No one is a psychic at TechCoastAngels. Yet, we believe there are keys to success for start-ups. For the past f weeks, myself and 6 other angel investors from TechCoastAngels of Orange County have screened more than 120 entrepreneurs in preparation for the “finals” of our fast pitch competition at TCA’s recent Celebration of Entrepreneurship event held on March 10. We listened to these entrepreneurs’ 60 second pitches which would be provoking enough to take a meeting with them and listen to their pitch decks.
In the past, I have looked at pitches of Unicorns and through my work and consulting practice reviewed or developed business plans, marketing plans, competitive analyses, positioning statements, branding architectures, and product road maps. So, in this blog, I want to put it all together and share what I see are the common themes that came out of the pitches, pitch decks, business, and marketing plans- at least from my perspective.
The following principles, which I call the 5 C's of Clairvoyant Companies are equally applicable to start-ups and on-going companies, large and small.
1. Conveying the story. The first “C” relates to conveying a story of what problem(s) the company is solving and telling a succinct story to entice the listener to ask for more information. If it is a start-up, the entrepreneur has to put the listener in the shoes of the person having the problem and convey the solutions. In the pitch deck, or the business plan, the CEO provides the details on how he or she will execute on the plan and drive financial results. Conveying the story clearly applies to all companies, particularly if the company wants to attract new customers and brand itself in the market as something special. Just think about the stories being conveyed by Nike and Under Armour or your favorite consumer or business product.
2. Customer Clarity. The second “C” relates to the target customers. Who is the ideal customer? Can you describe them and how do you find them? If you think about Airbnb, the customers are both the person wanting to rent his property for a short period of time, to the other customer, a person wanting to rent a room or house. The marketing and business plan should clearly indicate the problem the customer is facing and the solution offered. Additionally, the company needs to present a cogent case for their marketing tactics to drive awareness, adoption and use. Without clarity on the customer and how to find them and motivate them to action, financial success will not be achieved.
3. Competencies of the Company. This third “C” relates to the existing or needed competencies within the organization that can drive the financial results. It also relates to the intellectual property (IP), the culture of the company, and the way the employees think and execute the plans that are required to support the business or product. How do you acquire and sustain the competencies that are needed for success? Do you hire software developers on your team to build the product or can you outsource that skill? What is critical based on your strategy and your competition?
A competitive analysis and environmental scan may lead to the conclusion that skill sets that were once required are no longer required and new skills must be added. That may lead the company to a training program, a partnership, or replacement of existing resources with new ones. Some competencies such as Intel focus on technology as the prime competency and they develop the next generation of product even as they roll out the current generation. Others, such as Zappos, focus on the uniqueness of the customer experience and the culture of the company, both of which are hard to duplicate. Competencies help provide a “competitive moat” which brings up the next “C.”
4. Competition. This fourth “C” is pretty evident. No company operates in a vacuum. Both start-ups and on-going companies need to be aware of the existing and potential competition that exists. A competitor in the future may not be apparent today but may have the competencies, technology, leadership and resources to compete in a new and growing market. Five years ago would GM or Lexus have considered that Tesla would be a competitor or that Google would enter the realm of cars with their automated car program? A few short years ago, who would have thought that Red would be the camera of choice and used in three of the 2016 Academy Award nominees for best film?
With technology and apps changing so quickly, competition can change just as fast. Technology is the new enabler helping young entrepreneurs compete with established companies and with each other. Recall what Andy Grove, former Chairman of Intel said: Only the Paranoid Survive. Whether you are a start-up or an established company, be paranoid and keep your eyes open.
5. CEO vision and passion. We at TechCoastAngels say that we have to like the horse (the business concept) but must LOVE the CEO (the jockey and her team.) As we screened the candidates for our upcoming event, we looked for a CEO with passion and vision and who can relate to us, the investor. We wanted to find someone who had a history of success, was decisive, yet approachable and coachable.
Think back to the great leaders of businesses or coaches and CEOs of sports teams. Who is your model for a CEO with vision and passion? I personally thought Lee Iaccoca was great when he resurrected Chrysler. Jack Welch turned GE into a world class company with his vision to be #1 or #2 in his markets. Steve Jobs showed the world a new vision for technology. And Alan Mullaly took Ford after the great recession to a new level of respect and performance.
I trust that our C-Level Partner blogs and the ideas will help executives of start-ups and on-going companies be successful and also be used by executives to help them guide their companies to business success. C-Level Partners has been established to be a beacon for value creation. My partners and I would be glad to continue the dialog on what makes a successful company and help you optimize your business value and achieve your business goals. Feel free to reach me at firstname.lastname@example.org or call me on 949 439-4503. And if you enjoyed this blog please like it, repost, and retweet it.