When pitching a startup, entrepreneurs often focus on describing themselves as mashups of other successful startups in the hope that they’ll be able to gain credibility by associating their name with others’ success. You’ve heard the pitches before. “We’re Square meets Twitter.” Or maybe, ” We’re Pinterest meets Google Voice.”
I know those might sound ridiculous to some of you, but I know others are smacking their heads saying, ” Why didn’t I think of that?” Ok, maybe not, but you get my point. (If any of you make some money with either of those ideas, I wouldn’t mind a taste of the action, by the way.) The problem with these descriptions is that entrepreneurs often just stop there. They think that describing themselves as a mashup is enough to justify the funding of their company. It’s not. There are a lot of other factors at play. The one that I want to focus on is your company’s “X-Factor.” What makes your company unique? Are you the only one serving an important niche? Do you deliver significantly better service in a way that isn’t easy to replicate? Are you creating a new user behavior and monetizing it?
If you can’t tell me what your X-Factor is in the next minute, you either don’t have an X-Factor or you haven’t properly identified it. You better figure that out right now. If you don’t have anything that sets your startup apart, you need to come up with something of significance. If you have an X-Factor, but can’t properly articulate it yet, then you need to focus on that. Not only will you be able to better pitch after you figure it out, you will probably improve your product as a result of your improved focus on what’s really important.