Maybe That "Clay Pot" Story Has Some Truth to It?
Entrepreneur Office Hours - Issue #235
You’ve surely heard the story of the teacher who asked his students to make clay pots. It’s a common “inspirational” Internet meme. In case you haven’t, it goes something like this:
A teacher divided her class in half and told one half to make a a clay pot every day for a month, and she told the other half to make a single, perfect clay pot over the same time period. Ultimately, the half that made a pot every day put out better pots.
It’s a story about the value of practice, repetition, and quantity over quality. It teaches us we should to learn how to do great things through trial and error rather than being perfectionists and trying to think our way to greatness.
The reason I’m bringing up this story because it speaks to how I approach writing articles about entrepreneurship. You may have noticed, I produce lots of them. As a result, I’ll be the first to admit they’re not always A-level output. How could they be? After all, the muse doesn’t always hit right. But, just like the kids who made clay pots every day, sometimes, by writing lots of articles, I stumble onto some particularly valuable observations.
That’s what I feel like happened with an article I published last week. It’s about how the optimal structure and style of fundraising pitches is dramatically shifting as a result of social media and modern conceptions of good content/narrative. And the more I think about the core conceit of the article, the more I’d argue it’s one of the most important shifts in venture-style entrepreneurship of the past decade. (Judging by the way people are passing it around, I’m guessing others would agree.)
To be clear, I’m not patting myself on the back for my brilliance. Heck, the article itself isn’t particularly well-written. I’m focused on the observation. I haven’t noticed anyone else articulating this particular shift, but it’s super-important for fundraising entrepreneurs to understand. So, if you haven’t read the article, and if you’re interested in fundraising, go read it. The concept is going to modernize your fundraising pitch in valuable ways.
-Aaron
This week’s new articles…
The 3 Ways Entrepreneurs Are Always Making Customer Acquisition Harder Than it Needs to Be
Customer acquisition is already hard enough. Don’t make it even harder by doing the same foolish things as everyone else.
A (Possibly Irreverent) Lesson About Sales From the Most Successful Sales Book in History
Every entrepreneur needs to know how to sell. Might as well learn from the people who figured it out 2000 years ago.
Office Hours Q&A
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QUESTION:
Hi Professor Dinin,
My startup is about to enter our seed funding round and there’s a strategic question I’d love to get your thoughts on:
In your experience, during a seed funding pitch, what tends to resonate more with investors — emphasizing the potential size of the market we’re targeting, or the uniqueness and viability of our solution? Which aspect should we highlight to maximize our impact?
Thanks for any advice or insights you can provide!
Cheers,
Maccie
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Generally, investors want to see that you're targeting a large and growing market because it suggests a higher ceiling for growth and returns. Demonstrating a substantial market size can reassure investors that there's ample opportunity for your startup to scale, which is critical for the main thing they want, which is a huge ROI. (Remember, investors invest in a bunch of companies with the expectation that most are going to fail, but the ones that win are going to win REALLY big. In order for that to happen, all their investments have to be in substantially large markets.)
However, while a large market is appealing, if the investors you’re speaking with are halfway decent, they’re already going to understand your market… probably better than you. As a result, the thing you’re selling isn’t so much market size. It’s your ability to capture a market. This means detailing your product's differentiators and explaining why it's better than or different from existing solutions.
But more importantly than just talking about it, you want to do as much as you can to prove your product is able to successfully capture customers. The better you can demonstrate a legitimate ability to capture market share, the easier it’ll be to get investors interested.
Got startup questions of your own? Reply to this email with whatever you want to know, and I’ll do my best to answer!
