This post originally appeared on Entrepreneur.com - #Growing Your Business
The most important first steps: Establish credibility, and prove that you can move fast.
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I lead partnerships at an investment firm. In usual times, that means my team and I are investing in and connecting a wide range of entrepreneurs. But today, my inbox is flooded with well-meaning entrepreneurs who have ideas for how to battle COVID-19. In the past week alone, I’ve received 150 cold emails like this.
There’s a lot of opportunity for small businesses here, and it comes from many sides. Investors are interested in funding potential COVID-19 solutions, especially in industries that could see growth in a post-COVID-19 world. Large corporations are extremely interested in partnering with innovative startups and technology to address the pandemic. There’s also an increased opportunity to work with government, with significant funds being deployed quickly.
But there’s a problem: Many of the entrepreneurs I hear from are not communicating their solution properly. If an entrepreneur is going to attract the right kind of partners today, they need more than just a good idea. They need to build trustworthiness quickly and prove that they can act fast.
First, consider the unique specifics of a COVID-19 solution. It’s unlike almost any other business solution that people think of. Here are the four problems on the minds of every investor, enterprise leader, and government regulators — which means these are the things that an entrepreneur needs to address first.
- The population of people affected is global, so the solution should be able to scale rapidly.
- Solutions are needed immediately, not next year. That means the entrepreneur must already have a plan to execute their idea.
- We do not know the timetable or how long this will last. Therefore, from an investment standpoint, there is more uncertainty and downside to an investment than usual.
- COVID-19 is the dominant message being pitched right now, so there is a lot of saturation. Only the most unique, viable ideas will gain attention.
If you think you pass those four concerns, then it’s time to pitch. Generally speaking, it’s always best to get a warm introduction — and that’s especially true now, when all evaluators are on high alert. There is significant risk in supporting the implementation of COVID-19 solutions; investors could easily lose money by investing in solutions that do not work, and governments could lose significant capital and the trust of their constituents. Scammers are also working overtime. I was just emailing the SVP of a major organization, and his email contained an auto-generated warning: “BEWARE: This sender mentioned COVID-19 and may be a potential scammer.”
For all these reasons, your pitch needs to do more than communicate your idea. It needs to sell you too. Here are the two most important ways to do that:
1. Establish your credibility fast.
In a fast-moving world, where many people are proposing solutions that may or may not work, you need to build trust. The best way to do that is with data, meaning you’ll need to develop and run initial tests on your idea before you pitch it out.
For example, a startup recently told me it developed a novel COVID-19 test: A user blows into a handheld device, just like a breathalyzer, and the virus will be detected in 2 to 3 minutes. That’s a huge claim, and I expressed my doubts. But when I met with the company’s CEO, he was able to show me data that backed up the claim. The device had already been built to detect other air particles, and they had re-purposed it and run tests that showed their device can detect the COVID-19 particle.
Here’s another great way to establish credibility: Show that other respected organizations already trust you.
A good example comes from a security company I’m familiar with. It makes robots that can patrol buildings and other spaces, and its CEO recently reached out to me with a COVID-19 use case: Their robots have a built-in capability to detect the temperature of people nearby, which means they can identify at-risk people and isolate them from the general public as quickly as possible. This could be a powerful solution for retailers, malls and airports — and that’s not just a hypothetical. The company already works with large, sophisticated customers like that. Because these venues already trust the security company, I quickly wanted to engage.
And what does the opposite of this look like? Recently, a company told me its software could detect COVID-19 — if it was built into Apple Watches. The company had no data to back this up, however, and an even bigger problem loomed: If this solution really worked, then Apple could almost certainly implement it faster and better by itself. Why would we bet on this smaller, slower company instead? I passed.
2. You need to show that you can move quickly.
Investors, governments and healthcare organizations are not, at this moment, interested in 10-year solutions. They want solutions that can be improving outcomes within the next 4 weeks. To prove that you can move fast, you should highlight your existing infrastructure.
Right now, speed can be more important than technology: People will support a lesser solution that can come to market now, versus a more sophisticated solution that’ll come out in the Fall. Upfront, you should volunteer whatever information will prove your ability to scale — including the number of employees you have, locations you have and anything else that can help you move fast.
Consider an email I recently received from an impressive orthopedic surgeon. He had an idea to use blockchain technology to make patient data more accessible, and therefore to speed up decision making. It’s a good idea, and he’s a trusted expert in patient care. But it was also just an idea; he didn’t already have a team in place building this blockchain technology. That made the idea less viable.
Now consider another email I recently received, from the CEO of a startup called LivNao. Its software predicts whether individuals are having mental health issues, so that they can receive care quickly. The company was able to rework its software, so that anyone within close proximity of someone with COVID-19 could be notified by cellphone. This was compelling to me for a few big reasons: I had already evaluated this company for investment before, so we already had a relationship; LivNao already has contracts signed with 12 large enterprises; and the CEO showed me charts demonstrating how his software could flatten the curve. I was convinced: This was a solution that could scale fast.
No matter whether an idea is fundable or not, I applaud all entrepreneurs for being so solutions-oriented. This global pandemic requires the world’s greatest minds, and that’s why I want startups to be as well-equipped as possible to make their case. If a good idea is backed up by credibility and the ability to move quickly, it’s a bet worth taking.