Of the almost 100 startups worthwhile I’ve reviewed out of say 100,000 ideas heard in my lifetime, it’s amazing that still that over 95% of them are poor ideas ill conceived with no context for success or any coherent idea if anyone of substance actually cares. Yeah, I’m not sugar coating anything. I never do. It’s why my group charges so much less….we get right to the point.
Here are a few key questions to ask yourself and your emerging team about that great idea. I’m not really talking internet stuff. That’s a whole different world with a half-life of about 15 seconds. I’m talking real products, manufacturing, consumer products you can hold and use, medical products, durable goods and the like.
If you have a really great idea, it moves mountains and changes lives. No Big Data needed. If you need Big Data, that’s the first sign it’s not a great idea. Have some big or exemplary potential customers whose financials change radically? A few luminaries? Now I’m getting interested…
1. An order of magnitude or so…in time or quality
If you don’t move the needle, your idea is likely just an annoying idea. What does that mean? Cut manufacturing time by 50% to 90%. Take the time reduction and translate into something meaningful to the manufacturer’s customer, like delivery in days versus weeks or weeks versus months. Travel time cut in half. Get a ride anywhere, anytime and know if the driver rates.
Example: One high speed, ambient curing composite technology could cut windmill blade manufacturing times by 80% or more with a better, less failure prone product. Wind energy lead times are years right now. That’s billions in pent up sales and profit. You just brought it forward a decade. That’s called impact.
2. Move the profit marker – 10% or more, preferably 20% or more
We often call this the rule of ten’s – improve your customer’s and their customer profit by 10% or more, and it’s a great idea. Hell, they spend millions for 0.5% with a Big Ten consulting firm…be ten times better or more and you will get some attention.
Example: Changed cabinet door finishing so that $10 to $25 door upgrades cost 50¢ versus $6. Boosted potential margins by an absolute 10% tic across the likely order mix.
3. Get a real customer prospect – before you form the company or talk to any investors
If you can do the above two, then that interested someone, even if you don’t have the product now, should be willing to write a nice, quantified note that says if you can do this for real, it’s big and can transform our business and if you get funded we will work together collaboratively to make it happen.
Example: Demonstrated we could likely cut emissions and beverage can coating production times by 90%. Did it with a ten second demonstration. Giant prospect wrote the nice letter and invited us into all of their facilities.
4. Get a customer’s customer too….
That number three – do it again, but with a customer’s customer.
Example: Cabinet producer’s customer said if we could cut order delivery from 8 to 12 weeks to a week or two, orders that actually ended in a delivery would likely double. Wrote a nice email.
5. Find a few champions – people, not companies
You don’t sell to companies. Ever. They actually don’t exist as personalities. The people who work for them do. You sell to them. So, to get their attention, you must first be in their top one to three of mind and then you must represent potential success more so than potential disaster and embarrassment. If you are not, move on. Period. They have better things on their mind to work on. If you are in the top three and can be that pathway to a promotion, career advancement or whatever helps fulfill their dreams, then you will likely help the firm and make a sale if everything else actually works out.
6. Oh yeah…Have a demo to prove you really have something
The power of the visual aid. Prove your technology. Right there. Now. Let them try it. Don’t hurt anyone. No fires. Not a perfect product either – just the proven potential.
7. Make sure all you need is time and money and not fundamental scientific breakthroughs
There is nothing worse than “We just need this one big breakthrough and that’s what the money is for….”
8. Get an independent Board of Directors together
Not the whole board. That’s illogical. Just the independents. Get real icons of the business, or at least some demi-gods. Unless you are Elon Musk, or someone similar, you are really an unknown entity as a team or founder. Get some real names to believe in you by doing all of the above for them and now you will get some financial attention.
Example: Put together an iconic board for one materials startup. Got a call from a top three VC firm in the space who said “Most don’t have one of these people on their board and you have two. I guess I should be talking to you”. We raised ten’s of millions in the end.
9. Research your prospective investors – especially angels
Doing all of the above and not even researching you actual people in these VC’s or investment groups, like the angels, is suicide. You will be branded as annoying and your idea as likely as bad as you even if it is not. Network. Research. Get introduced. Ask for advice and help. Build relationships. Find the exact right investor champion, especially in angel groups. The guy with relevant, real experience I the space for a real job, then for investing with success in that space. That guy or gal will do the sell for you in tandem. They really will.
Example: Targeted in the end one angel at QCA who knew the chemical business and manufacturing, had worked in the business and sold a major business he had started. We did all of the above, a crisp 5 slide deck and viola, a 20 minute intro meeting turned into a few hours and $2.5 Million over six months from 75% of the angel group.
There’s no guarantee, but I’ll bet that of you do all of the above, your idea will be real and will get funded assuming you have an A-team. That’s another post entirely.
We’d love to talk! We are real deal innovation and startup experts – $2.5 billion in annual innovations sold globally can’t be wrong. To learn more, give us a call or review our award winning capabilities, products and examples visit us at elemence.net