181. The Power of Specificity

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Allyson joins us to share her insights on providing specificity in the problem being solved. A founder has to be able to convey the severity of the problem and the specific upside for solving it. Without both, investors know customers just won't buy.

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Transcript

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Here's another great piece from Allyson and her writings over at the VC Minute Substack.

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And of course you can subscribe to get Allyson's biweekly newsletter at vcminute.substack.com.

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Investors place a high value on founders.

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Being able to communicate key elements of their business because so much of a startup success, including hiring early employees and selling comes down to the founder, being able to simply articulate the vision.

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Simplicity though.

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It was only part of the equation for a successful pitch.

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Another key component is specificity.

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Simplicity without specificity usually leads to broad statements that are in theory, easy to grasp, but in reality, don't say anything at all.

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The first place a lack of specificity manifest is in the slide and overview that describes the problem the startup is solving.

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Too often, the problem is framed at such a general high level it seems like the company is boiling the ocean.

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But we all know a startup has to focus.

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Right?

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If a founder is lucky, an investor can piece together the more specific problem being solved once the founder gets to the solution part of the pitch.

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But not always.

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Plus this violates the"don't make me think" rule, refer to episode 27 for more on this.

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If the problem is teed up, well, an investor should have a sense of the solution and the target customer based on the description of the problem.

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The framing of the problem is critical because it helps an investor conceptualize how deep the pain is for customers.

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Understanding the value proposition and why customers will ultimately buy the product is one of the most critical parts of the pitch.

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The more generic, the problem statement, the harder it is for investors to conceptualize the pain and the potential purchasers return on investment aka the ROI.

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The ROI is a second critical area requiring specificity rather than overgeneralization.

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What does the customer get in exchange for using the product?

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More time?

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More money?

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How has this quantified?

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In the early days, it can be hard to identify a specific amount of money or time being saved.

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But investors like to see that founders have a keen understanding of how their product is going to add tangible value to customers.

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When pitching for investment, the burden is on the founder to effectively communicate that the problem their company is solving is truly a hair-on-fire problem.

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Buyers have finite resources and will prioritize spending on only the most urgent onerous challenges.

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A founder has to be able to convey the severity of the problem and the specific upside for solving it.

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Without both, investors know customers just won't buy.

181. The Power of Specificity

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