Monday, September 22, 2014

"Pitch Night" - Tips for Innovative Start-ups

“Pitch Night” is the opportunity for startups and innovators to show their business ideas to potential investors/advisors and get feedback on their presentations. I recently attended one in the health IT sector and thought that the critiques presented by these advisors were invaluable advice, not just for this sector, but for anyone interested in exploiting a new e-business idea. I thought I would share some of these key lessons with you today:

1. Who Will Pay for Your Solution? Identify your business opportunity and target market by explaining who is in pain and willing to pay money for your pain-relieving solution.
  1. Your pitch should explain:
    1. “This is our customer.”
    2. “Our customer base is losing money (estimated at $XX per “transaction”/ “event” for YY transactions per year) because of problems we solve. [Describe the problems.]
    3. “This is why our customer will gladly pay for our solution to overcome their current chronic problems.”
  2. Don’t develop “a tool in search of a problem.”
  3. Talk to 100 buyers before you finalize your solution’s design. Understand how they identify their pain and what your solution does and fails to do to resolve that pain.
  4. Lawyer’s caution: Be careful. If you explain the “problem that you solve,” you might be explaining the trade secret in your patent application. Think about your “inside voice” (trade secret disclosure under a non-disclsoure agreement) and your “outside, or pitch” voice.
2. Finding the Niche: Steer Away from Obvious Competition. While your solution might have a broad market, you risk losing to deep-pocket competitors who also see a broad market. So target on a niche market where you can acquire a dominating competitive advantage.
  1. For large enterprises, third party administrators (TPA’s) already manage large health and wellness programs. They might not see the value of your product.
  2. For smaller enterprises, the value of your technological solution might come from the combination of lower per-capital costs of managed services (normally provided by a TPA) where you combine managed administrative services (like a TPA) and the underlying technological solution in a single pricing plan.
  3. Identify your “similars”: competitors who have a similar solution, and refine your solution to be different.
  4. Explain why you are different and your solution cannot be accessible to your competitors: patents, trade secrets, licensing, governmental monopolies, regulations, first-mover advantage, etc.
3. Prove your Concept. Investors want to know your solution works and is accepted by at least one key “early adopter.” Develop a pilot program to gather performance metrics that demonstrate “proof of concept.”

4. Exploit your Big Data. If your innovative solution collects data (through sensors in the “Internet of Things,” a “tracking” or wearable “monitoring” devices), then develop a plan to own and commercially exploit the value of such Big Data across all your revenue streams.
  1. Lawyer’s caution: Before you exploit personally identifiable information (“PII” under data privacy laws) or personal health information (“PHI” under HIPAA), adopt legal procedures for obtaining consents to use it and for securing it from hackers.
  2. Design your data collection strategy based on whether it complies with privacy rights. It’s “privacy by design.”
5. Exploiting Mobility; Provide Teleservices. Design your solution for use in telemedicine. If you are selling sensors or other tracking devices and services, identify how your solution overcomes existing problems of distance, such as remote villages lacking world-class medical support, or on the ocean or in the air, or other scenarios where it is predictable that the user will lack access to adequate medical care without your solution.

6. Consider Selling to Channels, not just to Customers. A channel consists of an industry player that regularly supports your target customer’s critical needs. It might be a distributor. But it might also be a strategic buyer who has a gap in its product line and would want to integrate your solution into its solution. Find the gap. Such a strategic buyer might invest in return for some form of preferential distribution rights.

7. Sustainable User Intrigue, not Fatigue. In your sale to users, you cannot merely sell them the product and a six-pack of diagnostic data presentations from the user’s uploading of his/her data to your servers. Over time, the user will become tired because “nothing changes” after the initial use and the initial improvement. To be sustainable, you must design sustainable user demand after the initial “quick success.” Possible solutions:
  1. Telemedicine
  2. Real-time feedback loop for health improvement (or other benefits) when your solution collects the data from the user
  3. “Emergency” alerts, dashboards and “managed care” support
  4. Habit-forming disruptive self-service that simplifies life and gives it more meaning with less hassle.

No comments:

Post a Comment