The University of Washington Dempsey Startup Competition started this Friday. The first step is a screening round during which judges will review your executive summary if you’re participating. Over the weekend, I’ve been analyzing six of them, and it’s my twelfth year judging and coaching at this event.
The main objective of the competition is for entrepreneurs to learn and get feedback about their idea. As I always tell people, I learn just as much as them by being on the other side of the fence.
Out of the hundreds of things you can do to effectively sell your business idea, here are three of the most basic rules that I consistently see entrepreneurs break. And that’s not just startup entrepreneurs. I see the same with large companies as well. They apply to most businesses involved in launching an innovative product or service of some sort.
Rule #1: Say it like it is.
What now? Exactly?
Believe it or not, most entrepreneurs can’t give a clear explanation of their product or service idea from the get-go.
It’s not rare to have to wait until page four of an executive summary, (about 1,500 words) to have a clear understanding of the product. That’s too much effort on the reader.
On the cover of their summary, I always see entrepreneurs trying to come up with a clever tagline instead of a simple definition of the product. Would you guess what product is hidden behind “Inhale Peace. Exhale Happiness”? Me neither. This is a real example, by the way.
This mistake can happen to anyone when you know too much about your own idea and you are so close to it that you can’t explain it in simple terms anymore.
Solution: explain your concept to someone who doesn’t know it, and ask this person to tell you what they would tell to other people to describe it.
Rule #2: Show, don’t just tell.
How is this going to work?
The second trap that I see: getting carried away with wordy explanations, full of buzzwords and jargon to explain how the idea is going to work and how it’s going to impact the people who use it.
Solution: How about a simple sketch or an image?
As Swiss-French architect Le Corbusier said, “I prefer drawing to talking. Drawing is faster, and leaves less room for lies.”
This is very much one of my guiding principles and I implore you to consider it as well more often.
A visual comparison between your process and what already exists is always powerful. I wrote last week about how Netflix did it in a 30-second commercial. OK, it’s an ad, but what about just two pictures next to each other.
See how my client L’Oreal brand IT Cosmetics does it with eye-catchy before and after photos that make them stand out in their industry. Simple and powerful.
Rule #3: Say why it matters now.
Question #5 in the judging criteria of the competition is “Does the summary create excitement?”.
It is rare to read an exciting executive summary.
First of all, just the name itself, “Executive Summary” is not an invitation for entrepreneurs to write something exciting. It’s announcing that what you’re about to read will be boring. Could you think of “Executive Summary” as “ A Love Letter To Investors”? Why not?
Secondly, I almost never really see the authentic WHY of the business idea in any of these executive summaries. The WHY is the core emotional reason that makes everyone excited about a new way of doing something.
Popularized by Simon Sinek around 2009, starting with WHY is such a simple and powerful idea that you would think it is by now as common as the Golden Rule. Well, this idea has still a long way to go before we see it well implemented more frequently.
Solution: your company’s WHY is your strategic narrative. Companies who focus on this gain a significant edge. If you don’t frame, share and communicate your strategic narrative correctly, you will limit your business’s growth potential, and this will cost you millions.
I’ve written about strategic narratives here, here, and here.
If you can’t say why it really matters that your business idea exists, why you are excited about the opportunity, and why people should be excited as well, everything else is pretty much useless.
Ask yourself these questions:
- What inspired me (as founder or owner/leader) to launch this idea?
- Why am I excited about the opportunity that I want to pursue?
- Why should we all be excited about this opportunity?
If you’re interested in seeing how one of the top entrepreneurship programs in the US evaluates a startup idea, I am copying the list of the judging criteria below (also posted on this web page):
Overall Impression of the Executive Summary
1 – Does the summary adequately describe the idea — does the idea make sense?
2 – Has the team adequately described the pain in the marketplace?
3 – Do you believe the team has presented a feasible solution?
4 – Is the summary well written and succinct?
5 – Does the summary create excitement?
6 -Does this management team have the skills required to execute the plan?
7 – Does this team have the experience to lead a new venture?
8 – Have they adequately described the market and economic opportunity?
9 – Have they clearly stated their value proposition? Is it a viable model?
10 – Has the team completely analyzed its competitive space?
11 – Does the summary clearly identify the company’s initial competitive advantage or differentiator?
12 – Does the team have an adequate strategy for defending their market position?
Go to market strategy
13 – Is it clear how the company will reach its initial customer?
14 – Does the summary clearly identify a sales strategy?
15 – Is the distribution plan clearly defined and reasonable?
16 – Has the team made progress toward any milestones (licenses, patents, etc…)
17 – Has the company signed customers and/or channel partners?
18 – Has the company booked any revenue?
19 – Are the financials consistent with the overall plan?
20 – Are the assumptions realistic?
21 – Are contingencies and exit strategies addressed?
22 – Does the plan describe the funding/resources required to execute on the plan?
Social Responsibility (New in 2020)
23 – Does the entry have the potential to make a significant positive impact on society?
24 – Will it improve the quality of life for people and our planet and help contribute to a better, safer and more prosperous world?
25 – Does the team discuss measurable efforts to minimize consumption, use, and byproduct waste, while bolstering profitability/cost containment?