The following post was submitted to NYC ENT and will be featured on their blog over the coming weeks. We felt compelled to share it here, with you.
Having the opportunity to compete as a finalist in this year's NYC ENT business plan competition was invaluable. As a start-up, one of the things you cannot get enough of is honest, critical feedback. In some cases, potential investors cannot share specifics because in doing so, they ultimately reveal their methodology and thought process--basically, their IP. To be even more frank, these people often lack the time, interest, and/or compassion to take the time and sit down with an organization they have no interest in doing business with.
As we discussed in a recent interview on ChubbyBrain, in our experience, a social enterprise may have additional difficulty getting this honest, critical feedback. As a social enterprise, with a mission that is inherently focused on the greater good:
"As I focus on the social sector, I think the fact that social entrepreneurs are doing something positive and focused on making a difference may make it difficult to get critical feedback. For example, I have not spoken to a single individual who said “I don’t get it”, or “Why would you try that?” I actually would have hoped for more criticism, but I think social entrepreneurs face a unique struggle in this sense. The idea is inherently positive. We are trying to do something that has a direct positive social impact. And so you are rarely going to hear negative feedback because of the ultimate goal."
As members of NYC ENT, we received detailed feedback on our business and how we represented our business from a high quality audience. But it is equally important for the recipient of this feedback to ensure it does not fall on deaf ears.
We received volumes of actionable feedback, but perhaps the most important was on how we were approaching the market. As a publisher of children's books, we were focused on developing a series of high quality products and expecting the concept and the product to drive interest and funding. We left NYC ENT with a different perspective, however, and with one word echoing around in our heads: "traction".
Throughout our week at NYC ENT and during all of our follow-up conversations and emails, the folks at Solidea and Connectors Group consistently emphasized the importance of demonstrating traction. The most appealing information for potential investors is a demonstrated audience. The implications of this advice cascaded through everything from our business plan to our short and long-term strategy.
Needless to say, we shifted our seed funding request, reduced it by 75%, and placed the emphasis on marketing and sales. Our goal? Demonstrating traction and using our successes (and failures) to formalize our valuation and finalize our "ask" for Series A. The approach has given us credibility with early stage investors, but also brought a new level of focus (and sense of urgency) to our own team.
Who knew losing would be so rewarding? (Regardless, we plan not to make a habit of it.)
Dream Village Team