6.4K views Understanding common mistakes, practices, and misconceptions that can fail business ideas that would otherwise be great, and how to go about them.
You have this great idea and are participating in a bootcamp to win a spot in a funding cohort. You give your best pitch, and then you start getting these tough questions from the jury and the initial enthusiasm is fading away. You answer all the questions, but still haven't won a spot in this round.
The previous scenario is a standard part of many entrepreneurs' life and is an essential part of a successful entrepreneurial journey. However, if it is taking place again and again then maybe there is something missing.
Here are 10 reasons why you should rethink your idea and pitch before going in front of investors or a jury in a competition, with an example for each given reason.
1.Jumping in air
When coming up with an idea, it is important to consider the underlying elements that make up the needed infrastructure for it to function properly, and yet many entrepreneurs fail to realize how to address this.
This is often linked to entrepreneurs working on emerging markets that have under-developed infrastructure, and goes back to the identification of the business problem where instead of solving customers' problem in achieving something needed, the idea becomes an innovative solution for a non-existing problem (or at least not existing yet in the target market).
Example: Developing a streaming video service for a market that has a poor mobile/internet connectivity.
2.Nothing to show for it
A great idea is not a thought that comes to mind, nor is it a quick presentation of what how something could be. What makes an idea great is to show something for it. This could be something tangible in the form of a physical product or MVP, a virtual mockup of how the product should look like, or at least a feasibility study to show how -financially speaking- developing and selling the product will make revenue.
If the entrepreneur fails to bring to the table any of the a fore-mentioned showcases or a proof-of-concept, then it is just a thought, not a business concept.
Example: Pitching to present a mobile app to help pregnant women communicate and reach medical advice without showing any proof-of-concept on the idea.
3.No competitors
I can't say how many times I have seen this. An entrepreneur pitches and claims that no one has thought of this idea before. This reasoning is essentially faulty for two main reasons:
- The claim is incorrect, which means the entrepreneur did not search the market enough, or worse, they don't understand the market
- The claim is correct, which means that others haven't gone down this path because this solution is too expensive/inconvenient
In very rare cases the idea turns out to be a golden one that truly no one has thought of before, but even then there must be a clearly identified competition or alternative competition in the market. Be safe: don't depend on this.
Example: "We have a car-pooling app. No one had a similar idea before".
4.Solve it all
It is important to make an idea as clear, simple, and focused as possible. a common mistake is having an idea that solves multiple problems that are not all related. This will mean that the entrepreneur is not focused enough, or does not realize which market he/she is working in.
Example: An idea promises a mobile app that will enable instant messaging, forums and community engagement, self service with experts, and a directory of resources for medical professionals.
5.Too good to be true
If your idea and solution and its returns are too good to be true then probably it is. Often case, when entrepreneurs have bright ideas that are not validated for their financial, procedural, and applicable feasibility.
In addition, no idea starts big and keeps growing. Launching a startup entails developing the business and the initial idea along with it until it becomes a success. After it is successful, and after years of hard work then maybe it can become "too good to be true"- but not right off the bat.
Example: An idea promises to use customer's machines to mine crypto-currency so that in the first year a pure profit of $10M is earned with a negligible cost.
6.Working ideas
You have an idea that has already turned into a business and is generating revenue. Good.
You pitch the idea but don't get selected. Why?
Selecting the audience of your pitch and who to pitch to is as important as identifying your partners and customers. If you have a working idea and are competing in a boot camp with entry-level entrepreneurs then it makes sense that new innovative and virgin ideas be selected to win. You would have a better chance pitching it to investors. And vice-versa: Pitching a new idea that has a high risk of succeeding to VCs might also turn them off as they want further proof of concept and lower risk, so your best target would be angel investors or an accelerator.
Example: Pitching an e-commerce app that already has 5,000 monthly users in a startup bootcamp
7.Either this or that
Example: Some entrepreneurs participate in competitions with multiple ideas, and for whatever reason they get selected to pitch in front of a jury. They give their pitch mentioning that other idea (in case the first one wasn't good enough).
This tactic often gets negative impression that the entrepreneur is not focused enough and is just trying to win a competition or some cash to burn. This may sound obvious, but you would be surprised how often this happens in bootcamps.
8.Too technical
All ideas have an element relating to how they work or how they are developed. But is the idea -or most likely the pitch- too technical?
This often happens to budding entrepreneurs who are technically savvy in some area and they want to prove the technological superiority of their idea, undermining in the same time other important elements such as the market size, financial feasibility, potential risks and so on. Even more so, a purely technical idea can be presented to a jury that does not relate to the specific field or understand why it is so unique, resulting in them dropping it off the list.
You may want to check our pitch deck how-to guide here.
Example: Delivering the presentation in a technical fashion, with excessive usage of tech terminology and abbreviations.
9.Too abstract
Many budding entrepreneurs fear for their ideas and startup concepts being taken over by someone, and so they do not disclose their concepts to protect them.
It is always a good idea to protect the "trade secret", but if this protection cripples the progress and development of the idea then it is not a best practice to follow. A go-between could be disclosing the overall principle and what the idea solve and how it does that in a general sense, while leaving some detailed technical details out of the pitch.
It might make sense for growing startups pitching in front of investors, however, to disclose some of their secrets to better convince them after asking them to sign a non-disclosure agreement (NDA).
Example: "We are developing a mobile app that makes people at least 120% more productive during peak work hours."
-"How will you do that?"
-"That is our secret".
10.Sinking in the red ocean
Example: All too often, budding entrepreneurs will come up with concepts that are fairly similar to other products and services in the market, and when asked "how will you differentiate?" their reply would be like "We will have a higher quality product" or "We understand the market better".
Entering a red ocean without a clear advantage is a weak tactic especially for new ideas that have not been fully tested yet. Why is that? because in a red ocean it is difficult for existing and established businesses to compete, so it will be much more difficult for new entrants.
If, however, it is a red ocean, but the offered product presents a solution in a completely new fashion that is uncommon, this can be a potentially good concept creating a new opportunity and transforming a red ocean into a blue one.
Please note that this is not an exhaustive list, and the mentioned examples are not bad ideas in their own sake but they render poorly if presented in the given context of each.
