If I had a dollar for every unstructured idea or venture I’ve been pitched over the years, I’d have a lot of money. Virtually all these pitches have come without sound business models, an understanding of the competitive landscape, or even a lucid explanation of the intrinsic value proposition the idea is satisfying.
Okay – not everyone comes out of the gates fully loaded, but there’s a base minimum that entrepreneurs need to do to validate their ideas before asking other people to invest cash or jump blind into a joint venture. Almost irrespective of business, there are fundamentals that you (and any prospective investor or partner) need to know. Conveniently, they fall within a set format.
Start with a clear positioning statement: that should identify what the idea is, who it’s for, and the value proposition thereof. If it takes 15 minutes to start to describe your idea, all you’re communicating is that you don’t know it well enough. Next, identify the need in-market, followed a more detailed value proposition on how your idea will fulfill on this gap/need.
Critically, you’ll need to expose the business model – what’s the size of the target audience, what your cost per acquisition is, and the flow of revenue over the lifecycle of a customer/client. With the model clearly detailed, you’ll be able to follow up with your “underlying magic” – the stuff that makes your idea irresistible to your target audience and their in-market needs.
These next bits will take some leg work and elbow grease. You’ll need to define your marketing strategy, identify and substantiate your competitive landscape, and determine why you’ll be better than the other games in town. (If you think you’re the only one in the world to have have had this idea, you’ll likely not researching enough). Finally, show the 36-month financial projections, but make sure you’ve got a wealth of detail that backs up those numbers. Speaking of timelines, you’ll need to show where you are in yours: have you already got some modest investment or a prototype? What’s the path forward?
One more thing: you’ll need to define your pedigree and anyone else’s who is associated with the idea. Investors don’t pour cash into ideas, they invest in people with good ideas. You’ll likely be evaluated with as much or greater scrutiny than your ideas.
In presentation-terms, all this should be done in 10 powerful, concise slides. (And yes, it’s hard). By the end of the exercise, however, you’ll have a laser tight focus on your business and know exactly how (and what it will take) to succeed. That alone is something every entrepreneur should have, regardless of prospective 3rd party cash on the table.