"Who is your competition?"
Whether it's an elevator pitch, investor pitch, or 1 Million Cups pitch, entrepreneurs are quick to address this common question when preparing their presentations.
The answer usually falls into one of two response types. The first answer (that makes me cringe a bit) is usually something along the lines of "There's no one doing what we're doing,"' or "We don't have any competition."
In reality, we know this is very rare.
It's often more likely that the entrepreneur hasn't done enough research or is trying to sweep the existence of similar companies under the rug.
The second response is a general overview the company's competitors and a re-assertion of their advantage over these competitors.
But there's a third response type that entrepreneurs consistently leave out of this answer: The history of their startup's industry or sector.
Understanding the history of your sector means knowing how certain companies became the top dogs; why others failed and were swept out of sight; and ultimately, why this is a prime time for your company to jump into the market.
"Entrepreneurs have this mentality that first to market always wins, and this just isn't true most of the time," says Bill Reichert, venture capitalist and Kauffman Founders School expert. "Did Apple invent the smartphone? Did Google invent search?"
The first company to market is not always the winner. Entrepreneurs must understand and be able to communicate the history of their industry, explaining why this is the right time for them to jump in and take over the world.
But this is more than just endlessly Googling your competition. It's understanding what makes you stand out among the others. "What is your insight that causes you to be successful, when others have failed?" Bill asks. "Investors, especially, will want to know this."
Understanding why now presents an opening for you and your business will bring a sense of maturity to your pitch and an amplification of your value proposition.
This was part of Bill’s presentation “The Art of Enchanting Investors”. Check out his full presentation!