Tiffany Luck, a partner at NEA, makes some interesting comparisons between starting a new venture and doing hard core sports. She likes to say the entrepreneurial journey is like climbing Everest. It celebrates the trials and triumphs that entrepreneurs have along their journey to becoming successful small business owners. In a recent discussion, Luck emphasized the importance of addressing three critical questions—“The Why,” “The Who,” and “The What”—to ensure that founders present a compelling case to potential investors.
Luck’s central principle is that each founder needs to tell their own origin story, what’s wrong and why their solution is the answer. The initial “Why” goes in-depth on the founder’s history and inspiration. As for the second “Why,” this is where things get interesting. It brings into focus the purpose they work tirelessly and feverishly to embody.
The Importance of “The Why”
Luck believes that knowing “The Why” is the first and most important thing an entrepreneur needs to know. She explains, “The How unique engagement tactics, stakeholder consultation, communications strategy, etc. But this essence, however it manifests itself, tells the personal story that is the bedrock of any founder’s motivation.
Further, she contends that founders need to provide context on how they got to this point since that background is key to forming trustworthiness. It’s important for investors to dig deep and truly understand what motivates each founder. They have to be aware of the founder’s place in the entrepreneurial journey.
Luck explains further with his second rule, “Why is now the lucky time to do it. Founders should use this question to ground their solutions in the reality of today’s market dynamics, highlighting their sensitivity to timing and opportunity.
Assembling the Right Team: “The Who”
In this episode, Luck encourages founders to lead with a discussion about their team, and why each member’s skills will complement one another. She notes, “Who have you recruited to do this crazy thing with,” emphasizing the importance of teamwork in navigating the startup terrain.
Additionally, it’s extremely important for founders to show that their team has an equal crazy-banana-ice-cream level obsession with the product’s mission. That shared passion—that love of place—might be the most important motivator to help push through challenges and keep everyone focused on goals.
Luck stresses, “These are not intended to be prescriptive or exhaustive. He implores his readers to never underestimate the need for clarity when it comes to how a team should operate. Investors need to know that the selected team is more than just able, but committed on a profound level to bringing their vision to life.
Addressing the Problem: “The What” and “The How”
The third question revolves around “The What.” In fact, founders are required to succinctly and compellingly articulate the problem their venture will address. According to Luck, this involves explaining how the problem affects people and identifying existing solutions while pinpointing areas ripe for disruption.
The Why comes next, and it’s your opportunity to show why this issue is important to address and how it affects people. From there, she lays out existing solutions and points out their room for disruption. To make their case even stronger, founders can be ready to present a product demo. Luck claims, “If you believe a picture is worth 100 words, I believe a demo is worth 1,000 hours. This strategy can be a powerful way to show how their solution is unique in a crowded market.
Lastly, Luck poses essential questions: “How are you going to get there? How are you getting there today? How will you get there over time?” These questions help lead founders to articulate their vision in a way that builds investor confidence in their plan.
