“Who is your customer? Can you create a profile of your ideal
customer? How do you find them or do they find you? Which set of customers are
your most profitable? With which customers do you think a long term relationship
can be established? How many of your customers do you meet regularly? How do
you charge your customers? Who do you compete against? Why do you think you’re
better? How do you think you will knock the socks of your competitors? What
other products and services are you willing to give up to focus on the most
profitable ones? How do you sell? What is the cost of acquiring a customer? How
long does it take from the first customer contact to receiving an order and
then to receive payment? What the specific value proposition to your customers
– why should they buy from you and continue to do so? What exactly do you do?
What made you choose this offering? What is your personal experience with the
pain suffered by customers”
The above is a sample set of the questions asked by a panel at a
recent selection of the top entrepreneurial companies. While only a handful
were able to respond meaningfully, convincingly and forcefully, the vast
majority hadn’t either thought of these questions or weren’t able to articulate
their thoughts or were very obviously uncomfortable presenting to a panel.
“Have you contacted the CEO?” I asked the entrepreneur who I’d
introduced to a CEO of a company. “No, not yet” replied the entrepreneur. “Why
not?” I asked quite flabbergasted. “It has been only 36 hours since you did the
introduction and I thought I’d wait for some time before writing to him”. Here
was a sales opportunity and the founder of a startup was worrying about
waiting! In another case, the founders had to pushed very hard to reach out to
potential customers and partners by way of attending industry conferences,
becoming members of e-groups, connecting with other players in the eco-system,
meeting members of the press and the like.
What is it that prevents or inhibits the founders of a startup
from aggressively peddling their company’s value? What is it that prevents or
inhibits them from forming partnerships, forging alliances and pursuing sales
leads? As India becomes an increasingly market oriented open economy, the “build
it and they will come” mindset has to give way to “build something the market
desires and make sure that the market knows it”. The production oriented
approach has to give way to a market oriented one. As a culture, we’re
naturally inhibited about talking about ourselves. It isn’t right. It is a sign
of immodesty to tom-tom one’s own achievements and offerings. But as the saying
goes, if you don’t talk about yourself, who else will? The rest of the market
will then inconveniently and inappropriately perhaps, position you because you
refuse to position yourself. As Jack Welch, the legendary Chairman of GE wrote
- “Control your destiny or someone else
will!”
Communication and presenting skills are crucial as well. In the
limited time available, one has to learn to make a compelling and persuasive
pitch. There are no short-cuts to this effort but a lot of practice, taking of
feedback and learning are required. No different from any other activity.
Perception is reality so it is crucial to make that pitch work. Clarity of
thought, focused approach to customers and markets, understanding of what the
value to customers are of no use if the person listening doesn’t hear it.
Very many years ago, a very senior well respected VC from Silicon Valley told me this:
All I want to know is:
-
Who are you?
-
What’s the problem you’re
solving?
-
Why will you knock the socks of
competition?
-
How will you make money?
It is not unusual to find the names of the founders and management
team missing from presentations or even web-sites of Indian startups. But
remember, people don’t do business with spreadsheets and presentations. They do
business with people. So it is always a good idea to talk about the team and
its background and why it is doing what it is doing!
So why this strange modesty in discussing oneself and one’s
vision? Churchill once famously described someone as “….is a modest man with
much to be modest about!” but a confident entrepreneur surely cannot be a
person with much to be modest about? Remember, there’s a thin line between
arrogance and confidence. Arrogance precludes learning, includes bombast and
demonstrates a lack of humility. Confidence ensures humility, learning and
certain relentless and adaptable focus.
So please remember, that selling and communication skills are
critical for the founding team of a startup. The first set of sales have to be
done by the founders. A sharp understanding of their customers, the value being
created and the ability articulate this value are skills that are honed through
practice. These skills cannot and should not be wished away as being
distasteful. Remember company building involves a disproportionate share of
these two invaluable skills.
Sanjay Anandaram is a passionate advocate of entrepreneurship in India; He brings close to two decades of experience as an entrepreneur, corporate executive, venture investor, faculty member, advisor and mentor. He’s involved with Nasscom, TiE, IIM-Bangalore, and INSEAD business school in driving entrepreneurship. He can be reached at sanjay@jumpstartup.net. The views expressed here are his own.