March 4, 2020

#84 The Napkin Pitch

by The Pitch

Background show artwork for The Pitch

Tiffany Walling McGarity called in to the show and you, our listeners, voted her on to pitch the investors. But from the moment she stepped in the room, it was clear that this pitch would play out differently from the rest. On this episode, what a pitch sounds like when all you have are a few scratches on the back of the metaphorical napkin.

Today's investors are Maia Bittner, Elizabeth Yin, Sheel Mohnot, Charles Hudson and David Goldberg.

Where to Listen


A few months back, we did a call-in show.

Josh: Hello this is Josh!

Tiffany: Hi! This is Tiffany Walling McGarity I’m one of the three founder of Metapyxl. 

And you, our listeners, voted Tiffany Walling McGarity on pitch island! Going from a phone call to the pitch room isn’t an easy trick to pull off.

Today, we’ll hear a pitch the likes of which we’ve never had on the show before. What does a pitch sound like before any revenues, even before the product is built? When all the founder has is an idea, and a gut feeling that their idea could turn into a big business.

Today on the show. What a pitch sounds like, when all you have are a few scratches on the back of the metaphorical napkin.

From Gimlet, this is The Pitch. I’m Josh Muccio.

Let’s meet the investors.

I’m Maia Bittner

Maia built two financial tech companies, and sold them both. Now she’s out scouting startups for Sequoia, one of the biggest VC firms in Silicon Valley.

I’m Elizabeth Yin

Elizabeth is a managing partner at Hustle Fund. And so far she’s invested $30M in over 250 startups. One example, a company called Nerdwallet.

I’m David Goldberg

David is a general partner at Corigin Ventures, where they’ve invested $38M in over 50 companies so far.

I’m Sheel Mohnot

Sheel has sold 3 startups for over $50 million dollars. Now he’s an angel, invested in several companies worth billions today.

I’m Charles Hudson

Charles started Precursor Ventures, where he’s invested $45 million in over 100 startups to date.

Coming up, what’s it like in the pitch room when all you’ve got is a napkin pitch.

Tiffany: Hi. Tiffany.

Maia: Maia. Nice to meet you.

Sheel: Sheel. 

Walking into the room, Tiffany’s nervous but she’s smiling and seems excited to finally meet the investors.

Tiffany: All right. My name is Tiffany. I’m one of the three founders of Metapyxl, along with my husband John and my sister Jennifer.

Sheel: Family business.

Tiffany: Yeah.

Sheel: Nice. 

Tiffany: John and I have actually been working together for 20 years as commercial photographers. Everything we shoot goes online. And uh what we realized is the internet really is the world’s largest copy machine. And the work is then subject to theft and misappropriation, leading to loss of revenue and authorship. In fact, 2.5 billion images are stolen daily on a global level. And I am literally freezing up here.

David: So what do you do and how do you do it?

Tiffany: No, no, I’m getting there, I’m getting there. Do you mind? I’m sorry.

David: No, no. Take your time.

Tiffany: Okay. Um. They’re being stolen on a global level. And I have fear of public speaking.

Sheel: Oh, it’s okay.

Elizabeth: It's okay.

Tiffany is standing there, in front of all five investors. She’s looking down. It’s here, in this moment Tiffany's pitch could have cratered. But then investors step in to help. 

Charles: We can make it more conversational.

Elizabeth: Yeah, we can have a conversation.

Sheel: Why don’t we just chat.

Maia: It doesn’t have to be like a speech.

Tiffany: No, no, no it’s fine, I’ve got this. I’ve got this.

Charles: All right.

Tiffany: Thank you. Um. Um, oh, okay. I'm ready.

Sheel: Excellent.

Tiffany: Thank you.   

Tiffany: In fact, 2.5 billion images are stolen daily on a global level and of course this is what we experience firsthand. That's how Metapyxl was born. And it was born out of a need to track, protect and promote digital media. And we do so by applying a proactive, survivable meta mark, as we're calling it, into media. And you can think of the meta mark as like an invisible fingerprint protecting it with permanent metadata. And it survives everything from screenshots, cropping and compression.

Maia: Wow.

Tiffany: We then take our Metapyxl platform on to the blockchain and we leverage it with a smart contract. And we are here today currently seeking $850,000 to help finalize our MVP and pay for our legal and IP costs.

