Sounds like you are doing a lot of great things! It also sounds like you're trying to raise $$$s form investors (as your primary hurdle / what you are trying to overcome).
I'm not sure what stage your company is in (pre-product; pre-revenue; pre-profit; pre-positive cash flow), but something to consider (if it fits with your current "stage")...
If you are able to get Letters of Intent from potential customers, your value will increase, your (perceived) risk will decrease and the probability of investment will also increase. If you can get 10 - 20 LOIs, then you may even be able to obtain debt instead of equity... lowering the amount of your company you have to give up. Taking *that* money and moving forward (i.e., making significant progress) will further increase your value as well as your "investability".
I can go into further detail, but I'm sure others have insights as well.
Categories: Strategy and Leadership
I am doing a bit serious search on how to improve my pitching
Pls help on this:
What are your barriers to entry?
I have been using these
A) patents b) r&d lead c) good execution mgmt team d) good service/support and e) prdt line depth
Still 3rd party investors insist no big deal! They are all copyable. Staying ahead & being flexible was also thrown. What would be a good way to defend this argument for a software firm, especially when it involves some web interface and all they think is of writing few Html lines of code? I am fed-up and seeking some strategies to defend.
Building on what Mark has said, I think the better barriers to entry are:
-- Installed base of existing satisfied customers
-- High customer satisfaction
-- Ability to stay ahead of the competition
The more that your business can demonstrate market success, the easier it is for investors to value your business based on its ability to generate cash.
- "Sticky" applications are good. For example, General Ledger is sticky -- it's a bear to change. Search is not sticky. All the Google users could start using some newer search engine tomorrow with little pain.
- Recurring revenue is good. A hundred customers contracted to pay you $1000 month each for the next five years is much better than one $6MM sale.
- "b) r&d lead c) good execution mgmt team d) good service/support and e) prdt line depth" probably won't impress, as you have learned. Your R&D lead could evaporate. A good team and good service can't be reduced to provable numbers and therefore does not impress the bean-counters who make these decisions.
As Bert says, success is good. "We've got a great product, all we need is some cash for marketing" makes investors run the other way. They want to look at sales for the past twelve months.
Elaborating on what Charles has said, if you can show high switching costs and a captive market, you've got Gold if you can show you can capture significant market share given sufficient financial resources and marketing effort.
Take Siebel as an example. They were not the first CRM/SFA product, but they positioned themselves as the mind-share leaders in this marketplace when it was still early. Because they had deep pockets and a strong management team, they were able to grow very quickly. Ripping our a CRM once in place is also not easy. Investors love this kind of business model.
The ones you list A to E, I agree are easy to duplicate. Its not only about being different, but staying different and retaining customers. The tools you use to defend that can be many: from top-of-mind awareness, to pricing, to promotion, to ongoing product innovation, to all of the above. It all depends on how you expect the competition to attack the marketplace and sell against you. What is going to allow you to have that competitive edge? Sometimes, hard to say until you've signed a few customer deals and forced you to go head-to-head against the competition.