Friday, August 2, 2013

5 Key Solution Attributes Investors Love to Fund

enchantment-guy-kawasakiEvery entrepreneur wishes that he could predict whether his idea could be the “next big thing,” before he spent his life savings and years of energy on it. Investors, on the other hand, typically don’t even look very hard at the product or service, but prefer to evaluate first the entrepreneur, and secondly the business plan.

I define these products and services as “solutions” (customers buy solutions to a problem), but Guy Kawasaki more generically calls them causes, meaning any new idea, company, or service. Yet we can all agree that the quality of the solution or cause is very important, and there are attributes that reduce the business risk and make it more likely a success in the marketplace.

Many people have tried to outline and refine these important attributes, including Kawasaki again in “Enchantment: The Art of Changing Hearts, Minds, and Actions.” He and I recommend that product ideas be assessed against the following five key qualities:

  1. Depth. A deep product or service has a robust set of features. It means you’ve anticipated what your customers will need as they move up the power curve, For example, Google is a one-stop source for your online needs, ranging from simple search to managing your e-mail, to analyzing your Web site. The selection is incredibly deep.

  2. Intelligence. An intelligent solution solves people’s problems in smart ways. Smart solutions are the ones that look simple in retrospect, don’t require a genius with an instruction manual to use them, and the benefits are easily quantified. In the computer world, the advent of the mouse for interface control and selection was such a product.

  3. Completeness. A complete solution provides a great experience that includes service, support, and a string of enhancements. For example, the Lexus experience is more than the steel, leather, glass, and rubber. After-sales support, comfort, accessories, and brand image are as much a part of owning a Lexus as the car itself.

  4. Empowering ability. An empowering solution enables you to do old things better and to do new things you couldn’t do at all. It increases your confidence and your ability to control your life. This feeling of empowerment is the essence of why young people love their smart phones and often consider their phone an extension of themselves.

  5. Elegance. An elegant solution is not opulent, but embodies creativity and polish, and enhances the user experience. An elegant solution works with people. An inelegant solution fights people. It looks right. It feels right. It works right. And it doesn’t make more work for you. This may be hard to define, but you know it when you see it.

In summary, the best product or service is a full-featured one (deep) that shows you understand customer needs (intelligent), comes with support (complete), makes customers better (empowering), and is easy to use (elegant). As you create your solutions, ask yourself if they are deep, intelligent, complete, empowering and elegant.

Of course, great startup solutions need great teams to implement them. Back to my comment at the beginning that investors evaluate the people before the idea, see my article a while back for details on “Investor Rules of Thumb For Investable Entrepreneurs.” The combination of these factors is why a new entrepreneur with his first idea usually has a tough road ahead.

As Guy says, “in a perfect world, you are so enchanting that your cause doesn’t matter, and your cause is so enchanting that you don’t matter.” In the real world, don’t count on either of these cases. You can best help yourself by doing the homework listening to customers and quantifying the pain points before you define a great solution. Then build a team, build a plan, build a great company, and have fun.

Marty Zwilling


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1 comment:

  1. Good article. This applies to the SBIR projects we work with here in Oklahoma.

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