I just this minute got off the phone with a CEO who has twice been a client. Along with a technical founder, he’s been working on a new startup for about a year now, and he wanted to pick my brain a bit on messaging and positioning. He said he was struggling with the consistency of his messaging, especially when it came to pitching investors. The company is looking for $500,000 in an angel round.
“Investors are telling us we sound like a completely different company the second time they hear our pitch,” my friend said.
We spent some time on the fundamentals. Like a lot of early-stage technology companies — hell, like a lot of technology companies, period — their message focused far too much on what they do and how they do it and far too little on describing the compelling pain they can solve in a unique, high-value fashion and for whom. In short, their message didn’t do a very good job of describing the customer and the customer’s real pain. From an investor’s perspective, the messaging was also lacking a compelling narrative about the evolving market conditions driving their prospects’ pain, and the huge value that had been created by startups addressing a similar pain in an adjacent market. They had terrific research that described these market drivers extraordinarily well, but little of that was in the messaging.
After 45 minutes, my former (and, I have every good reason to believe, future) client was kind enough to say I had really cut through the fog and confusion for him. Then, he said, “I think our whole problem has been caused by the pitch coaches we’ve been working with and the conflicting advice they’ve been giving us.”
And suddenly, I had my blog topic for today.
It’s a great thing that startups today have access to all kinds of resources that weren’t always available to entrepreneurs in the past. Pitch coaches, mentors, advisors, counsellors, guides — these sorts of people are lying pretty thick on the ground. They play a key role at economic development agencies, accelerator programs and incubators. They are, without a doubt, a critical part of the startup ecosystem and, collectively, they create huge value.
Individually, their quality and value varies widely.
Entrepreneurs entering accelerator programs are warned about “mentor whiplash,” that potentially company-destroying injury that can be inflicted when diametrically opposing advice is offered by different mentors. “Go direct,” says one mentor; “Only a channel strategy will work in this marketplace,” says another. “You’re an enterprise play,” says one; “This is a consumer product,” says another. “Your service needs to be free so you can build a huge subscriber base,” says one; “You must charge for this from the outset,” says another.
You get the picture: Torn between extremes, entrepreneurs, and especially young entrepreneurs, are deer caught in the headlights, paralyzed with indecision until they’re mowed down.
It’s not that any of the conflicting advice was necessarily wrong; intelligent, knowledgeable and well-intentioned people can disagree vehemently.
The problem is that many of these mentors and advisors are offered up to companies who have no control over their selection and little context in which to evaluate their real capability. Their counsel is usually free — prompting this obvious aside about getting what you pay for — and, because these are usually seasoned, experienced people giving freely of their time and immense wisdom, entrepreneurs feel obliged to give the input the full weight of their consideration. Or, the individuals, no matter how knowledgeable they might be about their area of expertise, are simply not qualified to evaluate a company that lies outside that area of expertise.
And yet they do.
One of the worst examples of what can happen is something I have experienced firsthand while listening, along with other mentors, to a company describing its proposition. One of my fellow mentors, who had absolutely no experience in the sector in which this company was working and who shared not a single meaningful attribute with the company’s target market, essentially said, “I’d never use this so therefore you don’t have a business.”
So what’s an entrepreneur to do, especially when faced with a buffet of free advice and no way of knowing which dishes will genuinely nourish his growth?
The answers can be found in sound marketing strategy, people. Ya, I know; everything comes back to marketing strategy with me. But why would you approach this critical task any differently than you would approach your customers? Why would you waste time with an advisor who was not properly qualified? Entrepreneurs need to be a whole lot more discriminating about who they listen to. They need to be a much more ruthless in triaging the useful from the waste of time, just like the best marketing messaging attracts only genuine prospects whilst turning everyone else away.
It’s okay if your investor pitch — or any other marketing message — fails to be understood by the vast majority of the people who hear it so long as it is picked up by those with a genuine ability to do what you want them to do with it.
Image: Vinod Narayan