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Willer @ the CEC: Selling your idea
A couple of times last week, I got into conversations with founders of startups about raising money or recruiting talent or finding customers. This topic also came up in a panel discussion put together by SLATE last Wednesday titled Invent Your Future as we discussed what were the most important skills an entrepreneur needs to have.
The most important thing you need to be able to do as a founder of a startup is the ability to passionately sell your idea. You need to sell it to potential employees to recruit great talent, to potential customers to sell your services or cut partnership deals, and to potential investors to raise capital. You don't need to have a lot of experience actually being a salesperson, but you do need to be so excited about your business idea that people want to join your mission to help you build it into a massive success.
Harper Reed talked about this in his talk at the CEC Startup Forecast in December - follow the ABC's: Always Be Closing. If you haven't heard of this concept, check out this Glengarry Glen Ross clip starring Alec Baldwin (3:23 marker). Whenever you are out at a startup event, a networking event, a panel discussion, an industry breakfast, a meetup, etc - whenever you are around a group of startups folks, engineers, developers, designers, angels, investors - always be closing them on why your idea is amazing and how you're going to create an incredible business out of it.
Here are 5 key points to cover when discussing your idea:
- Problem - Why is this going to disrupt? Does there have to be a better way? Why is this a big problem that really smart people will want to work on?
- Market Size - Why is this a problem for a large market? Let's just assume it's huge....
- Idea/Solution - What is unique and game-changing about your solution?
- Strategy & Plan to Execute - An idea without execution is a hallucination, ChicagoBooth professor Waverly Deutsch once told me. Where is the revenue going to come from?
- Team & Advisers - Who's going to actually get this done? Why are they uniquely qualified to do it? When you need advice, who brings domain expertise to help you?
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I love that Glengarry clip. Kevin - your link is broken, it's: http://www.youtube.com/watch?v=y-AXTx4PcKI
I would add that you also need to always be selling to your customers, and Joshua's tip below is a good way to do this. If you only talked to those in the startup arena and don't go out to sell to your customers, your revenue will be limited to what you can raise. This money will only take you so far. You need to connect with your customers, who most likely reside outside the startup world. in order to generate revenue that will allow your company to continue to grow. If you don't have customers, it doesn't matter how much funding you raise, you will ultimately go out of business.
I would add that, in my experience, discussing those points in the context of a compelling story is the most effective approach. Describe how you deliver value in a story, i.e. how you made a difference for someone or some company (problem and solution), then how you made money from it (revenue model), how many more people / companies need the same thing (market size), how you will reach and service them (strategy and plan), and finally, why you are the right person to do it (team, etc.).