An article we liked from Thought Leader Chris Neumann of Panache Ventures:
YOU KEEP USING THAT WORD...
This year marks the 35th anniversary of The Princess Bride, one of the funniest movies of all time.
The most memorable line in the movie – which has spawned countless memes – comes from Inigo Montoya, who after hearing his boss Vizzini exclaim “inconceivable!” for the seventh or eighth time, declares:
I can’t help but hear Mandy Patinkin’s voice in my head when some founders pitch me their startups. Not because of mistakes in language or grammar, but because many founders misunderstand how certain words and phrases are interpreted by investors.
Here are 5 of the of the most common phrases that founders and investors interpret differently:
1. We Haven’t Spent Any Money on Marketing
See also: “All of our user acquisition is organic”
What Founders Think:
Our product is so great that users/customers are flocking to us. We haven’t had to spend any money on marketing…just imagine how awesome it will be when we do!
What Investors Hear:
We haven’t given a single thought to how we’re going to acquire users/customers outside of our personal networks.
How To Do It better:
We haven’t done any paid marketing yet, because we were focused on building our MVP and had enough users in our [waiting list / referral list / etc.] to allow us to get meaningful user feedback. Once we finish fundraising, our #1 priority will be developing our go-to-market plan and user acquisition channels. In our early testing, the product has really resonated with [x, y and z personas]. We think we can acquire more users like that using [a, b and c strategies]. What do you think?
2. Our Pricing is Low Enough to Avoid Procurement
What B2B Founders Think:
Look how smart we are! We’re getting the most revenue possible while keeping sales cycles short. This is awesome!
What Investors Hear:
We’ve completely avoided going after bigger contracts that involve a procurement process / multiple decision makers / complex sales (in other words, we’ve been avoiding “real” enterprise sales).
This has two possible interpretations, neither of which is positive:
- We still have to learn how to do enterprise sales, which is going to take time
- We’re too scared to try “real” enterprise sales (which is going to cap our ACV)
How To Do It Better:
So far, we’ve intentionally priced our product below the procurement threshold so that we could gain a foothold with our target customers and prove out our MVP. We believe that there’s the potential for $x/year in revenue from some of these customers, which will obviously push us into...
Read the rest of this article at chrisneumann.com...
Thanks for this article excerpt and its graphics to Chris Neumann, Partner at Panache Ventures.
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