 5th grade daughter drew them after she got bored with the purple ponies. I’m displeased to find that the website is boring, but even worse, I’m ticked off that it tells me nothing about your company. Is this really your best effort to promote your start-up? I worry that the same lack of commitment to doing things right will carry over to your R&D, your business plan, and every other aspect of your corporation.

3) The “couldn’t possibly be deader” primary link. Typing in the URL that is supposed to take you to the company website instead dumps you onto a generic hosting webpage. Failure to pay the $10 domain name registration fee is a crystal-clear sign that management is not firing on all cylinders. When this happens, I simply delete the link and move on. I’m sure I’m not the only one that does this. Keep in mind that there are only a limited number of angel investors on the Forbes 400 List of Obscenely Wealthy People with Offshore Bank Accounts, and you can’t afford to piss any of them off. Don’t count on the next Mega Millions jackpot drawing coming up with your favorite numbers either. Buying lottery tickets is not a substitute for finding qualified investors, nor are you likely to meet any while standing in line to buy these tickets at the Kwik-E-Mart.

Putting together a professional looking website these days is really not that difficult. You don’t need snazzy animations, layered floating menus, or other high tech tricks. Many web hosting and software companies offer free templates that can easily be adapted to your needs with a minimum of effort. If you’re a start-up, free works! Who would invest their hard-earned cash (or for that matter, someone else’s) in an organization that cares so little about itself that it would post an electronic eyesore? I understand that many companies start by reserving a website as a placeholder, but if you decide to do this, don’t share the URL with anyone until it is ready for primetime. Remember that you never get a second chance to make a first impression. Unless, of course, you’re Charlie Sheen or Lindsay Lohan, but hopefully your drug discovery efforts will be markedly different from theirs. Make a serious effort to have an attractive, informative, and useful website. As Rene Descartes put it, “it is not enough to have a good mind, the main thing is to use it well.”

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  • Jeff Protentis

    I believe in the overarching message of this article: web sites are THE KEY to successful commercialization. This article, though, does not deal with the single most important issue: the value proposition. Even if the site looks appealing, the pages have writing, etc, what it tells people about the company and its products or services must “hit the mark”. Telling what you do is good but it’s as/more important to tell HOW you help and WHY they should use your solution or the site will not have the desired effect. Sell a solution, not a technology. (Jeff Protentis; Genovative Solutions)

    • http://www.xconomy.com/san-francisco Wade Roush

      Jeff: You’re right, of course, that even having a great website can’t paper over the lack of a real value proposition. But the way I read Stewart’s piece, he’s basically warning entrepreneurs against doing a bunch of work to build a valuable business, and then neglecting to present it to the world in a convenient and compelling way. As a journalist who spends a lot of time trawling websites for background information on technology companies, I think Stewart is right on target. A shocking number of companies forget to do basic things like posting address or contact information on their sites. (That’s especially important for us at Xconomy, since we focus on six specific innovation hubs and the first thing we need to know is where a company is based.)

  • http://twitter.com/Luke_Deering Luke Deering

    Hi Stewart love your posts, this is definitely going into our resources bank, great article on what not to do! I wanted to introduce you to our new blog HowToWriteABusinessPlan.com here we interview startups that have recently graduated from an accelerator program. They are mostly European companies, since we are in England, but we have some great new companies up their that you might find to be pretty awesome. Check us out!

  • Roger Ramjet

    As I remember, the SmartCells web site provided almost no useful information beyond that which was already public elsewhere.
    The description of the technology was (apparently purposely) vaugue, misleading and out of date. It didn’t present anything about the business strategy or the other things you seem to believe are so critical to success.
    Those guys concentrated on acquiring resources (about $10 million equity, all from angels and $12 million in grants), taking the resources and turning them into an asset (a clinic-ready glucose-responsive insulin) and finding several pharmas that wanted to buy the asset (with Merck winning out with a headline number of $500 million).
    But then again you don’t seem that impressed with asset-centric, lean-resourced companies.
    But nifty web sites, that’s impressive.

  • Stewart Lyman

    Roger Ramjet, It is difficult for me to comment on a website that I haven’t seen and can’t refer to. I would guess that it must have contained some contact information, or else Merck and these other companies would not have been able to contact them to make a deal. How did these companies learn about the products that this company was developing? Are you impressed with “asset-centric, lean resourced companies” that would purposely mislead visitors to their websites and fail to include even basic information that is publicly available elsewhere? Help me out here: why would they want to do that? This company was also able to raise money solely from angel investors, a path that will not be available to many others that will depend on venture capital firms. As I stated in my article, websites don’t need to be high-tech or even “nifty”, but they should always include the basics if they want to maximize their chances of being successful.

    • Roger Ramjet

      Thanks Stewart – all interesting questions.
      How did Merck (and others) learn about SmartCells? Relying on a website to attract a pharma’s attention is like dropping an unbaited hook into Boston harbor to catch bluefin tuna. The universe of potential partners/acquirers for any early stage biotech is very small, from two to perhaps six, so they likely identified the one or two right people in each target pharma, worked to get in front of them and built interest using a sequenced process to tell their product development story. Their web site was almost certainly irrelevant for this.
      The same is true for venture capital firms, (lead) angel investors and sources of grants – it’s all about identifying the small number of individuals that are critical and then working those contacts, It’s not done by telling your story on a web site.
      So who is attracted by an informative web site if not customers and funders? The vast majority will be worth less than zero – consultants and suppliers looking to provide things that are irrelevant to the tasks at hand, journalists and of course competitors. About the only audience of real value is potential employees, some of whom are rightfully interested in what a company is doing. So that’s about the only place you have to hang your hat for an early stage biotech’s web site.
      The more general point is that it is paramount for a start-up to determine the small number of things it needs to do and do them well, but not get otherwise distracted.