Where everybody has a similar idea, it’s about placing a bet on who is actually going to win
As an early-stage investor, the story is too often the same for young start-ups. You’re sat listening to a pitch for funding from an eager-eyed entrepreneur, who comes across as if she’s just discovered a scandalous state-secret, and you should consider yourself fortunate that she’s going to share this with you. They elaborate that they have an idea that’s never been done before. Apparently, it’s also going kill Google. She finishes by asking you not to steal the idea, after you earlier refused to sign an NDA.
They may well be justified. Once in a blue moon, an idea is so revolutionary that it can shake the world by itself; think Satoshi Nakamoto and the white paper that gave birth to Bitcoin.
More often than not (like, seriously), we’ve probably heard it all before, often on the same day. Everyone has similar ideas. Everyone copies them or changes them slightly. Usually a product is an adaption of this or that; there are probably competitors already doing it.
You may even have some traction through a beta product, though, if you’re going for early-stage funding, this may be thin on the ground.
Yet, people do invest in ideas or super early-stage products. What’s the trick? Don’t forget to sell yourself. Treat the pitch like a job interview.
Founders often relegate their experience and background to the appendix of a pitch deck and glance over it at the end, with an indifferent, hasty reference to their team; “yeah, I have CTO…she’s awesome and can code and stuff.”
The reason why investors back ideas is because of the team, not the idea. Where everybody has a similar idea, it’s about placing a bet on who is actually going to win. It’s about backing the person to get it done. Successful start-ups are all about execution; Facebook wasn’t the first social network, Google wasn’t the first search engine and WhatsApp wasn’t the first messaging app (heck, it’s even killing off SMS). That’s why investors don’t worry too much about the competition.
So, don’t forget to sell your number one asset; you. Why is your team the one that is going to rise above the rest? You need something that gives you an unfair advantage. Have you founded a successful company before? Do you have expertise in a particular area? Do you know things that other people don’t? Do you have a network that opens doors others find closed? Can you get closer to the customer than others (i.e. are you solving a personal or near personal problem)? Is your CTO a world-class expert in the field? Does your queen or king of all sales people actually have a proven track record?
If answering these gives you an edge, you’ll get the investor’s attention and they won’t see you as just another fish in the ocean of start-up failures. Don’t just stick a nice photo of your team in there and put ‘my COO is awesome.’
Take the time to sell yourself.
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