Column from Florida Trend's Business Coach
We can all learn a thing or two about marketing from venture capitalists. That’s because when investors evaluate an opportunity, they ask a lot of hard questions about the business model, value proposition, go to market strategy, competition, and risk.
You need to think like a venture capitalist too -- even if you don’t need to raise money for your company. After all, you have common goals: to maximize return and reduce risk.
Venture capitalists know that it’s easy for people to get a little too close to their product or service and not clearly see the market opportunity and the strategy to achieve it. Asking yourself the same hard questions they pose to prospective portfolio companies will help you sharpen your focus and grow your business.
Investors worry about three main areas when looking at a company -- people, market, and product or service. They’ve become experts at doing opportunity assessments and look beyond brilliant innovation. By thinking like a venture capitalist, you’ll be in a better position to attain sales and maximum profits today.
The right people. Do you have the team on board with the experience needed to deliver the product or service and execute the go to market strategy? If your business has limited resources, you can fill in any talent gaps by having outside advisors. Forming strategic business relationships with companies that touch your target audience in some way is also part of the people equation. The same goes for your vendors. Make sure those business alliances fit in with your overall strategy and play a role in your tactical activities.
The right market. Are you driven by the big the problem you solve and target only your “I’ve got to have that” audience profile? Do you really understand the market and know how to differentiate yourself in it? What about the barriers you’ll encounter -- have you defined these and planned strategies and tactics to overcome them? And can you clearly articulate your offering’s value to the market? Another thing to think about -- many professional investors believe that early in a company's life you need to acquire your customers for as low a cost as possible. You too can significantly impact a market and become a leader in your space without spending a lot marketing dollars.
The right product. Venture capitalists love a highly focused product offering with a singular value proposition that’s disruptive. Do you have a handle on the functional differentiation that will make you disruptive to the competition? How easy will it be to duplicate your product or service? The right people, market, and go to market strategy can overcome product or services weaknesses, but only to a certain extent.
Try this. Pretend to be a venture capitalists that has 500 hundred million dollars to spend on investments in companies. You need to triple that to 1.5 billion dollars in ten years. What companies would you invest in? What do they have in common with your business? And would your company make the cut?
Think like a venture capitalist. It can help you improve your strategic planning process, allowing you to build an incredible plan of action.
Ron Stein is the founder and President of FastPath Marketing (www.marketing-strategies-guide.com). He has more than 20 years experience in sales, marketing, and business development, working positions ranging from salesman to vice president of sales and marketing to CEO of startups with industry leaders such as Motorola, VideoServer, Paradyne, and SercoNet. Ron is a member of the advisory team at the Tampa Bay Innovation Center, a nationally recognized entrepreneurial and startup accelerator for the state of Florida. He can be reached at 727-398-1855 or Ron@FastPathMarketing.com