Help Thyself

I've had three meetings with folks involved in startups in the last 24 hours. In two cases, neither team could tell me what the heck they did nor why anyone should care. All I wanted was a series of short, concise statements.

I’ve been there…but I was 25 and had no idea what I was doing. These two teams had supposed “experienced management” that had no idea how to articulate the value of their product, who they wanted to buy their product, nor how they were going to find those folks.

In case anyone wasn’t paying attention:

Investors buy stock in your firm because they think you can make money. This means you have to completely understand your prospective customers and how your product will help those people.

Companies don’t acquire technology (except in very rare cases) so you have to have customers, lots of them, to get anyone interested in buying you out.

Investors make money off your risk profile. If the profile of your company doesn’t exactly meet the investor’s pre-determined risk profile, you’re out. Investors can always find more reasons not to do a deal than reasons to do a deal.

Focus doesn’t mean myopic. How do you want your firm to look in five years? How will you compete against the existing folks in your space? What happens if the genius that invented your product gets arrested for accidentally killing a hooker after a week-end bender? How will you go on? Why are you different? Why should anyone care?