I usually do my videos on Sundays, but this one – by the ‘genius’ (?) behind Borat and Bruno – actually has an important message for aspiring entrepreneurs … and, it’s this:
When doing your business plans, it’s tempting to find some stats online that say something like:
… the market for widgets in the USA is $10,000,000,000 per year …
… which leads you [AJC: especially, if you are Ali G] to make ‘conservative’ claims like:
… and, if me capture just 1% of that market, with our New Improved Widgets, we’ll make at least $100,0000,000 per year, so you should invest with us …
You see, you haven’t answered the key question that the Venture Capitalist is sure to ask:
How will you capture 1% of the market?
What will your sales strategy be? How will your marketing/sales team capture 1% of the market? And, why won’t they capture 1.25% or 0.75% of the market (with such a variance being worth a paltry $25 million either way)?
Rather, what I (and, I assure you, the other VC’s out there) want to hear is how you will attack the market? What resources and expertise will you supply? Why will they be more successful than the competition?
And, if you have (say) 5 sales reps, making (say) 10 calls per day, what is reasonable to expect them to be able to close and how much revenue does that mean?
I dare say, if you take this bottom-up approach, you won’t come anywhere near to $100 million in sales in your first few years … but, do you even need to?
Make your business plans ‘real life’ … that’s my advice 🙂