BUSINESS PLANNING SERIES
Previously, we wrote about one of the most common – but almost always fatal – errors that we see in business plans – Incorrect Positioning vs. The Competition. Today we hope to give you some ideas about how to better present your company in a way that truly stands out.
Repeat this 10 times: “We MUST dramatically, effectively and persuasively contrast our company against its competition.”
Not very catchy, I admit, but true nonetheless.
The point is that you MUST ACTUALLY SHOW investors that your new product is so unique, so compelling and so relevant to your target market that you will displace and even eradicate your competition. (I guarantee you that your competitors will fight back. Plan for it.)
Here’s what we want to hear you say and what you need to truly believe —
We’ve carved out a niche. One specific enough that no one is currently targeting. Company G or F or Y might be in this space but they are not hitting this niche because of X and it is hard for them to move into this niche because of Y. In fact, G, F and Y are potential partners or possible acquirers (it’s never too early to be thinking about an exit) because your idea is similar but out of their reach.
We’ve identified a market too small for the established companies but big enough for a compelling business. (Big Enough ≧ $100 Million) Because the big players are too inefficient at building [whatever you build that is so special], they choose to ignore this market. If you believe that you can build a solid business in this market and can show good growth AND profits, might you not be an obvious acquisition target.
Our technology is so different that we’re changing the conversation. Although your solution may be technically complex, it must be easy to use and just as important, easy to describe. For example: how Netflix changed the way people watch movies at home. (Two times, by the way.)
Our target customers have historically solved this themselves or just lived with it. New technology makes your product possible.
New technology and modern thinking make this the right time. (iPhone = Right Time; Newton = Wrong Time.)
This industry has never seen a solution like this. It was previously impossible to address the market this way BECAUSE –
- It takes an incredible team. (We talked about this before – Dream Team – but it never hurts to make the point again.)
- New hardware/technology now makes this possible. (But be prepared to talk about why YOU are the best company to implement this new stuff.)
- New attitudes enable new workflows. (Google docs, Facebook, etc. now universally used by non-Geeks.)
- This now-commoditized industry makes the slightest edge a big deal. (Be prepared to talk about how you will stay ahead of competition. Remember, “Anything worth being copied will be copied,”)
- This industry is just now showing signs of embracing new technology. (Remember, “Anything worth being copied…..”)
- We have three lead customers signed up as alpha testers. (When you enable customer success, they will become your best evangelists.)
So now you can effectively contrast yourself against the competition without letting them define your identity. In fact, you may have just morphed your competitors into potential acquirers! Very cool! Investors love that.
Tune in next time and we’ll talk about another Fatal Error – No Real Path to the Customer aka If You Build It, They Won’t Come Without Your Help.