No, it's not the other way about, even though it seem counter-intuitive. Ideally, you should write down your business plan early enough in the game just so you can makes sure that you've answered all the obvious questions and you know there's a business there. You think of your idea, you start to build it (whether it's a product or service) and somewhere along the way, you have to write down what your idea is all about, either to get funding or to market to customers. But apart from the plan, there's the description, often the elevator pitch or one-liner or even the tag line, that you start working on the moment you're ready to talk to other people about your idea and you'll soon find out that these words are more than just 'marketing', they're critical to your business.
First, the very act of trying to describe what your business is about turns out to be a most challenging exercise. It could take you weeks of creating, analyzing and re-creating to come up with something that you believe represents what you are doing. And doing it in clear language takes a little bit more (help from more 'literary' types). Finally it's done and you're excited as you can now build 'a widget that keeps people from losing their marbles'. (Maybe the figurative kind? That would be something.)
So what you have is a nifty way to track marbles, and you think you have a great way to distribute to a large market and make money so you're marching along. And one day, you are putting together a brief summary to send to a business acquaintance who knows someone who is involved in a fund where a partner is super interested in marbles (this is how it often goes). You read your description again and decide that all this time you've been working on the tracking but haven't paid attention to how people would use it. So now you decide you need to focus on the user experience of using the tracking to find the said marbles. Still, it's early enough in the game and it's all good.
And you keep going, and you're reviewing your presentation that you'd be making to a VC soon and the word 'people' hits you. Do you really want to say 'people' which may mean individuals, consumers, or are you really focusing on selling to organizations which may then help people with their marbles? This warrants a sit-down with your team and discussions on which would be the better market, and you decide to focus on individual consumers, especially since your sales and marketing guy assures you that there's not much profit in selling to middle-men. By this time you feel that your team knows exactly what to do and you've laid it all out, and you can confidently answer when the VC asks you 'which people?' or anything else about your product.
You are getting deeper into your business and now you find that there are others out there who are also positioning themselves as having marble trackers like yours and, crushingly, it's not just a startup or two, but a big gun (or two) with the means to take you out before you get established. Since you're a true entrepreneur, you don't just throw up your hands in despair, but you go back to the fundamentals and look at what you set out to do: provide a widget that keeps people from losing their marbles. And the bells clang in your head - your differentiator is in 'keep from losing' - you're not just going to track marbles and help find them once lost, you are going to keep people from losing them in the first place. Maybe that would take not only a widget, but a service, but your team thinks that's great because the big guns aren't going to bother with that and would leave the field to you and the other smaller fry. And as an added bonus, you now have a new exit strategy as maybe one of those abundantly sized guns could buy you out in the future.
Articulating your business and vision in clear terms is critical, not only for selling it to others, but to keep you and your team on track by providing a solid touchstone for every strategic decision you have to make. Not to mention, it may keep you from losing your marbles!
Channeling the inner entrepreneur who views life as a startup. Musings about people, their spirit, the startup ethos and the entrepreneurial attitude, with an emphasis on education and social ventures. The 'how-to'? Not so much. But definitely the why, the what and the whatever.
Showing posts with label competition. Show all posts
Showing posts with label competition. Show all posts
Focus on fundamentals
Last night, the teen team I mentor at BUILD (see here for more info from a previous post - is worth your support!) presented at Round 2 of the business plan competition. There are two more competitions to go, the last one being the biggie, but this one was exciting and illuminating on many levels, and as usual, there are many lessons for us grown-up entrepreneurs.
First, there was plenty of drama before the competition. My co-mentor and I were concerned that the team hadn't quite completed the presentation - this was their first attempt at Powerpoint, the lingua franca of business pitches - but we'd given all the feedback we could, and both of us prefer it to be their own effort, not overly influenced by our own business experiences. In other words, we didn't show them how to do sales projection graphs in Excel, for example. And we found out there was more confusion when one of the parents felt that the product was not properly designed (it's an accessory for teens) and got involved in re-doing the whole pitch the night before, but it was too late as the original pitch had already been turned in and that was the one that would be projected.
There was little we as mentors could do minutes before the presentation other than assure the team that the original pitch which they had worked on was good enough, and that they were all familiar with it, so to just go ahead with it. They were the last team to present, so the tension kept mounting. All the previous teams had colorful slides, with sales projection charts and all. We kept repeating that the team shouldn't worry about their plain slides though they weren't convinced - but when it came time to make the pitch, they went up there showing none of the tension and did it and won!
