For pre-seed founders: when speaking to investors, it’s critical to showcase your deep understanding of the problem, not just your solution.
Deeply understanding the problem your company is solving will heavily influence your ability to execute on your idea and ensure a “win” with target customers. Prioritize this for the highest yield and results from investors!
How?
1️⃣ Exploratory Stage: How do I know if the problem I’m solving is the right one?
You may have already run social media ads and customer interviews to develop hypotheses about the potential problem you’re addressing.
While these tests are important for determining which customers you should speak to, take these tests one step further and properly investigate if this is the *right* problem for your company to solve.
Founders who are obsessed with their customers are poised to gather as much valuable data as possible. They relentlessly pursue individual conversations.
For example, ask prospective customers to walk through how they use a competitor’s product. This gives them additional insight into their customers’ existing behavior and learn why the problem they’re addressing exists in the first place.
Also, listen intently to customers through exploratory user interviews. Ask open-ended questions that prompt customers to freely share about their wants, needs, and frustrations, without a predetermined agenda or forced outcome.
2️⃣ Validation Stage: How do I know if my approach to the problem is the right one?
How did you determine which of your many hypotheses about the problem is worth building a product around? What methods did you use to test your preliminary assumptions about what customers need?
Founders that introduce prototyping and iteration (a bias to action) early on is a positive signal to investors. We have greater confidence in the founders to demonstrate a thorough understanding of the cycles of trial-and-error, as this indicates that these founders weren’t married to one particular idea/assumption while building.
If the different ideas you have in mind all miss the mark, it’s possible that the scope of the problem you’re addressing is either more narrow or broad than you anticipated. You now have more information needed to refine your problem and tailor your future solution.
🤔 Especially at the pre-seed stage, it’s important to detach yourself from the “If I build it, they will come” mentality during the pitch.
What’s more important to you: building a product for your customers or building customers for your product?
Founders who have thoroughly researched the ins-and-outs of the problem their customers are facing are innately inclined towards reaching product-market fit.