Tiffany: I also have a little demo here.

Sheel: Yeah, let's see it.

Elizabeth: Oh yeah, sure.

Sheel: We’d love to see it.

Tiffany opens her laptop and pulls up a website with a gallery of her photographs on the homepage. If you click on one of the photos, there’s a popup with Metapyxl’s licensing information. 

Tiffany:  You click on the image, it has all the creator’s information. And it shows you who the licensor is. It’s registered on the blockchain. That way you always know where it is, who’s owning it. And uh, it keeps track of your attribution.

Sheel: And um what if I just take a screenshot of it. So how, how would that work? If I, what if I just took a screenshot of that and put it on my website?

Tiffany: Yeah. So that’s the beautiful thing about our core technology, is that it actually embeds into any media. And so it becomes part of the work.

David: Could you just keep going on that. How does it actually do that?

Tiffany: So um, if you were to sprinkle glitter let’s say on an image, it’s in every single part of that image.

Elizabeth: So you're saying of we took a screenshot of that, we would see a picture that has, like...

Tiffany: No. So if you took a screenshot of this and then try...  

Elizabeth: ...glitter.

Tiffany: No. No. It's invisible. 

Tiffany: So if you took a screenshot and then you tried to pass it off as your own and put it back online, because it already has that mark in there, that unique fingerprint, it would recognize whose image it is. It helps to track that image, always know where it is online, know who the creator is Always…  

Sheel: That's not answering my question. So, if I, if I take a screenshot of that image and put it on my blog, how will you get notified that I've done that?

Tiffany: Yeah. So. Um, through the technology. It is always attributed to that image. 

David: Let me see if this is the question. So we get that your technology tracks it. Is there a proactive notification? 

Tiffany: Yes.

David: Or would someone have to say, Where is this image being used?

Tiffany: No, it, it lets you know. It tells you. There's proactive notification at all times.

Sheel:  But I don't understand how that's possible.

Charles: You want to know how does it phone home?

Sheel: Yeah.

Elizabeth: Yeah.

Tiffany: It’s through an invisible fingerprint, basically.

The investors are actively trying to figure out, how does the technology supposed to actually work!? That’s when Elizabeth takes  a step back, to ask, do you have anything built today?

Elizabeth: Where are you in terms of your development?

Tiffany: Okay. So we are currently developing the MVP. 

Elizabeth: And when you say that, you mean like there, there isn’t any form of a product built today?

Tiffany: Correct. Yes. Other than the fact that it’s been proven, the technology is ready to go. We’ve spoken to everyone to be able to build this out. And ultimately, once we get our funding, it’ll be about four months until it’s finished.

Elizabeth: How do you make money in this model?

Tiffany: Well, we are looking at it as a SaaS and licensing structure.

Elizabeth: So if I were a photographer, I would pay some monthly subscription to use this?

Tiffany: Correct. Just like anybody that's now using Dropbox or that sort of thing. It comes part of your daily routine. 

David: So what would they pay?

Elizabeth: How much are they gonna pay? Yeah.

David: Yeah.

Tiffany: Well, we haven't set up that yet because we're still trying to figure out how much it's going to cost to ultimately finalize this product.

Elizabeth: So right now, are you guys actively selling ah this product?

Tiffany: Not currently. Right now we’re just developing it. But we’re getting everybody, you know, we’re obviously trying to get people on board so that it, when it’s ready, we’ll have the beta customers, which, the EU, they have an urgent need for this type, type of technology. Their digital single market legislation was just passed.

Okay I’ll bite. Digital Single Market legislation.

In a couple of years, the EU is planning to hold platforms like Facebook accountable when people post stolen images.

And Tiffany thinks the Facebooks (and Instagrams and Twitters) are going to want to use Metapyxl to stay ahead of the new law.

Tiffany: It’s going to be put towards the platforms to take responsibility for maintaining the rights of the content creators. 

David: Oh, so, is, is that what it is? Cos like, when I first heard this, and I was actually pretty intrigued, it seemed like it was every brand, company, photographer, who just can like sign up for their $20 a month and get like their Life Lock for their own images.

Sheel: Yep.

Tiffany: Exactly.

David: Well. But then it sounds like. Well but then you start talking about governments and legislation that I've never heard of.

