I get to have lots of conversations with really great CEOs each and every day.
Though I’ll commonly ask a series of questions — all of which I truly care about (revenue, growth, margins, sales productivity metrics, market size, competition, etc.) — when it comes down to it, there are really three key questions I’m looking for great answers to.
Since they’re related and the answers tend to blend together, I usually ask them in order, only allowing the CEO to answer once I’ve asked all three.
1) What is the pain point you solve?
This is the most basic of basic questions and it’s a great opportunity for you to tell me about the problem your company/product is solving. This should help me grasp the complexity of the problem as well as get a better handle on why your company is important.
2) How do you solve that pain in a differentiated way?
This is where you should tell me all about your product relative to the competition and why you win. What’s different about your technology that allows you to solve your customers’ problems better than your competitors can? This isn’t the time to get overly technical describing the product, but rather to discuss specific features and functions that make the product a better solution than others out there.
3) Who do you solve it for?
Here, I’m looking for specific use cases – give me a great example of a customer who was struggling, how big of a problem it was, and how your solution fixed it. I’d also like to understand what types of customers you have and what other future prospects you may be able to help given similar problems. This will help me to better understand how widespread the problem is and get a better handle on the market opportunity for your business.
While I’ll certainly want to drill down on other pieces of the business to better understand the opportunity and assess fit, if I can’t get solid answers to these three questions going after any additional info is really a moot point.
There are lots of really great CEOs who get this and who do a great job building the answers into their elevator pitch. That’s awesome. There’s really nothing better than discovering entrepreneurs are prepared with great, concise answers to these three questions, because then we can spend more time on the phone actually getting to know one another and figuring out how OpenView can be the most helpful.
My suggestion is to think about these questions and work on developing your answers. Rather than providing on an overly technical or complex answer to a simple question, the next time someone asks you what your company does, break it down into these three ‘sub-questions’ and provide them with answers they can easily translate to somebody else (perhaps another member of the investment team, a customer, a partner, etc.). Doing so will allow for more streamlined and meaningful conversations around what matters most, while at the same time allowing you to get crystal clear on what you do (the latter part is more important for earlier-stage businesses).
Read more posts on OpenView Venture Partners »