The Disappearance of the Fundraising Demo

Ten years ago, Guy Kawasaki took this photograph of me. I was attending my first YCombinator Demo Day, maybe three months into my time at Redpoint. Much has changed. I’m am not as young or as green. YCombinator has thrived and scaled. And the startup demo has disappeared.

At that August Demo Day, each pitch lasted eight minutes. Without fail each featured a demonstration of the product. It was the height of the Web 2.0 era. The iPhone was just a year old and mobile hadn’t blossomed yet. The web was still the center of innovation. And the demo provided founders a chance to explain these innovations. I felt like I was seeing a wisp of the future incarnated in code.

For example, this is Sachin Agarwal, the founder and CEO of Posterous. He was showing the audience how to create a blog post from an email. We were taken by the simplicity of the product and Redpoint led the Series A in Posterous shortly after this.

Today, demo days are a misnomer. We should call them metrics days. Market size. Weekly growth rate. Net negative churn. The same is true for fundraising pitches. Most of the founders I meet never show their product in the meeting.

The fundraising pitches of 2008 highlighted leading indicators of success: the product, the vision, the team. Today, we concentrate on lagging indicators of success: metrics.

I’ll be the first to say metrics can be an important part of a story. But I think we’ve lost quite a lot along the way in scrapping the demo.

The best partnerships between founders and investors are those formed with a shared vision of the future, and a passion to see it through. You can’t inspire that commitment on numbers alone.

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