“To save one child from abuse and prevent one suicide
while earning more than one billion dollars for investors.”
This is my new company’s mission: Saving one person from abuse or suicide will be a success. (Once I’m ready to unveil that company, I’ll share the domain and information. You can email me for more information in the meantime.)
Doing so while earning over a billion dollars for investors means we will have saved many thousands of people. (and their families)
We have a bold and ambitious goal. As we accomplish our mission, tens of thousands of lives will be improved.
If you want to learn more about we will be making a difference, feel free to contact me.
This post, however, is not about my new venture. It’s about the challenges all entrepreneurs face when demonstrating why their firm stands out from the crowd and attracts investors’ attention.
The Entrepreneur’s Dilemma (and investor’s challenge)
To the dismay of many entrepreneurs with the “next big thing,” the more choices investors have, the fewer decisions they make. Often, it’s not a matter of fewer decisions but of entrepreneurs not standing out enough to be selected for investment. Standing out from a crowd is complicated and hard work.
Here are the top ten things entrepreneurs must do to differentiate themselves:
- Be a Unicorn in a field of Sparkles!
Investors have seen it all. To capture their attention, your business must offer a truly unique and innovative idea that solves a genuine problem affecting many people or costing companies a lot of money. It’s not enough to be better than your competitors; your offering must be distinctly different.
How to be a Unicorn in a Field of Sparkles: Conduct thorough market research to identify gaps and opportunities. Develop a unique value proposition that clearly differentiates your product or service. Use customer feedback to refine your offering continuously.
2. Have a Team for Your Unicorn-in-Training.
Investors are betting on you and your team, not just your idea. To stand out, you need a team with diverse skills and experiences, including technical expertise, business acumen, and industry knowledge. A passionate, driven team willing to go the extra mile is essential.
How: Recruit team members with complementary skills. Consider forming an advisory board with industry experts. Provide ongoing training and development opportunities for your team to ensure they stay at the forefront of their fields.
3. Demonstrate Viability and Show Traction Early.
Early-stage investors understand there’s more evangelism and belief pre-revenue. Showing traction, whether through early sales or other forms of validation, de-risks the investment. Be cautious with initial sales agreements to avoid capping your valuation. Revenue is always the best deodorant.
How: Launch a minimum viable product (MVP) to gather early feedback. Get commitment and solicit support from others who are willing to participate in your venture. Even pre-MVP, you can gain support from help groups whose support will help you along your way. Once you have a Beta version of the product, immediately begin to track key performance indicators (KPIs) such as user growth and engagement. Use pilot programs or beta tests to demonstrate market interest and refine your product.
4. Have a Clear and Compelling Vision.
Your vision should be concise, compelling, and inspiring. What problem are you solving? How will you change the world? What does success look like in the short and long term? Articulate a vision that excites investors and back it up with facts.
How: Develop a succinct elevator pitch that encapsulates your vision. Create a vision statement and share it with your team regularly. Use storytelling techniques to make your vision relatable and inspiring.
5. Execute Well.
A great idea needs a solid execution plan. Investors want to know you can turn your vision into reality. Understand the challenges and risks and have a plan to overcome them. Admitting your limitations and how you’ll fill gaps is a strength.
How: Develop a detailed business plan outlining your strategy, goals, and timelines. Use project management tools to track progress and ensure accountability. Regularly review and adjust your plans based on performance and feedback.
6. Differentiate Your Business.
Show why your business is desirable and advanced enough to attract clients while protecting against competitors. Identify unique technology, proprietary data, or network effects that make replication difficult. Stay ahead of competitors by evolving your competitive advantage.
How: Identify and protect your intellectual property through patents or trademarks and a policy of trade secrets, if possible. Develop a unique brand identity, including logo, messaging, and tone. Engage in competitor analysis to stay ahead and innovate continuously.
7. Be Efficient.
Demonstrate meaningful traction without burning through cash. A lean, agile approach to building your company, with a willingness to pivot, shows efficiency. Efficient spending attracts investors.
How: Implement lean startup principles to minimize waste and maximize value. Use data analytics to track spending and optimize resource allocation. Regularly review your budget and financial performance to identify areas for cost-saving.
8. Stand Out in a Crowded Market.
A strong brand and identity differentiate you from competitors. Have a clear, compelling message and a consistent, recognizable visual identity. A memorable brand attracts both customers and investors.
How: Develop a strong online presence through a well-designed website and active social media profiles. Engage in public relations activities to build your brand’s reputation. Either have someone on staff who handles this or outsource as much as you can. The core messaging and content should be in-house, but what supports it can be outsourced.
9. Be Passionate and Coachable.
Investors want passionate entrepreneurs who are open to feedback and growth. Being coachable and willing to adapt is crucial. Lifelong learners who improve and evolve are more attractive to investors.
How: Seek mentors and advisors who can provide guidance and feedback. Attend industry conferences and networking events to learn from others. Regularly solicit and act on feedback from investors, customers, and team members.
10. Tell a Compelling Story.
Investors love compelling ideas and stories. Make an emotional connection by sharing your inspiration, challenges, and the difference you’re making. An authentic, emotional story stands out in a sea of pitches.
How: Craft a narrative that highlights your journey, challenges, and successes. Use multimedia tools such as videos and infographics to make your story more engaging. Share customer testimonials and case studies to illustrate the impact of your work.
Always Remember your Audience!
Investors face a paradox of choice, with many options bombarding them. A compelling vision excites them, making decision-making smoother. Even if an entrepreneur does everything right, securing funding is challenging.
Evaluating numerous options is fatiguing. Without a clear, compelling, and differentiated value proposition, you won’t capture the attention of overwhelmed investors. Energize them with your offering and make them excited to work with you.
Standing out in the startup ecosystem is challenging but not impossible. By focusing on these key factors, entrepreneurs can differentiate themselves and increase their chances of securing funding. Even if you do everything right, there will be challenges.
Ultimately, the key to success is staying focused, passionate, and pushing forward despite adversity. Entrepreneurs who stay true to their vision and values can build companies that stand out and make a real difference. In the end, making a difference in people’s lives is what really matters.