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.
Kenny Fraser is the Director of Sunstone Communication and a personal investor in startups.