“What problem are you solving for your customer?” According to Vusi Thembekwayo, well-known South African businessman, investor and public speaker, the basis of all successful businesses is the ability to answer this one question.
Make no assumptions
Thembekwayo, who is founder of MyGrowthFund, recently spoke at a funding masterclass about the big mistake that he sees entrepreneurs make right in the beginning of their business, and one that can negatively impact them later when they have to pitch for funding.
That mistake is failing to do their research, and instead making assumptions about what their customers want. “You find a problem: like the people need a Toyota Corolla and then you spend [time] making a Lamborghini. Then you go ‘they said they need…’ No, they need a Toyota Corolla.”
Any time an investor hears you saying ‘most’ and ‘all’ we know you are making it up
Thembekwayo told attendees at the masterclass that there’s a way investors can tell that you haven’t researched your customer. “Do you know when you are wrong? [It’s] when you use the words like ‘most’ and ‘all’.
“Any time an investor hears you saying ‘most’ and ‘all’ we know you are making it up. It’s like ‘some people’. I don’t know where did you get the numbers… did you compare analysis, is it online desktop (research), did you stand at a traffic light and ask people?
“I don’t know what’s the number (of all or most). Is it six out of ten, is it four out of ten, is it one out of five, what’s the number? There’s no such thing as ‘all or most.'”
He added: “If I were to build a business model on all or most, what are the series of assumptions I will put in? What is the number for all or most or some?”