Tiffany: Sorry. It’s a big, it’s a big offer. Right. Of course. But you know, we’ve spoken to a ton of different photographers who would be completely on board. We’ve spoken to celebrities and I’m not going to name who but, ah, We’ve already got, also on our advisory panel, another photographer, Jill Greenberg, and she is going to be a beta customer as well.

Maia: I think it's cool that so many people could be interested in this, right, and like that's what makes it a big problem and a big business. Um, but I, I worry it's gonna be impossibly hard for you guys to kind of get out of the gate without like a really crisp initial customer. And like exactly who that target demo is, what their problem is, how they solve it today, and why your solution is better, I think that's gotta be really locked down.

Tiffany: I agree. And thankfully, you know, I'm not the only one in this company trying to figure that out.

Maia: If I were in your position, I would just run with individual photographers...

Tiffany: Of course.

Maia: the initial customer. 

Tiffany: Absolutely.

Maia: Because you know them. You speak their language, probably part of the community, you could get a lot of feedback from them to iterate on the product.

Tiffany: Absolutely 100%. But I, but we do see that locking this in for the enterprise platforms, it's a huge problem right now. 

Charles: I think everybody here invests in really early stage companies...

Sheel: Yep.

Charles: … or we wouldn’t be on this panel. And I am just struggling to figure out, if you only could serve one customer for the next 18 to 24 months, who would you pick? Because I really am struggling to figure out, like, my concern hearing your presentation is you’re going to get 5% of the way with enterprise, 10% of the way with photographers, and you’re going to end up burning through $850k and you’re gonna know a little bit about a lot of customers, instead of a lot about a small number of customers. And to me, that’s like the recipe for startup death.

Tiffany: Okay.

Charles: And so like if you could only pick one customer segment, like who would you pick? To the exclusion of everyone else with full knowledge that there are other big opportunities out there. 

Tiffany: Sure. Um, I would pick myself. 

Sheel: Photographers.

Tiffany: Yeah. Of course. And I didn’t mean to suggest that we weren’t understanding that. I’m just, you know, obviously kind of caught between knowing that these platforms are imminently looking to solve this problem. But also knowing that people like me are gonna really find value in this. So yeah, we would start with people like me.

Elizabeth: So, I’m gonna be really direct with you. I’ve actually seen a lot of businesses try and go after this same opportunity and I fully believe that there’s a big, big problem here. I think, from observing these other companies that do have developed products, I think, at the end of the day, the biggest struggle actually has been on the customer acquisition side. Getting people to pay for this. That’s what I would actually test first. You have a community of photographers who are in your network, can you pre-sell some of this?

Tiffany: Absolutely.

Elizabeth: And I think from there you can then later sell to enterprises, if that looks promising.

Tiffany: Yeah, of course. I mean, I mean, we're not being silly thinking that we're gonna just go right out of the gate here and it's going to be perfect.

Elizabeth: And, and so I think, wrapping up my thought, like since, you know, for me, I understand this is early days, but I’m very much a person of like go-to-market first, do everything you can to de-risk go to market first, and so I’m going to be a pass. Thank you.

Tiffany: Thank you.

Elizabeth Yin, who specializes in investing in super early stage startups just like this, is out. And we’re not that far into the pitch.

But the other investors believe that there could be a real opportunity here. After all, people stealing photographs on the internet -- and if someone can crack this nut, they’d make a boatload of money. 

When we come back, the investors try to figure out if Tiffany’s team is the one to do it.


And we’re back.

Tiffany’s pitch for Metapyxl has been pretty rocky so far. When you’re pitching this early, when all you have is a sketch on a napkin, there’s one more thing that’s crucial in a pitch.

Sheel: Can you talk about your team.

Tiffany: Yeah. Our two developers, Chet and Mike, they work in cyber forensics and cyber technology. Our other team members, we have a CEO at the moment, um, working with us to, um, get this product done.

Sheel: Who's the CEO?

Tiffany: Um. Bob Michaelson. He's, ah, brought four companies to exit. And M&A. He worked with Sterling Partners. Um. $5 billion. So we just signed him on recently. 

Elizabeth: So I’m gonna ask you a really blunt question.

Tiffany: Yeah.

