Can you describe your startup in 1 sentence?
Why it matters more than you think, especially for early stage startups
My co-founder and I spent about 2 weeks putting together our first business plan. We prepared more than 100 slides, each densely packed with text, figures and charts. We got the deck bound. We even used shiny quality paper and hard covers. It was nice and heavy. We thought that it gave us credibility as first time entrepreneurs. After all, we barely had a product and no traction to speak of so we needed something else that looked “serious”.
During our first investor meeting we pulled out the deck. You could hear the thud when the deck hit the table. We felt proud as if we were two nerdy kids who had completely overdone their homework.
Half an hour later we barely got through 15 slides. The investor was bored out of her mind. She asked us to describe our startup in a single sentence. Our reply didn’t seem to convey what was so different about our idea. We tried giving a longer answer but the investor interrupted asking us to describe our growth strategy. Again, we couldn't give a coherent answer in a single sentence. The meeting was over soon. Out of politeness she took our deck — probably she thought it would be a good (and very heavy) doorstop.
We walked out frustrated. It was clear we would never prepare a slide deck that big again. A rookie mistake. However, it seemed unfair that we needed to describe our idea in a single sentence. How can a single sentence do justice to an idea like ours?! We thought the investor was obsessed with a trivial issue and we simply needed to talk to other, more reasonable, investors.
Eventually we managed to get funding. We hired a team and began building our product in earnest. However, we kept struggling to describe our startup in a single sentence. We did come up with many single sentence descriptions, however, none of them successfully delivered the punch. We would always resort to longer explanations. In fact, we couldn't summarise any part of our strategy in a single sentence. We thought people would believe in our product once they got the chance to use it. We hoped that somehow clarity would emerge from a sequence of A/B tests. But it didn’t.
Our startup lasted for another year before failing due to a wide range of typical reasons. Fundamentally, our inability to come up with a single sentence description of our startup was a symptom of a much later problem — the lack of a coherent vision of what we wanted to build.
If we asked everyone in the team to write a single-sentence description, we wouldn't have probably come up with the same answer. In all likelihood the same was true for our business model, growth hypothesis and most other aspect of our startup. Were we really pulling in the same direction? Could we prioritise the right activities as a team?
The failure of the startup indicates we didn’t.
As a founder you should be able to describe every important component of your startup in a single sentence. This is not to impress investors (although it will certainly help) but to make sure that your own thinking is crystal clear. You should also make sure that everyone in your team is able to do the same and that your view of the startup is coherent.
So here is an experiment you have do with your team:
Step 1
Get everyone in the same room, give them a sheet of paper and ask them to describe each of the following items in a single sentence.
- Tagline / 1-sentence description of what your startup is all about
- Your business model
- Your most important competitive advantage
- Value hypothesis (i.e. why users absolutely need your product or service?)
- Growth hypothesis (i.e. how will users find your product or service?)
- Your most important metric
Step 2
Let everyone in the team read out the answers. You will be surprised by the differences. You need to discuss them and repeat Step 1.
Step 3
Get everyone to talk to outsiders (e.g. users, advisors or perhaps other people in the startup community) about their single sentence descriptions. Can the outsiders understand exactly why your startup is positioned for success? Again, you will be surprised by the answers.
Step 4
Repeat Steps 1-3 until you can all agree that everyone has the same understanding of your startup and why it will succeed. Keep your answers and revisit them in a month or two.
Early stage startups evolve with every iteration. This doesn't mean that at any given point you and your team should not have clarity of your vision. It’s the only way for everyone to pull in the same direction.
