02 Dec How to think like an Entrepreneur
I was involved on one of the due diligence teams associated with the Bend, Oregon Venture Conference last month. We analyzed business plans and listened to investor presentations from a group of young companies looking for investment. Ultimately, we awarded investments of $250,000 and $100,000 to two worthy teams of entrepreneurs whom we judged to “have what it takes” to build businesses that will hopefully make us all some money.
The due diligence process forced each of the investment candidates to consider a whole host of issues – not just what their business is about, but what is unique about their offering and what barriers to competition they are they building. One of the most revealing lines of questioning was asking how a company plans to obtain customers, and what is the decision process that customers must go through before they buy. While many technology entrepreneurs may give a lot of thought towards building competitive barriers into their products, they may not fully understand the barriers that prospective customers have in place with regard to researching and accepting new technologies.
Know your audiences
Successful businesses understand this and have a plan for reaching the right customers and working them successfully through the purchase process. That is why an audience analysis is such a critical element of a company’s marketing plan. You’ll notice that I’m referring to ‘audience,’ not just ‘customer,’ because with complex products or services, purchase decisions are often made in consultation with multiple parties, each having different agendas.
When we perform an audience analysis for our clients, we compose a matrix listing all the types of people that can be involved in or influence the sales process. We list what motivates each with regard to the problem that our product or service solves, where they look to obtain information on that solution, and what specific action we want that customer or influencer to take.
This information, coupled with a competitive analysis, contributes to the crafting of positioning and messaging that will serve as the underpinnings of a successful marketing campaign. “Have they thought this through?” is a question that I asked myself as I reviewed the presentations of the Bend venture candidates.