Based on the judges feedback and what I observed, here are some reasons why I think they won, all of which are applicable to any business:
First, there was plenty of drama before the competition. My co-mentor and I were concerned that the team hadn't quite completed the presentation - this was their first attempt at Powerpoint, the lingua franca of business pitches - but we'd given all the feedback we could, and both of us prefer it to be their own effort, not overly influenced by our own business experiences. In other words, we didn't show them how to do sales projection graphs in Excel, for example. And we found out there was more confusion when one of the parents felt that the product was not properly designed (it's an accessory for teens) and got involved in re-doing the whole pitch the night before, but it was too late as the original pitch had already been turned in and that was the one that would be projected.
There was little we as mentors could do minutes before the presentation other than assure the team that the original pitch which they had worked on was good enough, and that they were all familiar with it, so to just go ahead with it. They were the last team to present, so the tension kept mounting. All the previous teams had colorful slides, with sales projection charts and all. We kept repeating that the team shouldn't worry about their plain slides though they weren't convinced - but when it came time to make the pitch, they went up there showing none of the tension and did it and won!
Based on the judges feedback and what I observed, here are some reasons why I think they won, all of which are applicable to any business:
- The lack of color and flash on the slides did not matter, but the content of the slides did. Our team had only a few bullets per slide and they were in simple words (side note, for most of our team, English is a second language). It's good to have clarity in your pitch (though a little color wouldn't hurt).
- The product and manufacturing/distribution process were described clearly and step by step, so everyone could understand it. In fact, the judges even complimented them on the simplicity - which implies the viability - of the process. People trust what they can understand.
- They focused on the important stuff - the product and how they would make it, sell it and what the financials would be. They missed some extras covered by other teams, like what they would do with the profits, but they nailed the core elements of what it takes to build the business - the stuff that matters.
- The team projected confidence, both during the pitch and in the Q&A. Even when questioned on things that they hadn't considered before (like 'barrier to entry'), they thought on their feet and answered with conviction if not accuracy. You trust teams that believe in what they're selling, and if you're sold on it, the chances are potential customers will be too.
The stealth mode startup
I'm betting 8 out of 10 startups begin by being in the 'stealth' mode (that's based on a scientifically conducted multi-year study of course). Most of the entrepreneurs I run into, who've just launched companies, are quick to claim they're stealth, or 'under the radar' - that's true for moi too - and it can persist for quite a while.
So why do entrepreneurs like me go 'stealth'? It's primarily because they don't want anyone else ripping off their idea. This presumably changes when they've got enough funding, staffing and traction that it doesn't matter - or more likely, when publicity is required to build traction. Of course that begs the question, is your idea that easy to rip off? Don't you have some deep, complex IP that takes six PhDs six years to construct? Not so much in the web world, and not even in the enterprise arena. And entrepreneurs are a paranoid bunch - and often need to be so. (I admit to sometimes using the 'stealth' term as a cop out since I don't really want to discuss it with a given person or group - a negative vibe thing.) So 'stealth' is understandable, accepted and occasionally considered glamorous and attractive, especially if you're stealth even after VC funding.
But there's a down side to stealth. There's not enough info about your venture to get people excited. And you and your team are constantly weighing what to say and to whom. Investors don't do NDAs, and standard business practices don't always favor the early stage entrepreneur. You can pick who you pitch to, but can't bet they're in the clear - for all you know, they might be doing due diligence on a competitor, and you're it. (That's another topic though.) What about potential candidates? In a tough market, what you do is an important part of the mix. How much can you tell? I did a previous post on this - TMI - and this is continuation on the musings.
The website is another big challenge. Usually people look at the website to get an idea of the company - not just what it is about, but what it is like. Most stealth ones say very little. Are you missing a key hiring edge? This is a question my team is struggling with right now. How can we make ourselves interesting without revealing too much. Not very easy to do, as we can't even look at other similar startups to see how they've handled it (they're in stealth, duh). But we're at least decided on what it should have: much ado about nothing.
So why do entrepreneurs like me go 'stealth'? It's primarily because they don't want anyone else ripping off their idea. This presumably changes when they've got enough funding, staffing and traction that it doesn't matter - or more likely, when publicity is required to build traction. Of course that begs the question, is your idea that easy to rip off? Don't you have some deep, complex IP that takes six PhDs six years to construct? Not so much in the web world, and not even in the enterprise arena. And entrepreneurs are a paranoid bunch - and often need to be so. (I admit to sometimes using the 'stealth' term as a cop out since I don't really want to discuss it with a given person or group - a negative vibe thing.) So 'stealth' is understandable, accepted and occasionally considered glamorous and attractive, especially if you're stealth even after VC funding.
