I recently sat in a presentation which a portfolio company CEO gave for a potential strategic partner. He first started out with a two minute explanation of the business and then insisted on diving into the demo. I wasn’t sure if that prospective partner really got it and before we knew it, the CEO said it was much easier to just dive into the demo to explain. I kind of cringed but did not want to stop him from giving the demo as I was hoping he would get to the big picture. While everyone was impressed with the demo, it lasted too long and got us focused in the weeds and not the forest. From that meeting, I was left with a deep understanding of the features and functionality but what was clearly lacking was the vision for the business. If you can’t explain what you do, its context, and the opportunity in a few sentences and have to give a demo for someone to get it, I would suggest going back to the drawing board and thinking long and hard about how you make sense of what you do verbally. It would have been great if the CEO started the presentation with a clear and compelling message of the company (not the product) on where the world would be 5 years from now and how his product or service today would grow to meet this vision of the future.
As one of our marketing consultants, Richard Currier, has always told our portfolio companies, "you market the vision, and sell the product." If you get too locked into talking about a product, then your partner or customer gets stuck into thinking about who else does this and why are you different. Getting into a feature/fucntion battle in the first meeting is not a great way to start. Sure enough, our prospective partner started naming several companies asking us how we differed from them. If you start with a vision first and clearly talk about your view of the market in the future and how your product evolves from where it is today to a roadmap of the future, then it is easier to differentiate your company and bring the discussion to a higher level.
Trust me, the word vision became almost a dirty word during the market crash as no investor wanted to have another entrepreneur or CEO long on vision and short on execution. The problem is that the very skills that got us to the market hype (lots of vision, big thinking) were not the skills that enabled many of us to survive the downturn (tactical focus on generating revenue, conservative business plan, and execution). If I look at the world on a spectrum from focus on all revenue and profits on the one hand and all technology and vision on the other hand, I would like a mix tilted much towards the technology spectrum in the early stages of a company’s growth. Pre-2000, I would argue that the mix was all tech and vision with no focus on building a business. Post-2000, many companies were much more on the business spectrum and less on the tech side. Today, I am asking that entrepreneurs bring back that vision thing and show us the big picture because showing me a point product doesn’t cut it. In addition, in today’s world it is much harder to get public and many of the acquisitions today are not based on how many customers you have or revenue but based on your technology today and product vision in the future. I have a number of companies being looked at right now and having a 2 year advantage on a product can mean alot for a strategic partner or acquirer. I am by no means advocating that you build a company to flip, but I am just stressing that vision is not a dirty word, that you need one, and that as long as you carefully balance that with building a real business you will be in great shape.