Editor’s note: “The Angel Connection” is a regular feature in WRAL Local Tech Wire. LTW asked consultant Bill Warner to share advice for entrepreneurs seeking venture capital investment. He is chairman of the Triangle Accredited Capital Forum, an angel investor network with over 100 members throughout the Southeast. The Angel Connection is published weekly.
RESEARCH TRIANGLE PARK — You don’t have to talk to a potential angel or venture capital investor or company board member for more than five minutes before the word "focus" comes up.
It is death to any business plan that wanders through a dozen possible initiatives for the business.
You will be dismissed if you even hint at hiring people or purchasing equipment that is not relevant to your business.
If you are not clear about how your product or service is marketed and sold, the prospect of getting the support you need is zero.
The message is: "be unwaveringly focused."
What does it mean to be focused? The dictionary definition is: bringing into focus or alignment; to converge or cause to converge; of ideas or emotions.
It’s being adjusted, centered, centralized, concentrated, or convergent. In business it means:
• Having a clearly defined market that you will aggressively pursue
• Being able to have influence within the market environment
• Understanding exactly who your buyers are and why they buy
• Offering a clearly differentiated product or service
• Knowing your competition and how you will beat them
• Creating well-targeted marketing programs
• Forming effective sales channels
• Establishing well-thought-out revenue and financials models
• Attracting a strong management team
• Showing successful company progress
Conversely, the dictionary says that being unfocused is: not concentrated at one point or upon one objective. Likewise, the business meaning is:
• Having too many market segments to chase
• Not understanding your buyers and their issues
• Developing a "me too" product
• Solving a "nice to have" need
• Defining irrelevant marketing programs
• Having the wrong approach to sales
• Not fleshing out an affordable financial model
• Continuing with weak and inexperienced management
• Not meeting milestones
Basically, what this means for your business is that you need to have everyone in the company on the same sheet of music with respect to your business strategy and plan. All communication to investors, alliance partners, vendors, contractors, employees and the media have to be clear, concise and consistent.
The management will be expected to keep the company on track and not to diverge into other business initiatives that are not essential to meeting their near-term milestones. Being unfocused will result in consuming valuable resources that will not be spent on the most important activities necessary to meet the company’s objectives. Investors will believe that this will lead to ultimate failure if unfocused activities continue for too long.
Focus! Focus! Focus!
There is nothing more important to your success. Companies that stay on a focused track will have the greatest chance of success.
About the author: Bill Warner is the managing partner of Paladin and Associates, a business consulting firm in the Research Triangle Park area of central North Carolina, and is the chairman of the Triangle Accredited Capital Forum, an angel-investor network with over 100 members throughout the Southeast.