Lesson 11: Telling your Industry Story

Telling Your Industry Story

Your company story is going to be key to your marketing message. Before you can get to that message, you need to provide context. You need to tell the story of your industry. Your industry is where you live as an entrepreneur and that needs to be translated into a story that your audience can understand. In that story, your industry is the backdrop, full of obstacles and challenges to overcome. Your knowledge of your industry is directly proportional to how much you are likely to raise. Don’t just explain your industry; make it relatable.

You know your business and your industry because you’re passionate about it. You’ve done extensive research and have educated yourself on the finer details of your industry. Potential investors are unlikely to have that detailed knowledge or the passion to do the research, at least at first. That means that you must tell your industry story in a way that’s simple, concise, and digestible. This is basically your elevator pitch to get investors excited about the idea of investing in your industry. The question is how to best prepare that elevator pitch.

Your industry story needs to be told in a way that provides investors the information they need to evaluate your opportunity and get them comfortable with your idea. One of the basic rules is crafting an industry story that could be told to a child.

Every concept you use to describe your industry can be explained using everyday terms. If you do need to explain technical concepts, break those concepts into smaller ideas and avoid jargon. Don’t assume your investors understand these concepts as well as you do. Don’t make them feel bad that they don’t. Leave an opening for them to ask questions. Don’t be that teacher we’ve all had who started a lecture and immediately put everyone to sleep. You want them to engage with you not tune out.

Use a relatable metaphor. Selling cyber security software that protects enterprise networks? Maybe your customer is the quarterback, and your software is the offensive line. There’s always a way to speak the audience’s language and still get your message across.

The trick behind how to raise money is to be concise without being patronizing. Not all investors know how to start a company, but they appreciate it when you take the time to tell your industry’s story. They know that you know your industry in far greater detail. Translating that information into easy-to-understand bites shows that you want them to make an informed investment. Be prepared to field questions even if you do a great job explaining your industry. Some people might have questions about specific topics while others might need a broad overview. Be an active listener and engage with your audience. Most people don’t want to invest in something they don’t understand.

Be clear, thorough, concise, and non-patronizing. People appreciate it when you respect their time, so get right to what you want to say in a clear way that they can understand. Showing that you respect them is showing you care about them. And people will only care about you if you care about them first.

A good way to start communicating your industry story is to create an overview of your industry. That means focusing on the size of the market, its growth rate, and any key market segments that are relevant to your business. You will also want to discuss your customer base in detail. Investors want to know to whom you’re selling, how you define your value proposition, and what detailed knowledge you’ve obtained about your customers’ spending habits. If you are entering a new market, you will need to clearly explain how you intend to break in and what market share you think that you can seize. This will also require a detailed analysis of current competitors and your respective strengths.

Being able to clearly and concisely summarize your market helps investors feel more comfortable investing in your opportunity. A strong knowledge of your competitive landscape reflects your competence and commitment to succeed. That visible competence makes your investment pitch easier because investors will be more comfortable that you can grow their investment. This is especially true if you don’t have direct industry experience. Some of the greatest entrepreneurs started businesses in industries where they didn’t have extensive experience. Jeff Bezos founded Amazon, an e-commerce company, after working as a Wall Street trader. Demonstrated competence and determination can go a long way to show that you can quickly adapt to changing circumstances.

Once again, it’s helpful to have a framework when building your industry story. Here are the key points you need to address and how they help you connect with investors.

• Market Size: The total size of your industry, typically calculated as total annual revenue. This helps investors determine the long-term attractiveness of your industry.

• Market Segment: The specific segment of your market that your business targets. This might be B2B, B2C, or any other logical segment for your industry.

• Segment Growth Potential: How fast your segment will grow over the next 3-5 years. This helps investors determine whether your strategy and business model make sense.

• Key Competitors: Who will you compete with to serve this market segment? You need to clearly differentiate yourself from competitors and explain why customers will buy from you instead.

• Barriers To Entry: What makes it harder for another start-up to enter the market? Higher barriers to entry are better. Fewer new entrants mean larger market share for incumbents.

No industry story is complete without these key components. Depending on your industry, there might be specific components that also need to be included. For example, if you operate in the tech space you need to explain how Google or Facebook can’t just copy your idea and steal your market share. Investors will also look closely at the barriers to entry that you identify. This helps them understand the attractiveness of your industry and your company’s long-term prospects. You don’t need to cover everything under the sun, but you do need to be thorough when you craft your industry story.

1) Emmie Martin, “Jeff Bezos hasn’t always had the golden touch: Here’s what the Amazon founder was doing in his 20s,” August 2, 2017, CNBC, https://www.cnbc.com/2017/08/02/what-amazon-billionaire-jeff-bezos-was-doing-in-his-20s.html.