“It Must Be Compelling”

Someone asked me recently what gets the attention of investors for their startup among the sea of so many companies pitching. I told them “It Must Be Compelling”. Signs of growth, traction, real revenues are always compelling, but something really cool about a company is also a critical element.

Powerful. Irresistible. Convincing. Irrefutable. These are definitions of compelling. Different, original, inspiring.

The Golden Gate bridge is compelling. You can’t see it too many times. Apple’s bank account is compelling.

And every once in a while a startup I see come along is compelling, but most startups are not. Founders need to realize when their idea/website/business model is boring, too similar, generic. Investors expect this, look for this, so they can eliminate your company quickly.

If you do have something compelling, you’re ahead of the game — you have a head start. You run as fast as you can to catch up to something bigger and to stay ahead of those right behind you. This is a good problem; you’re a hot item, you’re being pursued.

Most startups never get ahead of the game, even though they tell themselves they are.

If you have something that’s very good but generic, no barrier to entry, you’re doomed. Your success will encourage others to come along and knock you off, take away your nice revenue stream. They’ll attack you because it’s easy. They will smell the blood (and the money). Investors can see this scenario, too.

If by choice you don’t care about growth, and you’re not raising money, compelling doesn’t matter so much. If you realize that and set your goals accordingly, you can possibly have a nice lifestyle business. Many lifestyle companies exist and pay mortgages, and can even cruise along for decades. But that’s not the kind of startup this book is about. This book is about high growth tech companies.

If you actually, honestly have something compelling, don’t waste it. You must growth quickly to prevent others from knocking you off. Protect your turf. You’re the first mover. That won’t last long.

A great idea with no growth (in tech) is almost worthless. Why? Growth means the ability to build bigger and more complex barriers to entry — more advertising, products, support and security for your users/buyers, advanced services, channel control, etc. And protection from dying out. Growth is also the gasoline to create more growth.

Continuous growth is a sophisticated game; there are very few Facebooks out there that can grow for over a decade, and even Facebook is slowing down. Almost all companies throughout the history of modern man begin to decline eventually. It’s called the bell curve.

Some companies beat this inevitability by hacking their own core by merging with or buying other companies, creating new product lines, or splitting into parts. to “restart”. IBM did it, GM is doing it.

Trying to grow is hard, even for the best companies, so some try to just “keep it going” until something good happens, something new, something amazing. That’s usually doesn’t work. If you’re not growing you’re usually shrinking.

So find something compelling that is part of your business, something different, it’s there somewhere, and use it quickly to ensure growth. Be unique. Make it happen.

Excerpt From: “Hacking The Core.” iBooks:

https://itunes.apple.com/us/author/tom-nora/id1208687100?mt=11&lipi=urn%3Ali%3Apage%3Ad_flagship3_profile_view_base_treasury%3BylvUy0iJS4O6AQh2g4nSlQ%3D%3D