We’ve just entered into the last month of the application window for YouStartIt#3 – the deadline is 28 January! Over the last few weeks we’ve received quite a few questions regarding the submitted projects. As always, there are a few generic issues quite a few applicants are struggling with. So let me try to give you some tips in this post.
Clarifying the value added brought by your project
Sometimes you try to point out several advantages about your project, hoping that the more of them are highlighted, the better it is. However what you need to do is to decide which one of them delivers the key value, your Unique Selling Proposition, and frame your business proposition around it.
Clarifying this is important to state how different you are from what’s already out there. And you need to be very specific regarding your competitors – even if they are not direct ones. Otherwise you risk someone evaluating your project to make an assumption like: “Aha, these guys are the same as so-and-so’s startup…” Use some visuals to demonstrate this – my favorite is a “weighted competitive analysis” (download it from here). You can later plot it as a radio chart (in Excel) and add to your pitch deck.
We need to know specifically what needs/pain points your target users have. Why they should go for your solution? Do they need it? Why?
What are the characteristics of the clients you’re targeting? Do they have common pain points? What makes them a better target than other client segments?
How big is your entire market? (try to quantify it) How much of it do you want to convert? How much of it do you need to target (and specifically how?) to secure the desired conversion rate?
Again, it would be nice to have something visual here – i.e. a classic conversion funnel as shown here. Use it in your deck and introduce the key findings directly in the F6S online application form.
Channels – which one is going to be the most effective? Make quantitative assumptions: how much is it going to cost you to convert one user (or one client with x number of users) using a given marketing channel?.
If you decide to handle marketing by yourself (which is true in most of the cases) and you plan to use a combination of inbound and outbound channels, you may very soon become a bottleneck to your own project. If you need too many person-hours to cover your outbound marketing within your current team, you’d need to start employing, which will make your outbound channel(s) very expensive. Though without them you may not deliver a required conversion. So… how do you intend to address this dilemma? Can you compensate the limitations of your outbound channels by activating the inbound ones (does the nature of your product allow for that)? If not, perhaps you need an additional co-founder to cover this gap?
Thinking about activating other revenue channels (outside of your project)?
Early stage startups usually struggle with securing cash flow. It’s tempting then to think along the lines of “I’m going to put aside a few hours to make some consulting”. Have you seen the previous paragraph about becoming the bottleneck of your own project? This way you’ll only increase the pace at which this happens. Make sure you calculate how many person-hours you need to do your marketing right. Assuming the complexity of a marketing mix required for most of the digital ventures, I don’t think you’d have any person-hours left for anything else…
Your business model
What’s your pricing strategy? How do you calculate your prices? How do you charge?
Here’s an interesting example to go through before you start analyzing your own case. Though a Business Model Canvas may seem a bit passe’ to seasoned startuppers, it is an excellent strategy tool to crystallise the essence of your business model on one chart: https://soundofmine.wordpress.com/2013/03/10/dropboxs-business-model-canvas/
As explained in the link you should therefore build your own BMC and attach it to your pitch deck while using the key info from there in your application.
Looking forward to see the results of your work.