We see a lot of business plans that describe themselves as the [insert name of recently hot tech company] for [new vertical or market sub-segment]. Recently we have seen a lot of Pinterest for YY and Etsy for ZZ. Sometimes we get ‘my company is a cross between [massive company x] and [massive company y].
In the vast majority of cases these descriptions don’t convey what is special about the company and come across as lazy attempts to ride on the coat-tails of other people’s success. Sometimes they are just downright confusing.
For me, it is far better to take the time to properly think through what the company does and put that in a single sentence. A fictitious example: rather than say ‘Etsy for fashion’ say ‘an internet marketplace where independent fashion designers can market and sell their designs’. This is better because it immediately gives a good idea of what the company does (builds technology that helps fashion designers get to market) and which end market they are dependent on (sales of independent fashion). Potential investors will have a clear steer on how to size the market and evaluate the opportunity and any potential confusion about what Etsy does is avoided.
Additionally, if you can’t describe your company without referring to some other company you probably have positioning or marketing problems that need working through.
This post has been in the back of my mind since reading Never mention another product when describing your own. That post makes the following arguments that are also relevant:
- when you mention another company you shift focus away from your company to the other company
- you invite comparison with the other company (e.g. why can’t/won’t Pinterest or Etsy do this)
Pitching companies is a more complex than selling products, and once you have set out what you do at a high level saying that best practice at other businesses has inspired you in certain areas of your company can help investors to understand the detail of your operations and shows that you are plugged into what is going on in your market. Just make sure your audience understands what your company does first.