Measuring Market Size and Defining User Cases Is Crucial When Raising Money

In a recent article on "Venture Beat", venture capitalists (aka institutional investors with a good chunk of money) discuss the things they have gotten sick of over the years when reading through presentation materials from companies who are in need of funding.

Here are three things we can learn from their experience:

1- "Fancy" Sales And Marketing Strategies Are Overrated

Unless you have a very clear and cool new idea of how to introduce your product to the market, don't spend too much time on figuring out "fancy" sales and marketing strategies, but rather focus on the next two things we'll discuss in this article (market size and user cases).

Presenting sales and marketing strategies often includes presenting generic numbers, which show that similar companies or products have achieved past and current successes within your industry, and that applying a similar strategy will work for you.

This doesn't always help, since your product most likely hasn't been introduced to the market yet (or not on a large scale) and there could be a number of different obstacles that your competitors with similar strategies might have overcome already.

So instead of diving too deep into numbers that don't mean much to your investors, come up with some really clear and effective sales and marketing ideas that might not look "fancy" from the outside, but will actually get the job done and increase your chances of selling your product.

Also (and especially with venture capitalists) what will often happen is that they are the ones who either suggest certain strategies or make sure you hire experts who will. So don't loose too much time trying to sound like a sales and marketing expert.

Make sure you present your understanding for the importance of it, but if you're not a business major or don't have much experience, don't try to sound smart, but rather stay practical and goal oriented. Sometimes the simplest and "primitive" sounding strategies can be the ones that actually work, because they most likely make sense for your product or service.

2- Focus on user cases rather than too many technical details

This especially applies to companies that are creating software products or anything in tech. Often they get caught up in trying to figure out every possible solution up front rather than just building one, making mistakes, learning from it and move on to an improved version of the product.

Now, where that gets tricky is when you spent weeks, months, even years to figure out a solution and finally present all your findings with overwhelming technical detail... just to find out that there is no actual user case for your product.

Who is going to use your product and what problem does it solve? If you don't have at least one user case, then it will be difficult to sell the product - and creating a sales and marketing strategy for a product without users is even harder if not useless.