But there's a down side to stealth. There's not enough info about your venture to get people excited. And you and your team are constantly weighing what to say and to whom. Investors don't do NDAs, and standard business practices don't always favor the early stage entrepreneur. You can pick who you pitch to, but can't bet they're in the clear - for all you know, they might be doing due diligence on a competitor, and you're it. (That's another topic though.) What about potential candidates? In a tough market, what you do is an important part of the mix. How much can you tell? I did a previous post on this - TMI - and this is continuation on the musings.
The website is another big challenge. Usually people look at the website to get an idea of the company - not just what it is about, but what it is like. Most stealth ones say very little. Are you missing a key hiring edge? This is a question my team is struggling with right now. How can we make ourselves interesting without revealing too much. Not very easy to do, as we can't even look at other similar startups to see how they've handled it (they're in stealth, duh). But we're at least decided on what it should have: much ado about nothing.
One size doesn't fit all
If you've ever pitched your idea to someone, you'd have experienced this. The eyes veer off to the side, there might be a small pursing of the lips closing round a 'hmmm' or two. You can almost see little gear-thingies or neurons or whatever coming to life as they ponder the question "what does this remind me of? what is this like?".
This desire to seek similarities, it's a very human trait. It seems to help in our understanding, and we use it a lot when describing things to others. "Like" is probably one of most commonly used prepositions - and not just by pre-teen girls. 'Lost' is like 'X-Files' and 'Survivor' mashed-up (or not). A 'dosa' is like an Indian crepe. Shutterfly is like Snapfish. Google is like Yahoo - wait, no it isn't, it's like MicroSoft, no it isn't, or is it like (this could go on for a while).
This is not a bad thing, after all it helps promote understanding. But there is a side effect. When you try to judge a business idea by what it is 'like', your view of it is informed by the connection. This may actually have the unlooked for effect of causing you to misunderstand the idea, which in turn could cause you to dismiss the idea as one that's been done already.
As an entrepreneur, you have to hold on to some simple truths. One, if you have an idea that has a chance of working, most likely someone has already done something that is 'like' it. And that could be a good thing - it won't be your blood on the proverbial edge. Two, even if there's an established player, you may very well be on to something better with your approach. Case in point, the afore-mentioned Google, a late entrant to the search engine space which already had its share of 800-lb primates. Three, seek the differentiation in the niches served. There are very few truly universal solutions. With 6 billion plus people on earth, that's not hard to believe. Four, if you find competition in your niche, if in fact "it's been done already", you still have one more option - get to know your customers, really really well.
I'm going through this almost on a daily basis, and I'm not only learning to tell a better story, I'm getting to be a better listener when a fellow entrepreneur tells his. It helps to remember that 'similar' doesn't mean 'same' and there is a market full of Goldilocks out there looking for just the right fit.
This desire to seek similarities, it's a very human trait. It seems to help in our understanding, and we use it a lot when describing things to others. "Like" is probably one of most commonly used prepositions - and not just by pre-teen girls. 'Lost' is like 'X-Files' and 'Survivor' mashed-up (or not). A 'dosa' is like an Indian crepe. Shutterfly is like Snapfish. Google is like Yahoo - wait, no it isn't, it's like MicroSoft, no it isn't, or is it like (this could go on for a while).
This is not a bad thing, after all it helps promote understanding. But there is a side effect. When you try to judge a business idea by what it is 'like', your view of it is informed by the connection. This may actually have the unlooked for effect of causing you to misunderstand the idea, which in turn could cause you to dismiss the idea as one that's been done already.
As an entrepreneur, you have to hold on to some simple truths. One, if you have an idea that has a chance of working, most likely someone has already done something that is 'like' it. And that could be a good thing - it won't be your blood on the proverbial edge. Two, even if there's an established player, you may very well be on to something better with your approach. Case in point, the afore-mentioned Google, a late entrant to the search engine space which already had its share of 800-lb primates. Three, seek the differentiation in the niches served. There are very few truly universal solutions. With 6 billion plus people on earth, that's not hard to believe. Four, if you find competition in your niche, if in fact "it's been done already", you still have one more option - get to know your customers, really really well.
I'm going through this almost on a daily basis, and I'm not only learning to tell a better story, I'm getting to be a better listener when a fellow entrepreneur tells his. It helps to remember that 'similar' doesn't mean 'same' and there is a market full of Goldilocks out there looking for just the right fit.
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