Elizabeth: If you have two developers and you have a CEO who is managing product, what is that the three of you as co-founders are working on?

Tiffany: My sister's out in San Francisco, and she handles the sales and marketing side of the company. Um, John and I are wearing many hats.  John's a designer, and an artist, so he's helping with all of the branding and the look. And I was a producer, in a past life, so I help kind of bring everything together,  on a daily basis.

Sheel: At the stage that we all invest, pre-seed, seed, the thing that I value most is the team. And your team structure is not set up for success, in my opinion.

Tiffany: How so? Can I ask?

Sheel: Yeah, sure, of course. So this is actually pretty heavy technical lift. 

Tiffany: Yep.

Sheel: So you’re doing like, um, photograph fingerprinting, there’s a blockchain component. And your team, like, you have three founders who are non-technical. In this business, I think technology is core to the product. So I want somebody with a technical background to be part of the founding team.

Tiffany: Well, okay. And just to put this out there our developer once we get some funding, he’s going to come on as our full-time CTO. Um. I don’t know if that changes your perspective here a little bit, but...

Sheel: It doesn’t. Because you have, you have four other people that are more senior than this person. This person hasn’t committed. You know, it’s like…

Tiffany: How so? He hasn’t committed? 

Sheel: Like he’s committed to a job once you have money to invest. Or to give him. But um. It’s like, if technology was core to the business, he would be one of the top four people in the company.

Tiffany: Well, I, we consider him to be one of the top four people in the company.

Sheel: But you have three founders, a CEO, external CEO.

Tiffany: Correct.

Sheel: So, the other thing I’d say is, external CEO also is a red flag for me. At this stage in the company, a pre-seed company, a founder should probably be CEO. And so for that reason, I’m gonna pass.

Tiffany: Okay. Thank you.

Charles: So I’m gonna pass. I'm just really concerned about your team composition, honestly. Typically when we invest in companies at this stage, it’s 2 or 3 people and the question is always, What more can this team do with more resources? You have a rather large team for a company of your stage. And I think, my fear is like you have a team of 5 or 6? That’s already a little amorphous. And like adding more money might actually make the problem worse not better. So, my, I know it’s really hard, it’s a really harsh thing to say, I know. But I really, I would encourage you to like ask yourselves the really hard question, like, do all three of us need to be involved fulltime as cofounders in the business? Because I think it undermines your story right now. And I feel like there’s some good nuggets here, but I can’t get past that. And so for me, this is a pass.

Maia: Yeah, I invest in a lot of pre-seed companies, and you know, they don’t have all the pieces figured out. Um, like either the product’s missing or the go to market is missing, or different pieces. But I don’t quite see enough here for me to make an investment. So, I’m a pass as well.

Tiffany: I’m so disappointed.

David:  So first is, I am passing. I understand the problem that you’re solving. I think, as a pre-seed company, when there’s no data, when there’s very little traction, so much of this comes down to storytelling. And so I think just as a team, you guys need to circle up also internally about really refining that story. And that’ll come with practice and with time. Maybe it’s getting the actual CEO in the room who can bring some of that experience. 

Tiffany: Right.

David: I don’t know if speaking about building this company and raising the capital is really the role that you should be playing here.

Tiffany: I hear you. Thank you. 

Usually what happens right now is the founder leaves and the investors talk about the pitch. But after everyone has said no, they all want to stick around and help Tiffany solve her problems. And their tone in here is super sincere. They're being really generous with their time and - they're giving her all of their expertise for free. 

Elizabeth: Here's what I would recommend that you do with your team. I would actually recommend that you guys just like step up and own some things. Like for example, it sounds like your husband is a designer, like maybe he owns the technology piece, right? Like not every technologist is, you know, in the weeds coding or whatever. But like can, is he managing the two developers? I don't know.

Tiffany: Yes.

Elizabeth: Um, can your sister start selling this. I mean, I think you guys have a lot of strong relationships with photographers. You want to go after that base, from what I’m hearing here. Why don’t you just start selling to them? Especially since you already have that relationship. They trust you, they know you. So that way that you can just focus on the things that need to happen to make this run right now, even though the product is not available. Things like that.

Tiffany: Yeah, of course, our first customer is the photographer. And I, if I didn’t represent that properly then I definitely want to make sure that I at least, you know, solidly say...

