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- ♞ Role of Market Friction in Pitching
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Role of Market Friction in Pitching
There is a very common problem in the fundraising world that I don’t see explained to founders often enough. Today, I want to address this head-on: the role of market friction in pitching.
99% of pitching is about presenting a solution to a problem investors care about solving. This, however, is an oversimplification of the process. The reality is that many companies don’t actually directly fit into the traditional supply/demand dynamic of an industry.
An easy example to understand here is AR/VR companies. Many VCs immediately reject them nowadays seeing that the demand for VR just hasn’t existed over the past decade. The reason, however, is friction. It’s difficult to move from computers/phones to VR. If someone was building something that makes that transition easier and provides the benefits of VR without the downsides, that would be a great idea, but they need to be able to pitch it in these terms.
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If investors are struggling to see the demand for your company, ask yourself why.
If the answer is that there is a reason for the lack of demand in your industry and you are solving that, then you need to use the word “friction” in your pitch and explain it precisely using these terms.
This small change helps negate investors' negative predispositions about your industry and its demand.
Does your product reduce friction? |
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Onwards and Upwards,
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