Why do users care about your product or service?
This question is another way for investors to ask about your competitive advantage.
What investors want to hear.
This is the time to talk specifically about your users and the competitive advantage you have in the market.
- Start by clearly identify your target audience and its growth potential.
- Avoid talking about a generic group of people who will use your product.
- Help investors understand if you are targeting teenagers for a mobile game or a CFO for an payroll system.
Then, talk about the features your customers care about from a “bottoms up” perspective. Show the research that you did with actual users and how they helped you identify customer preferences.
Investors will only be interested in feedback you gathered from actual and potential customers. They expect you to be shaping your product with customer feedback. Investors aren’t interested in personal opinions. They invest in evidence about why customers will care and buy.
Let’s look at two approaches to answering this question.
Bad Answer: We offer better customer service or we’re better at social media than [Competitor]. We think features A, B, and C will resonate with customers and provide us with a competitive advantage.
Let’s start with the first sentence. The word “better” doesn’t tell you anything, it’s a subjective term. Next, “we think” speaks to your opinion instead of your customers’. It suggests that you’re not out in the market talking to actual and potential customers. So, all investors take-away from this conversation is that your obsession lies with your competitors rather than your customers.
Good Answer: We currently have 3,000 active adult learners, ranging from 18–80 years old, and they told us that they care most about X,Y, and Z. We then secured paid pilots with ABC university and KLM School District which have helped us shape our monitoring tools and our on-boarding activities. We found that the best way to reach our customers is through direct sales and social media — specifically, Facebook and Instagram.
Originally published at facingthenumbers.com on April 13, 2016.
