Too bad for gravid.ca – whose troubles were featured in the Financial Post. Even with a hot product and an huge unmet market need, they’re not a great investment. By the time they get their supply chain problems sorted out, competitors will meet the need they’ve discovered and will cash in on all they’ve done to educate customers. They’ll lose their “first-to-market” edge. Worse, their business model is a “one-and-done” purchase – not an ongoing customer relationship that locks in revenue with repeat subscription sales.
It’s an all-too-familiar entrepreneurial success story. Two cousins seize upon a brilliant idea, raise seed capital from a small circle of true believers, get a few quick wins and hire loyal followers and more true believers. Yes, they create a strong family feeling and a cohesive work hard/play hard culture. They wear company T-shirts. They don’t let negativity and hard-edged questions dampen their full-speed-ahead confidence. But they collude, in not seeing what they don’t see. Which loses the edge they worked so hard to gain.
If you’re pitching to smart money – when you present your big bold idea to your corporate boardroom or to outside investors – don’t be surprised when critics ask how you’ll scale, so you don’t lose orders (like gravid.ca) or how you’ll turn a one-and-done purchase into a renewable revenue stream. Don’t be surprised when your investors want to see a diverse balanced team – not just cousins or Army buddies who have great history and chemistry together. And when they want to help you reshape your value proposition and rethink your big idea — and walk away if you sound like you simply want to be left alone to “do your thing” undeterred, or are too thin-skinned and insulted when they suggest an upgrade.
Maybe you know how to use tough criticism and how to reshape your team for growth, with diverse talent rather than a deeper tighter inner circle who all sees the world the same way. If so great. If not, an executive coach can help – starting with self-awareness about your own inventive thinking, when you’re asked questions you hadn’t anticipated. That’s part of what you’ll learn from pitch coaching – if we prep you for an investor pitch or for a board or senior management presentation. So you’re ready to take diverse perspectives on board.
Years ago, we pitched a hot idea to a family-owned B2C company with branches throughout Central Pennsylvania. The CEO, VP Sales and CIO immediately “got it” and saw how our hot idea could double their revenue and keep competitors from outside the valleys and mountains of Central PA from gaining a foothold. But Ralph, their VP HR – a crusty, sarcastic silver-haired, Marine-hardened cynic – raised barrier after barrier and insisted that we calculate the total cost of ownership for his over-enthusiastic colleagues and the total sweat equity that their branch managers would have to invest, to earn the ROI we projected. We could have sat back as the rest of our prospect’s leadership team apologized for Ralph’s negativity and politicized the issues he raised. But we knew we’d need his support – not for a go-ahead, perhaps, but for a successful pilot project.
Ralph was high on the innovation leadership strengths we call RIGOR and CANDOR, but low on ENTHUSIASM. He his condescending tone could suck the air out of any deliberation on innovation. But – we discovered as we probed Ralph’s concerns – he was right. Rather than battling for hegemony, in risk-averse defensive politics, we brought our own ENTHUSIASM to the party and came back with answers to Ralph’s challenges. In behind-closed-door discussions with the CEO and our other early-adopter champions, we cast Ralph as the hero to sharpen our execution and scale-up plan — rather than the naysayer. And saw him become a partner in our success, rather than an obstacle, as he saw we were serious about risk-mitigation and value-multiplication. We also discovered – Ralph had the ear of the CEO’s elder family members, some of whom had key seats on the BOD, and could make it difficult for the young CEO to move forward with novel ideas.
The cousins at gravid.ca could have used a few more Ralphs. Could you? Could you bring the ENTHUSIASM and OPENNESS to profit from their idea-sharpening — rather than digging in and trying to overcome or negate it? If you wonder whether your entrepreneurial leadership team (inside a corporation or in an independent small entrepreneurial venture) has the Courage to profit from smart money, we invite you to take this self-assessment. If so, GREAT! And, if not, we challenge you to shift your mindset and welcome your invitation to assist.
Merom Klein PhD and Louise Yochee Klein PsyD are partners at Courage Growth Partners, an innovation leadership firm that uses business psychology to PowerUP inventive thinking so you profit from bold breakthrough ideas. They equip investors to assess entrepreneurial leadership teams and high-potential corporate innovators – and equip entrepreneurs and high-potential innovation leaders to build Courage to profit from smart money. They invite you to take their online assessment and see if you have the Courage to multiply value-creation.