I was watching an interview with “Kevin O’leary” – yeah he’s my favorite character in Shark Tank!– and though I dropped watching TV for many years, this is the only one I keep watching year after year. And I totally recommend it to every one thinking to start a business.
The amount of ideas and the critical questions asked is really worth the time. It brings different perspective to many of my ideas and plans. Seeing people questioned about their projects gives me more than entertainment, it really ignites more thoughts and careful planning to many of my crazy ventures.
According to the interview, scientists have put enough analysis on the businesses that got deals, trying to find what are the ingredients of those businesses. And they found that while there are various factors on striking a deal with sharks, but all of them have (3) ingredients in common. Here are the list, with my explanation and suggestions:
60-90 seconds rule
Most human beings have short attention span. Actually, studies showed that we are having an epidemic shortage in attention. And the cell phones and smart devices are bringing that span even lower and lower. With that being proofed by scientists, it totally makes sense to have well understood and clear business idea so that you can explain it in 90 seconds or less. This not only will affect your ability to attract investors, but also this affects your probability of success as it have direct relationship to customer acquisition. The easier customers understand your idea, the easier your sales will be. You will need less efforts and expenses on customer education. And believe me that that alone will burn lot of money and time; most start ups are not prepared to spend.
Here’s my recommended method to refine your business pitch:
- Set down and write your business idea. Explain the product/service and the business model
- Refine your text few times until you are satisfied
- Imagine yourself standing in front of a customer or investor and start recording your business idea
- Just refine your recording few more times. Repeat until you are satisfied.
- Check the length of the final recording. If it exceeds 90 seconds, then re-do the whole process.
- When you are done doing 90 seconds or less recording, go ahead and ask some friend or a family member to listen to your recording
- Then ask him/her about your business. If he/she gets it completely without issues, then you got a good pitch. You can use it for customers and investors.
- If he/she doesn’t get it or get it partially, then you have to repeat starting from step 1
- If it still didnt work, then you got to believe me that your business idea is so freaking complicated that most probably you will have hard time implementing it and making money. Unless you are prepared to try out and spend some time and cash, just think of another idea.
More than one partner rule
I was solo in most of my ventures. And I regret it. Seriously, you might be good by yourself, but having someone share same vision, with different skill-set is a fundamental pillar of success. Alone you can go fast for sometime, but with someone else you both can go further and for longer time. Unless you are looking to keep self-employed for the rest of your business-life, you will need someone to count on and trust. And there’s no employee who can have whole-heart in a business without having some part of it. I am totally against 50/50 partnership. It’s one of the main reasons for failure. There need someone invested in business more than the other party. My suggestion goes like 60/40 or 70/30. That way you both have enough skin in the game, and you are not operating alone, and above all one of you are more of a leader and invested in than the other.
Knowing your numbers rule
Believe me, that when you start most probably you would miss on many numbers. Only with experience and enough time spent on your financial plans and accounts, you would start to realize that noting is more important than numbers. Now the trick you should be aware of is: different business strategies need different numbers. There are basic numbers should be in all types of businesses, but many new businesses will require even more numbers. Example: revenue, profits, expenses, customer acquisition …etc. Just like any experienced entrepreneur, dont start a business without knowing all your numbers. And I do mean all. Numbers are the only thing that will give you the proper guidance on where to steer your business when market-storms hit.
There’s nothing like watching a self-made billionaires questioning a business. They look at things from totally different perspective. They have tremendous experience and years of refined process to reach to certain conclusions. I am against wasting time on TV. And I mean any TV show/program/series/movies…etc. The only exception is “shark tank”.