The pitches that Venture Capital (VC) firms are hearing over and over again revolve around the idea that beating the competition on their price point is the most important aspect of any new venture. Anybody can beat the competition with a cheaper mousetrap, but lasting brands win on value. Whether that’s providing a more comprehensive service, or enhancing the level of customer service available; the startups that get the most attention are the ones that have at least four different value propositions that set them apart from the rest of the market they’re entering into.
Building Real Value for Consumers
What is it that your customers crave? The best way to answer this question is to put yourself in the shoes of a customer. If you haven’t ever needed the product or service you’re getting ready to try and sell, then I doubt your venture will be successful. Sorry if that’s harsh, but you have to be able to truly relate to your skincare customer. Otherwise you’ll probably miss the mark and end up making the perfect product or service for someone outside of your target audience.
This could turn into an amazing win if you identify a new market or new angle on an existing service. However, the odds are a bit long on that coming through.
Location, Location, Location
Is the McDonald’s burger really the best tasting burger you’ve ever eaten? Is it the cheapest? For most, the answer to both of those questions is no. There are cheaper burgers in the frozen foods aisle at your grocery store. There are better burgers available at any neighborhood burger joint. BUT, neither of those options are as convenient and easily accessible as McDonalds.
Where are your customers shopping? Where will they make the impulse decision to buy your product or service? Place your product or service in front of them at the opportune time and you’ll be in a very strong position to grow your sales month over month.
Price is Still Important
It’s easy to find amazing deals on the internet. You have to assume that your customers are going to comparison shop. The internet just makes it too easy. So, you still need to be comparable to your competition. However, it’s okay if your prices are slightly higher as long as you can justify that price difference in a few sentences. Your website and marketing material must effectively communicate and highlight the unique value propositions of your product or service.
Value, Price, Marketing and Market Knowledge are Key to VC Pitch Success
Marketing, pricing and value are the keys to your future business. Don’t show up to a VC pitch with a simple “we’re cheaper” presentation. Go in-depth and sell the unique values of your product or service. Show that you understand the industry and how to effective reach your target audience.
“May the odds be ever in your favor!”