Vision versus focus in your pitch
Many founders struggle to effectively convey the very large vision they have for the company, while also ensuring that they communicate how focused they are NOW on a smaller target market for scaling. One method that can be effective is to zoom in and out during your pitch.
Let’s use a real historical example which I’ll take artistic license with to make the point. Imagine you’re Jeff Bezos pitching Amazon.com to Seed investors (his parents were his Angel investors). You’ve already launched your eCommerce website (see pic below) and you have a nice inventory of books that you’ve begun to sell.
Your pitch might start with the vision:
“Amazon.com will be the number one place to buy almost anything you need that can be delivered by mail. Whether it’s books, video games or even clothes or groceries Amazon.com will let you shop from the comfort of your own home”
but then you zoom in and talk about what you’re doing today to maintain focus and scale smartly:
“We started with books because they have a long shelf life so we can store a large inventory, they are fairly small so easy to package and mail and they have a good margin. Additionally, heavy readers buy up to several books per month so our superusers will be very profitable”
Then you can zoom to the next stage in your expansion plan:
“in the next 12 months as we continue to scale book sales and cross 100,000 users we will launch new ancillary products including office supplies, software and music.1 This will enable us to 10x our revenue within the year.”
Investors want to know that you have huge ambitions to be a large company someday, but they don’t want you to pretend to be a large company today. The best investors know that focus is the key to scaling a business. Here’s another illustration of that:
In this example we start with a simple skateboard for a specific type of user (let’s say suburban kids) and then we launch new more complex products as we grow. The vision may be to be “the transport company for everybody”, but in the early days we’re a skateboard company building the best skateboards for a focused target market.
As it happens, Honda has a story like this, except they started with “auxiliary engines for bicycles”2. I recommend reading their growth story.
Tesla did this another way: Starting out with a niche expensive sportscar for a small market and then scaling into larger and larger mainstream products/markets.
Uber and Facebook have a version of the focused growth story too.
Focus or fail.