I ask every client this and it stumps most because it forces them to think about an uncomfortable truth. This question is asked from the position of an investor, we ask “why should I invest in you and not in the next founder with the same idea”.
The core of the questions touches on a few key points.
Firstly, it’s that ideas are a commodity. There are around 7.1 billion people on earth, which means that it’s very likely that someone has had the same idea as you. The mere fact you hold the idea in your head does not qualify you for venture funding, as it’s not worth much without a proper plan.
Secondly, there is the point of execution. Let’s say this is the first time the investor has heard the idea. Now, the founder is called into debate; what do you possess that the next person does not? Why should that investor not just wait for someone else to come up with it? An example could be 2 university graduates pitching for cash to build a new heart stent being compared to two 40-year industry veteran cardiac surgeons – same idea but separate execution paths, with a lot more niche experience with the latter.
Herein lies the core of a founder’s unfair advantages – they are what make you stand apart from the herd. Even though they are often something to work towards, tons of people do not have them yet.
I’ve outlined some below, just so you can compare your thoughts and see where you stand at the moment.
1. Domain Expertise
Do you hold profound experience in a specialist area or a Ph.D.? If your startup is also in this area then you can most definitely use this to your advantage
2. Strategic Partners
Have you secured an exclusive deal with a key partner? Or can you bring your own existing business as a customer in the startup?
3. Intellectual Property
Do you hold a trademark or patent on your process? If so, you can effectively own a market.
4. Track Record
Have you run and exited startups before? If so, you can claim you’ve got relevant managerial experience.
5. Insider Knowledge
Do you know something anyone else doesn’t know? Think insider trading, if you know something big is on the horizon then you can benefit from it (legally, I trust).
6. Location & 1st Mover Advantage
Are you dead sure you’re the first in your area? If that’s the case, you’ve got an open market to exploit.
This isn’t an exhaustive list and there are a lot more. All you need to do is think about why you’re the founder, what is that unique thing that you bring to the table, to give life to your idea.