A Myth, a Mindset and a Mantra for Entrepreneurs

Last week, I was privileged to be asked to speak to a group of aspiring entrepreneurs embarking on a 10-week course called StartUp Quest. Each team in the course is assigned an actual patented technology supplied by a Florida university and prepares a business plan to pitch to an investor panel.

The course is well-designed and very detailed, so my goal was simply to provide a way to keep everything they will learn in the proper perspective. I told them I would destroy a harmful myth, suggest the right mindset for success, and equip them with a mantra to discipline their approach.

The myth

The myth that entices and destroys most entrepreneurs is the one that says if you build a better mousetrap, the world will beat a path to your door.

Thousands of would-be millionaires have taken this literally: mousetraps are the single most-patented devices in history. The first important patent for mousetraps was granted to William Hooker in 1894, and then it was slightly improved by John Mast in 1903. Since then, the US Patent office has granted over 5,000 patents for new mousetraps, of which about 20 have made any money—and the original version still outsells all others combined by 2 to 1!

This may be because not one of those 5,000 designs made any improvement that customers would pay for, or because not one of the 5,000 inventors figured out a way to sell the value of their innovation. Either way, it is a failure of selling, not of technology. I reminded them what Peter Thiel said: “If you’ve invented something new but haven’t invented an effective way to sell it, you have a bad business—no matter how good the product.”[1]

If you want to be an effective entrepreneur, you must eradicate the myth that the product is the main thing. Don’t get me wrong: you still need a better mousetrap, but that’s only half the battle. Life is not like a Kevin Costner movie: if you build it, they won’t come—unless you sell the hell out of it.

The mindset

Destroying the myth is not enough; even if I convinced every one of the 90 people in the room that they had to put just as much thought into the selling process as into the technology, selling is not something you learn overnight. Those of us who make a living selling professionally know that it takes more than “natural talent” and that there is a wide range of skills needed to be consistently successful. That said, the quickest way to learn to sell is to first adopt an outside-in mindset.

As they strive to build their businesses, they must keep in mind that the most important asset they need to acquire and grow is not technology or people—it’s customers. Rather than starting from the technology and projecting forward, they have to start from the customer and work backward. They have to ask: Does the customer have a mouse problem?

That means they have to learn to think like their customers. Customers don’t care what their product does; they care what the product does for them. The best way to answer that question is to approach their strategy, their marketing and design from the point of view of what will make their customers’ lives better: solve a problem, take advantage of an opportunity, adapt to change, or contain a risk.

The mantra

An outside-in perspective is a great place to start from, because it’s essential to understanding the needs of the only people who count: those who will be willing to pay money to fill those needs. But understanding is useless until you can effectively communicate how you will do that.

As they carefully craft their business plans and put together the presentation for their investor pitch, it’s easy to get carried away with unnecessary detail that clouds their central message. They have only one shot where they have the full attention of the people that matter, so they’ll need ruthless discipline to make every word count.

The critical filter that strips away clutter is the essential mantra of persuasive communication:

SO WHAT?

By applying SO WHAT? to every slide, every visual, and every word that they put in their investor pitches, they answer the single most important question in the minds of every single listener. When the panel has to sit through nine pitches of varying quality, the one who best addresses what matters most to them will shine through—I’ve seen it in every one of the previous competitions.

When I had finished speaking, one of the participants asked a question that exposed the fundamental flaw in my whole talk. She asked, if everyone in the room was going to apply the principles I had talked about, how could her team be sure of winning? My simple answer to that question is the topic of my next post.

[1] Peter Thiel, Zero to One, p. 130.