Written By: Janine Kick
I’ve been hearing a lot about competition lately – from founders and investors. Founders tell me they are different and well, investors tell me they are not. It can put you in a tough position! Who is right here and what is each party missing? Let’s get into it.
In my experience, competition comes down to 3 things: your unique value proposition, your target market, and traction.
Unique value proposition: You need to clearly articulate what sets your business apart from others in your industry. Ask yourself, “what problem am I solving and how am I solving it differently or better than anyone else?” If you’ve made it this far, you’re likely already winning business – why is that? What sets you apart from your competitors? Until you can clearly and simply articulate this, investors will only see that you have competition, not that you are different from your competition. What does your moat look like?
Target market: Be specific about who your target market is and why they need your product or service. The more you can demonstrate a deep understanding of your target market, the more likely investors will be to take notice. What problems are they trying to solve and how does your company solve those problems in a unique or better way?
Traction: If you have any early customers, partnerships, or other traction, highlight these successes. Investors want to see that your business is gaining momentum and has the potential for growth. Use examples and data: It’s one thing to say that your company provides a unique value proposition, but it’s another thing entirely to back up that claim with data and evidence. Use real-world examples to demonstrate the impact that your company is already having on its customers.
I typically try to steer clear from ‘shiny objects’ and advise our founders to do the same. The irony is that investors are looking for shiny objects – the new, breakthrough, unique products doing something different that have people buying into it. Being able to identify what makes you and your company a shiny object is critical ahead of your raise.