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Entrepreneur Office Hours - Issue #21
How to demonstrate "enormous potential," how to attack a massive market, and how to know when you're an entrepreneur
It’s my 21st issue! If you’ve been reading along for a while now, you’ve probably figured out that, in general, my articles fall into two categories: practical/actionable advice and squishy thought-pieces where I muse about the state of the entrepreneurial world.
I readily admit the practical/actionable advice is more useful than the thought-pieces. So let me apologize, in advance, that this issue is mostly the latter. Still… I think it’s pretty good stuff if you’re willing to spend a few minutes thinking about entrepreneurship rather than… you know… doing entrepreneurship.
On the practical side of things, I hope you’ll enjoy this issue’s Q&A section where I break down the structure of a good angel-style pitch.
As usual, if you found this email useful, forward it to other people who might enjoy it, too. And keep the great questions coming, and I’ll do my best to answer. You can reply to this email, @me on Twitter, or message me on LinkedIn.
Marker, the in-house business publication over at Medium, published another one of my articles. This one is an op-ed that explores the problem with Apple’s battle against Facebook over data privacy. (P.S. Bonus points if you can guess my favorite sentence. I may have come up with the sentence first, and then decided to write an entire article just as an excuse to use it.)
The Peace Corps Volunteer Who Pioneered Commerce Marketing Automation
How do you compete in a huge market with tons of bigger and better-resourced competitors? Find out on this episode of Web Masters when I speak with Joe Colopy, founder of Bronto Software. Links to the podcast are below, and here’s a bonus article based on mine and Joe’s conversation: The Secret to Fighting Bigger, Better-Resourced Competitors — From the Founder of Bronto Software
Listen to the episode on:
…or search “Web Masters” wherever you listen to your favorite podcasts.
When people describe themselves as "entrepreneurs" in their LinkedIn bios, what exactly to they mean? I've been teaching entrepreneurship for years, and I honestly don't know. Do you?
Office Hours Q&A
Not sure how many would have already complimented about your extraordinary to the point article "Here’s the Real Reason Entrepreneurs Struggle with Fundraising." Needless to say, I am in the same boat. Wondering if there is any guideline/template for "startup’s enormous potential" can be used for angel investors.
For those of you who didn’t read the article (and why not?!?!?), the core thesis is that professional investors tend to invest in progress, while amateur investors (i.e. angels) tend to invest in potential. Burhan wants to know how founders should present a startup’s “enormous potential.”
The simple answer to this question is that yes, I can share some guidelines. The complex answer is that, while I can share some guidelines, remember the guidelines are only a rough outline intended to get you thinking. However, as the entrepreneur, you still have to do the hard work of putting together a compelling narrative.
Before sharing the guidelines, I need to remind you that every pitch is different because the circumstances and audience are always different. So the first step of any pitch is to think about your goal and your audience. Here are the questions you should be asking yourself:
What’s my short-term goal in talking with this person (or people)?
What’s my long-term goal in talking with this person (or people)?
What does my audience already know?
What do I want my audience to know by the time I’m done?
Those questions are critical because they’ll help remind you that pitches aren’t for you. Pitches are for the people listening. I mention this because too many founders forget the importance of empathizing with their audience, and, as a result, they fail to deliver information in ways their audiences will understand and appreciate.
Once you’ve carefully considered your audience, presenting your startup’s “enormous potential” is basically an act of storytelling. In other words, because you don’t have data and evidence, you’re not describing how things actually are. Instead, you’re describing how things could be. It is, in a sense, fiction. That’s not to suggest you don’t believe the story you’re telling or that it won’t eventually be true. It’s just not true in the moment you’re telling it. It’s aspirational.
Because a pitch about a startup’s “enormous potential” is essentially a story, this is the point at which I like reminding people that the vast majority of compelling stories follow very similar narrative arcs. For me, that arc is best described by Joseph Campbell as “the hero’s journey.” You could spend an entire career studying Campbell (and I definitely recommend reading some of his books), but the basic gist is that every hero story you’ve ever read -- from Harry Potter to Lord of the Rings to The Hunger Games -- follows the same basic plot points.
The same is true for compelling “enormous potential” startup pitches. The points you’ll want to hit look something like this:
Introduce your company/team
Educate your audience about the problem
Demonstrate the scope of the problem (i.e. how big of a problem is it?)
Describe how you discovered an innovative solution
Present the solution
Show how the solution has value
Show how much potential the solution has if scaled out to everyone with the problem
Show how you’re on your way to scaling the solution for everyone [THIS IS THE PEAK OF YOUR NARRATIVE]
Explain your “ask”
Provide a final “coda” or “one more thing” moment (Steve Jobs was famous for this) that ties everything up and provides a pleasant sense of closure
Here’s a visualization of the same information that I sometimes use with students:
Before wrapping up, I want to remind you, again, that this is a rough outline. I could write lots of articles discussing each piece in the arc described above. But hopefully this guide gets you started. Good luck!
Got startup questions of your own? Reply to this email with whatever you want to know, and I’ll do my best to answer!