The Ultimate ‘Spine Sweat’ Experience: When MBAs Pitch Silicon Valley VCs

THE INVESTORS TELL THE STUDENT TO INTEGRATE TECH INTO HIS SERVICE

Instead, Greer is urged to look at how technology is being used by Uber and Arbib and whether that model can be applied to home health care. “You should really take a hard look at integrating technology into the business to allow you to scale,” advises one judge. “If you give the caregiver that power to disrupt and provide backup support, like Uber has done with its drivers, you might be able to scale the business and build it on referral fees. But you can’t scale it by knocking on doors.”

Greer, who looks a little shaken by the response he has gotten, later says he plans to share the remarks with his co-founder and to think hard about the criticism. “It’s hard to find people in this world who will really tell you want they think,” he says. Asked if his confidence was shaken in the room, he says, “My confidence comes from my family and my wife. I’m in this business because I want to be a voice for the marginalized elderly and find care workers who can help them.”

Yet another student, Sean Taylor, 32, proposes a real estate service that would more efficiently match city apartment seekers with brokers who arrange leases. The idea came to him when he moved to Chicago from Ohio and had difficulty getting brokers to show him rentals on his timeframe. Taylor, who has been in Kelley Direct for two and one-half years and works for Motorola Solutions, explains how his startup idea, dubbed KeyCupid, would work.

‘YOU ARE USING OLD SCHOOL TECHNOLOGY!’

“I emailed three brokers in San Francisco last Friday,” he tells the VCs, “and asked them to show me apartments that afternoon. One of them said he couldn’t do it and two others didn’t even bother to respond. So the owner of the property loses.” His app would allow would-be tenants to access all the available apartments in a city and then match tenants to real estate brokers who could show them the space and close the deal. They brokers would have access via an old fashioned lockbox at the apartment.

Taylor said he would start the service in Chicago, where roughly 30% of the properties are vacant. Ultimately, he would target the top 25 markets in the U.S. After pulling out a pro-forma for the business, he asks for $155,000 for 20% of the equity in the startup.

The questions come fast and furious.

“What portion of rentals go through commission brokers,” asks a VC. “I don’t think the model works for larger apartment buildings because they have someone on the premises to sell their own apartments.”

“You are using old school technology,” advises another judge.  “As soon as you make human beings involved you bring friction.”

THE GRADES RANGE FROM AN A+ TO C- BUT STUDENT FEEDBACK WAS POSITIVE

Says another, “the beneficiary here is the landlord and in a hot market you could allow for dynamic pricing. But you need to disintermediate the market, sell it to landlords and get rid of the brokers altogether. If you could pre-quality the tenants with credit scores, you could create a a powerful tool for the landlord.”

Taylor leaves not with any likelihood of funding, but with lots of issues to ponder.

By day’s end, all 14 students made their presentations and the grades ranged from an A+ to a C-. At least two of the MBAs received follow-up interest from VCs and companies on future funding. No less surprising, student feedback was extremely positive across the board, even from students not receiving the highest grades. They thoroughly enjoyed the opportunity to share an idea with veterans of Silicon Valley who have had the experience of seeing thousands of business plans.

“By far this was the best experience I’ve had in Kelley Direct,” wrote one of the students who didn’t get a high grade. “And the feedback was so valuable and was exactly what I was looking for when I signed up for the class. If I had wanted another easy A class I would have done something else, but I didn’t and am happy with the outcome.”

Thick skins, for sure.

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