How to Analyze the Feasibility of your Business and Translate Your Ideas Into a Great Pitch for Investors

In recent weeks I have been attending several start-up sessions around the Toronto area. In general I would have to say that entrepreneurs are still struggling with their pitches. Ask them basic questions about competition, market size and you are met with puzzled faces or a lack of understanding of their markets.

As a result, I'm offering the following links and information to new founders who are struggling with these questions. The goal of this post is to simply provide you with tools and starting points to determine the viability of your idea. In subsequent postings I will explain each in more detail.

Start with the basics, I personally love the simplicity of Dave McClure's Start-up Metrics for Pirates or AARRR. This isn't a replacement of a business plan, but it's a great way of forcing founders to think about how their business will grow and sustain itself. Although the title is a bit cheesy, I believe the idea itself is a great 1st step for new start-ups.

AARRR stands for;

• Acquisition - how will you acquire your customers?
  
• Activation - how will you get them to sign-up, download, buy?
  
• Retention - how will you keep your customers?
  
• Referral - how will you get your customers to refer you to their friends?
  
• Revenue - what is your revenue model?
  

These are the building blocks of any good business plan, but can be completed easily. I suggest you read the full presentation to understand the metrics behind the above points. If you can't answer these questions stop here and give it some thought.

If you have progressed to answering the above questions effectively, I offer the following requirements in order to pitch your business successfully to investors. Note some of this comes from a presentation I attended run by Daniel Mothersill - President of the National Angel Capital Organization and the rest comes from my own personal experience.

What is the purpose of a pitch? It is not to impart how great your technology is. It is to sell investors on how unique your business idea is and how it will make money for the investor.

In order to successfully pitch to investors your pitch must include;

1. Customer Pain or Unfulfilled Demand - what it is and how your solution will solve it
   
2. The Market - What is size of your market? What niche are you playing in? What cross markets can you sell to? Is the market growing?
3. Market Share - What size of the market are you targeting to capture?
4. Product / Service - What is it? Is it scalable? Why is it unique or why is it better than what's out there today? Why would people switch? What is proprietary?
5. Go-to-Market Strategy - Who are you targeting? How long is your sales cycle? Are you using a direct or channel approach to selling? How much will it cost for your sales team / strategy?
6. The Team - Who is on your team? What expertise to they bring to the team? Domain expertise? What is their past start-up history? Who is on your advisory board or board of directors? Dave M suggests that this makes up 60% of the investment decision!
   
7. How you Got Here - A slide which indicates how you got to where you are. How much did you spend? What did you produce with that investment? Patents filed? Team built? Major accomplishments?
8. Strategic Alliances - Who have you aligned with? What key customers have you already landed?
9. Milestones - Where are you going? Revenue projections? How long to positive cash flow?
   
10. Competition - Who solves this need today? How are you better? Who are the 800lb gorillas? How can you switch existing competitor customers? How will your competitor react to your product/service? What is the barrier to entry for your product/service?
    
11. Financials - 5 year projection of financials, simple Revenue, Expenses and Net Income. How much investment are you looking for and how will you use it?
12. Conclusion - restate the Pain and how you will solve it, highlight team strengths, why you are better than the competition, and how your key customers will help you grow.

In the following posts, I will go into more depth on each of the above 12 points.

Enjoy.

How social networking has changed political activism.

It was some 7 years ago, I was talking down a trail with a friend in Algonquin National Park, discussing the merits of political activisim in it's current state. My argument claimed that since the 60's there had been very few learning’s by protesters, in their ability to influence change. It seems as though the same tactics which we saw so prevalent in the past were still being used today - gather - protest - leave.

It seemed that little technology was used in political activisim. Granted there were some online forums which assisted groups to organize themselves more effectively, but the medium in which they delivered remained the same. Due to this - media rarely covered the message but rather focused on the few bad apples that turned things violent.

Enter today's social networking environment, where people are using their new social voice through online channels to convey their message more effectively. I use the world people - because it appears that although an activists may start the voice, it's the every day people that had never before been participants in activisim, which are making the message more visible.

Browsing today's Facebook updates - you will see many of your friends with the status;

No one should die because they cannot afford health care, and no one should go broke because they get sick. If you agree, please post this as your status for the rest of the day.

Clearly this message is more a national issue related to the US and one which has been covered in depth everywhere. However micro-political statements, seen recently in Toronto after the recent traffic incident in the city. Statements about the need for bike-lanes and better attitudes toward the cycling commuters are more prevalant than ever. Organized groups paid tribute by quickly organizing a bike "sit down" at the scene. More effective however are the topics being brought to the attention of every day citizens regarding the North Americas 5th largest cities lacking bike infrastructure.

Are politicians listening?

It seems as though the media is at a minimum. The upside is that the attention is again favouring the issue rather than the battle at the rally. This is the first sign of advancement in protesting in nearly 50 years. With the addition of commentary on these articles, blog posts and Facebook groups - our society is having positive open debates about issues.

Are those who can make these changes listening? I certainly hope so. There are software vendors who are now taking advantage of such "communication". See Ascentum which operates a software packaged called Dialogue Circles - aimed at Governments opening and recording discussions on key issues.

What are your thoughts on the evolution of the protest?