TL:DR You need to find someone that gets value from your product and persuade them to buy it. Without this there is no business. Apologies if this sounds patronising but please don't ignore the bleeding obvious.
I have listened to three pitches this week and had feedback on one more. These are actual quotes:
From the feedback. The entrepreneur "was struggling to articulate a commercial strategy.”
During one of the pitches. Me: “Have you thought who will actually use your product.” Entrepreneur (after a bit of flannel): “That’s useful feedback, I should go away and think about that.”
From another pitch. “We know (XXXX) is the largest market but we haven’t included this in any of our plans or numbers.”
And the last pitch. “Our initial target market is proving slow to respond. So we have found an adjacent market which is smaller but faster moving. This has enabled us to get some sales and prove the concept.”
Guess which entrepreneur was most likely to secure investment? And guess which one does not need funding right now?
To save you trying to find the trick in this question, the answer in both cases is the bleeding obvious. The last quoted.
Its the customer stupid
Its a bit of a struggle to write anything else in this article. The point is so clear that making it feels patronising, unnecessary and dull. You need to know who the customer is for your business.
At the very early stage, I can live with a plan that says “I don’t know who the customer is but here is how I am going to find out.” Provided that finding out is the number one priority on your schedule.
There must be a clear customer focus. This means:
The Chairman's View
I apologise to the 100% of readers who feel they know all this stuff. All of the entrepreneurs above have received some form of funding. Either public or private or both. All of them have been coached in their pitches by experienced investment managers. One of them was also coached a little by me. Somehow the message is getting lost.
You need to find someone that gets value from your product and persuade them to buy it. Without this there is no business. Without answering this question, everything else in your pitch is a waste of time. Everything else you do is a waste of both time and money.
Please don’t ignore the bleeding obvious.
TLDR Personal growth and development should be an integral part of your business. It applies to founders and entrepreneurs as well as your team. Use this simple framework to help you fulfil your passion. Watching your team and grow and develop is the most fun you will ever have
When I listen to founders and entrepreneurs, the most common questions are about growth, investment and people.
People covers the widest range of different areas. When to hire? Who to hire? What skills are needed? How much to pay? Improving team performance. Setting objectives. Paying bonuses. Managing people who don’t deliver. Relationships with cofounders. Working with investors. Handling non executives and advisors. That’s at least 10 problems and four or five different groups of people.
There is one person missing from every question on this list. You. You are an intimate part of every decision you face as an entrepreneur. That applies to people, growth and investment. Yet when I listen to you, I hear almost nothing about personal growth and development.
An unbreakable addiction
This is a bit strange for me. I spent most of my career working for an organisation where growing and developing myself was an integral part of the culture. Over thirty years it became an unbreakable addiction. I can’t make any decision without thinking about what I will learn and how I can improve.
Its sometimes difficult to explain to people. I worked in that firm for many years before I realised it myself. I advised clients from many industries and saw few organisations that took a similar approach. Even our peers and competitors did not set much store by it.
We did. Hiring, performance evaluation, promotion, admission to partnership. You could not take a step with out demonstrating that you had developed as a person and had plans to grow further.
A simple framework
Its impossible to replicate culture. Its made up of other people sharing unique experiences in a other times and places. However, I thought it was worth sharing one of the threads that held our commitment to personal development together.
At every stage from graduate to senior partner, we used a consistent framework. It was built on a set of core qualities. And we had a simple, shared scale for evaluation.
The framework was divided into 7 broad, overlapping areas.
The idea is to understand your strengths and weaknesses on each of these points. You make a self assessment on a four point scale:
Making it real
The same scale was used for all regular feedback. On assignment reviews, by whoever carried out your performance evaluation, by promotion boards and by HR. The balance shifted over time. More emphasis on acquiring technical skills early in your career. A shift to leadership abilities at more senior levels.
Against each rating, the assessor would put evidence. Evidence had to be examples where the skills had been used in practice. This was a requirement. It applied to self assessment as well. It was always interesting to compare the self assessed evidence with the examples given by other observers.
The core qualities and the scale remained consistent long term. Everyone used them so we all developed a common understanding. A few simple features contributed deep and lasting advantages.
Different perspectives on the same person measured against the same scale is a powerful tool. It helps maximise performance and engagement.
A scale aimed at the next level of responsibility baked ambition and potential into all our dealings with people and teams.
The emphasis on skills ensured a continuing pursuit of excellence and improvement. You cannot deliver this in a culture of targets and metrics.
The Chairman's View
I hope there is something anyone in any business can learn from these principles. If you are part of a growing startup, I would argue they should be part of your life for 3 main reasons:
Kenny Fraser is the Director of Sunstone Communication and a personal investor in startups.