The following post can also be found at futurefounders.com.
So you’ve got an idea.
It’s innovative, it’s revolutionary, and it has every ounce of your heart and soul backing it up. The problem, however, is that every ounce of your heart and soul doesn’t cover startup expenses. You, my friend, need money.
Feeling the emptiness of your pocket, you apply for some startup competitions, reach out to a few
friends of friends and prepare to pitch your idea to those who can actually help you make it a reality. You’ve
rehearsed, you’ve rehearsed and you’ve rehearsed some more to make absolutely sure that you can properly convey to your audience why this idea is worth the investment.
But your rehearsed speech is only half of your actual pitch. The other, equally dangerous half, comes afterwards–the questioning. Whether you hear “What makes you qualified?” or “How do you plan to penetrate this market when no one else can?” you had better be able to answer quickly, confidently, and accurately–otherwise, you can kiss that prize/investment money goodbye.
In an effort to support any entrepreneur out there prepping for their big opportunity, we have compiled the top five questions asked by judges at our own tremendously successful entrepreneurial competition: Future Founders‘ 2nd Annual U.Pitch Competition & Showcase. This year’s contest (an initiative of Future Founders Startup) featured Daymond John, Founder of FUBU, a Presidential Ambassador for Global Entrepreneurship and Co-star of ABC’s Shark Tank, and other seasoned business executives and entrepreneurs seeking to discover the next big entrepreneurial idea. Here’s what they asked.
Why has no one else done this?
This question generally arises with a product that seems too simple or has been presented to have virtually no barriers to entry. The response can go one of two ways. First, to respond “I’m the first one to think of it” makes it look as if (1) you haven’t done adequate research on the market or (2) there isn’t much of a need for your product. Neither of these leaves a good impression.
But second, to respond “Others have tried it” forces you to prove that (1) you know something essential to this problem’s solution that the market doesn’t (possible, but unlikely) or (2) you are better equipped to take your solution to market than the competition because the inevitable follow up question to this response is, “Then how on earth do you plan to succeed when others haven’t?”
What problem are you trying to solve?
To be asked this question generally isn’t a good sign, because it means that you did not adequately address the need for your product or service in your initial pitch. At this point, the survival of your pitch comes down to being able to succinctly (in one clear, short sentence) explain the problem behind your solution. If the judges/audience can’t understand it, chances are your target customers can’t either.
What traction have you experienced?
Similarly, this question is one that you would have ideally referenced in your pitch. However, to be asked for clarification or elaboration is not uncommon, and you should be poised to fire off several clear, understandable figures about where you stand as an operation. First year sales is always a good place to begin. If you have yet to launch your product, you’ll have to work a little harder to demonstrate that you do have forward momentum–it might just have to be in the form of product development or hard, research-based projections. Regardless, the survival of your pitch depends on whether the judges/investors can clearly see and believe that it’s going somewhere.
Who are your competitors?
This one is likely more out of genuine curiosity than a direct challenge to the idea being presented, and yet it is just as essential to respond directly and immediately. It doesn’t matter how great your product is–if there’s someone out there who already has a solution to your problem, you’ll need a strong and compelling strategy to undermine their market presence. To dance around this question or somehow give off the impression that you aren’t sure who your competitors are is an instant rejection from an investor.
What regulations are involved?
Whether your baby of an idea is a mechanical invention, a food service or anything else that involves potential health and safety answers, this question is a given. “Have you performed clinical trials?” or “What requirements does the FDA have about these kinds of things?” are questions that the investors may not know much about and need to be educated, or they could know a great deal and simply want to test your research. In either case, if your product or service falls into a category requiring approval, certification or other classification, you need to understand every in and out of that process if you want to convince someone that you can make your idea succeed.
Obviously, your judges or investors will likely ask you more (and different) questions. In fact, ideally your pitch would cover these questions so well that they don’t even need to be asked. But in the event that you do find yourself defending your idea with these questions, remember: speak accurately, briefly, and confidently. You’ll do great.
U.Pitch, an initiative of Future Founders Startup, is the ultimate elevator pitch competition that recently brought together some of the best student ideas and businesses across the nation, all while giving away a prize pool of $10,000! Daymond John, Founder of FUBU, a Presidential Ambassador for Global Entrepreneurship and Co-star of ABC’s Shark Tank joined us as a judge, so students really got the experience of pitching to sharks! Applications involved submitting a 90 second video pitch of a for-profit business or idea. Learn more about U.Pitch and Future Founders here.