Three Ways Startups Win Investors With A Bad Idea

Getting the funding you need to improve your business is an extremely tedious task. When you talk to an investor, you put yourself in between success and failure. More than your need, your investors need to hear what they want to hear. To guide you, here’s three ways to disguise a bad startup idea. 

Solving a generalized problem

There are businesses that aim to solve a common human problem. On the other side of the spectrum, there are businesses that aim to solve multiple human problems all at once. Why? To sound like it’s much bigger than what it actually is.

The fact is, big businesses started by trying to solve narrow problems at first. When they have gained enough traction, they will reposition themselves around generalized problems. Just ask Uber. When it first started, it was just transportation within the push of a button. No food delivery, no carpooling. 

Solving an Industry’s Problem

One of the most popular (and compelling) rhetorics used when pitching a business is: “This is the problem with (insert industry)”.  It sounds more compelling to say that you have found “the” solution to an industry’s most popular problem. 

Though, there is one big problem with this. Industries do not buy products; people do. 

It has been a habit for people to personify inanimate objects. We tend to blame objects for not doing a great job of performing our tasks. Circle back to your complaint. Is it right that we blame these inanimate objects? We should focus on the bad design and execution of the people behind it. Industries don’t purchase the products; people do. To develop a great product, focus on people. 

Solving a new market’s problem with a failed product.

There are a lot of ventures that “pivot” (a fancy term for past failure) away from their old market. To their credit, they are now succeeding in another field. For investors, pivot signifies learning, resourcefulness, and perseverance. 

Pivots, however, are not all the same. There is a layer of complexity in all of these and not all attempts to move into a new market is a guaranteed success. Twitter was once a subscription-based podcasting service. Paypal was into cryptocurrency before it focused on mobile payments. 

There is some appeal in repurposing a product for a new market. But again, it’s not as simple as making another packaging and shipping it to customers. The greatest products stem from a need, not the other way around.

In summary, there are a lot of ways in which “bad” products survived the fangs of investors. How you sell and what you tell your investors is key. Bad startup ideas do not matter if entrepreneurs know what their investors would want to hear from them. Ultimately, there are no substitutes for ultra-narrow and highly specific problems being faced by people.

If you wish to perform these maneuvers on your existing venture, make sure that you aren’t digging your own grave. 

Wish to read more about entrepreneurship? Read the three tips on how to unleash your innovative ideas here