Guy Kawasaki balances up his Top Ten Lies Lists with the top ten lies entrepreneurs make in presentations to VC's
(Guy cant be a numbers man though...last top ten list had 9 items, this one has 11.. or is that just balancing again... :-))
1. Our projections are conservative.
2. (Big name research firm) says our market will be $50 billion in 2010.
3. (Big name company) is going to sign our purchase order next week.
4. Key employees are set to join us as soon as we get funded.
5. No one is doing what we're doing.
6. No one can do what we're doing.
7. Hurry because several other venture capital firms are interested.
8. Oracle is too big/dumb/slow to be a threat.
9. We have a proven management team.
10. Patents make our product defensible.
11. All we have to do is get 1% of the market.
Lie (or delusion) number 11 can be the undoing of a venture heading into the China market. The fallacy is to take the market size (which is huge) and then 'forecast' acheiving just 1% market share (making the underlying assumtion that hitting 1% is going to be acheivable), they then multiply by unit price and bingo you got a hockey stick. This weak minded type of analysis totally overlooks the time, expense and difficulty of execution. Its all about the execution. This might apply to a start up or can equally apply to ventures entering the China market with an established brand, product or service.
If end purchasers just dont want the product then you'll never get even 1% of the market.
Some entrepreneurs get 'blinded' by the market sizing and jump over the vital steps of moving from concept/protoype to actual sales (or traction as our American friends like to call it).
Guy Kawasaki's post is here
