Three…that’s how many categories into which investors segment business ideas and the pitches by entrepreneurs. The first is that of “Market Maker”: think Bill Gates and Microsoft with the vision of putting “a computer on every desk and in every home” at a time when people didn’t have home computers. The second category is “Market Disruptor”: think Uber versus taxi cabs or Airbnb versus hotels and motels. Pitching a business in those categories is rare, as more than 85% of funding requests involve the re-packaging of an existing product or service, which represents the third category.
Attracting investors…including those on Shark Tank…to get your business funded is all about being unique, even if the product you’re presenting isn’t a new invention or innovation. For some background, check out my article on 7 Factors for Startup Success based on the philosophies of Shark Tank star Mark Cuban.
He believes that you need to find a way to make at least one aspect of your product or service uniquely your own, but presenting it in a way that has a “hook” for those listening. Too many entrepreneurs fall in love with their new product and prepare the bulk of their presentation focused on the technical aspects of that product. Let me be clear, investors don’t care one bit about how it is designed or how it works…just that it does work and meets a viable need in the market. That’s what will interest them and have them start their due diligence into the product, its patentability, and performance.
Warren Buffet on investing in Apple:
Consumer behavior is the key, according to Buffet. So how do you tap into that to deliver a winning funding pitch?
Focus on pain points of the target audience and how your product brings them a unique benefit. Here are few examples that I personally have come across recently and have led to success getting funded and achieving revenue growth in the market:
- New product for non-invasive surgery to replace invasive surgery with higher risk, longer recovery times, and higher cost to the healthcare/insurance networks.
- New product to address back pain with 2 shots per year instead of weekly therapy.
- Early and proactive detection of armed gunmen (called active shooters) for both indoor and outdoor settings versus products that only detect indoors or only detect outdoors.
- New product offering sales enablement through resource matching for internal sales teams instead of the existing alternative of collaborative workspaces, knowledge sharing, and content management that require significant user input.
Optimize Your Pitch
Re-think the focus of your pitch. Avoid droning on about the product and its technical specifications and start thinking about the features and benefits your product has and how it addresses pain points of your target audience. They have to be able to relate to it in a meaningful way. If Bombas was able to do it on Shark Tank to launch an athletic sock (see my Be Unique, Get Funded article)…not an exciting market space by the way…there are no end to the opportunities that exist for your product.
If you are an entrepreneur looking for funding and would like to present to potential investors through CONNECTpreneur, please reach out to me about the next meeting scheduled for July 29, 2021.
To learn more on how to stand out with an epic fundraising story, contact me for a complimentary consultation by phone at 314-578-0958 or by email at firstname.lastname@example.org. You find her on LinkedIn Profile at www.linkedin.com/in/ineslebow or her ETS website at www.transformationsolutions.pro.