Maia: I think we’re saying, like, represent that 100 times more. Not just like twice, like 100x. Be like, we know photographers. We have signed letters of intent with 1000 individual photographers. We have spent all this time at meet-ups and we have built out this solution with them in mind because we know how they work. Right? Like, it’s like...

Elizabeth: Stronger statement.

Maia: …way more.

Elizabeth: Like start charging today, pre-product. Or get them on a waitlist. And we have 130,000 photographers. And then I would not mention the other pieces like the EU and all these other folks.

Tiffany: Okay.

Sheel: And then also, I still don’t understand how it works. And I feel like, I think you could do a better job of making that clear. And I think probably, I’m probably not the only one.

Maia: Yeah, I, oh yeah. Or if, if, if all the details aren’t hammered out yet, just say that. Be like, We know that the final solution needs to do A, B and C. And we haven’t built all the mechanisms for that. But we know that it will need to achieve these things.

Tiffany: Okay.

Sheel: Thank you so much.

Tiffany: Thank you guys. Yeah. Absolutely. I really appreciate it. Thank you all.

Elizabeth: Thank you for coming. Good luck.

Tiffany: Thanks.

So much about this pitch just felt different than other startups we’ve had on the show. From the way Tiffany gave her pitch to the way the investors responded. It felt almost like everyone was unwrapping a present together but nobody knew what was inside the thing.

After the break, the investors explain, what a pitch at the super early napkin stage is supposed to sound like. And why some investors think, when you’re your company is this new, there’s no such thing as a good pitch.


Welcome back. Tiffany Walling McGarity gave her first ever pitch, to the investors on our show. And it was rocky.

When Tiffany walked out of the pitch room, her husband and cofounder was waiting to hear how it went.

Here’s producer Heather Rogers.

Heather: Your husband John was in the green room. So when you left the pitch room and you went in there. Can you tell me what you said to him? 

Tiffany: I just went, Uh, that was rough. 

Heather: And was he. What did he say?

Tiffany: I'm sorry. 

Heather: If you were to characterize exactly what was rough about it. What was rough about it?

Tiffany: I can compare it to when I was starting out as a photographer and meeting with clients, and instead of them saying, your work is great. Here's the next job. They start critiquing your work. At that point, you know, they're not looking to give you a job.

Tiffany hasn’t pitched any other investors since then. And, it made me wonder, what’s supposed to happen in someone’s first pitch. Turns out, Maia and Elizabeth are experts. They read so many emails, and see so many pitch decks, they could write the book on the topic.

Maia: The very early stage pitches are actually kinda my bread and butter so I listen to this stuff all day long.

Elizabeth: We get a lot of pitches at this stage. I have seen over thirty thousand pitches.

Heather: Whoa.

Elizabeth: And this year alone I expect to see near ten thousand pitches. 

Heather: What's the best pitch you've gotten from a company at this very early stage?

Elizabeth: It's a good question because most of the pitches are bad even in the companies that turn out to be phenomenal.  

Heather: I have to say that’s a little surprising. 

Elizabeth: Yeah. 

Heather: Can you tell me more about that?

Elizabeth: So when I hear a pitch, I'm usually one of the first people to get a pitch. And so usually it's, it's usually very, very bad. And then for even the best storytellers, they don't quite know where they are in the market and they don't quite know what is compelling to say yet.

Tiffany’s pitch really leaned on the product and the technology. But Maia and Elizabeth said that when you’re this early, the pitch needs to be anchored on the problem. 

Here’s Maia.

Maia: Problem: Americans’ floors are dirty because they walk in and they’ve got dirt on the bottom of their shoes from outside. And so they've got all this dirt on their floors.

Josh: Is this an actual pitch you’ve heard?

Maia: This is not an actual pitch, but then what I, the thing that I like to see the most, my favorite thing to see is like, how much money are people paying to solve this problem today? And how much time or hassle is it costing them? 

Maia: So if I were pitching this, I would show a graph of Roomba sales. I would show, you know, that Swiffer Mop? I would be like Swiffer mop sales have hundred Xed in the last 20 years. And then I would show how horrible the product is. Plus, you got to buy those refills all the time. It's very expensive. 

Josh: And they’re disgusting.

Maia: They’re disgusting, you got all this gross stuff. And then and then I would do -- and here's the real impact, I would show a bunch of pictures. You know, those like big piles of shoes that people have next to their front door? 

Josh: Yeah. 

Maia: And it always looks, like, gross and discussing. I would show these pictures of the shoes and be like, This is the state of America's home today. So we have these piles of shoes by the front door because we're trying to avoid tracking dirt into our houses.

Josh: It doesn't have to be this way. There must be a better way. 

Maia: Then our product is like a big piece of tape you put in your front door. As you walk over the tape it sucks all the dirt off of your shoes so you don't track it into your house. You never need to swiffer mop your house. And  then I like digging into the customer. Right.

I want to jump in here real quick to point out that Maia just described the product in one simple line, “a big piece of tape you put in your front door.” That’s it. She’s done talking about the product. And now she's on to the most important part of any napkin pitch.

Maia: And then I like digging into the customer. Right. So it's like we're gonna start with like the best target group to start with is usually whoever feels the pain the most. And so, like, we're gonna start with households who have young children because it's, like, such a pain to get kids shoes on and off. And so if they just have to walk across this sticky mat, it happens automatically, you know.

Even though everybody with a floor could be a customer, Maia and Elizabeth say that when you’re a founder at this very early stage. It's critical for you to zero in on a small subset of people who are your most likely customers. That's what Elizabeth wanted to hear in Tiffany’s pitch.

Elizabeth: I wanted her to go and talk with all these other photographers and really be able to articulate like what specific kind of photographer would be good for this? And what kind of photographer wouldn't? Because not every photographer will be in your target market. There are differences in workflow. Are you just getting started? Are, you know, what is your level of experience? Like how ingrained are you in your current system? So really understanding, I think even at a detailed level of who is the niche within those larger groups? And that was something that Tiffany could not articulate, or at least she didn't. 

Heather: Right.

Josh: I also got the sense that, like, she wanted to give you a product pitch. This is the amazing product and have that be self-explanatory. What made this a pitch where, like, you couldn't rely just on the product?

Elizabeth: I'm not actually convinced that this is a real need. 

Heather: Hmm. 

Elizabeth: I don't think it's enough to come up with a product. In markets where there, there's already an existing player and they're making a lot of money and their product is terrible, that is more compelling to me to have a product pitch. It's like, Well, actually there are already a lot of people paying for this with somebody else. So I'm just gonna go and steal their customers. That's the time to do a product pitch. Her product doesn’t go up against an incumbent. So to me, there is a big market risk here that people will not pay for this.

Heather: Right. And she's like putting all these resources into developing the product. 

Elizabeth: Yep. And the best founders that I've met over the years they can self-correct in a pitch and say, you're right. I haven't done this. I'm going to go, after this pitch, and and get that for you. And then they'll come back to me a few days later and say, This is what I've learned. And that's impressive to me. So it's not like it's one and done. She could've come back with all this stuff to have proved me wrong. Like, actually, you know, You're right. We did all this customer development and here's our response and we got all the sales. That would have been impressive to me. But I didn't get the sense from her response that that was something she wanted to do. 

Heather: Mm hmm.

Elizabeth: And she didn't come back and do that.

Earlier in her career, Elizabeth made the mistake of not digging into what her customers might really want. I’m just going to quote her here “we spent two years building out a product. And as it turned out later, that nobody really wanted to use that product. And it's not that there wasn't an opportunity for my startup, but rather we didn't have the right product because we didn't work with customers along the way.” end quote.

VC-backed companies are all about learning from your failure., and founders all the time make the mistake of spending years building something nobody actually wants.

But you don't have to make this mistake. You’re welcome.


The Pitch is hosted by me, Josh Muccio. Produced by Kareem Maddox and Heather Rogers. We are edited by Sara Sarasohn.

Theme music by The Muse Maker. Original compositions from Breakmaster Cylinder, Peter Leonard, Billy Libby, SoWylie and The Muse Maker. We are mixed by Enoch Kim. 

Lisa Muccio coordinated the recording of this pitch. 

As a reminder, no offer to invest is being made to or solicited from the listening audience on today’s show.

Thank you so much for listening. We’ll be back with a brand new episode. Next Wednesday. And “follow” The Pitch on Spotify, so you don’t miss a thing.