KISS Canvas: 4. Competitive Advantages

[This is a part of a series on the KISS Canvas]

This section of the canvas helps you find and own your niche! Here is a video explaining the how to use this part of the canvas and tips for understanding and strengthening your competitive advantage.

Here is each sub-lesson:

  1. Introduction
  2. Know your competitors
  3. Don’t underestimate the status quo
  4. Competitors are free R&D!
  5. Advantages stem from Benefits
  6. Create a Competitive Landscape Map
    1. TOOL: Get a blank Competitive Landscape Map
  7. Seek barriers to entry
  8. Summary

Check out more KISS Canvas Content.


The Case For Being An Angel Investor

Marianne Hudson, executive director of the Angel Capital Association (the trade association for angel investors in the US) wrote an article making the case for wealthy to consider becoming angel investors. Her full article (with her permission) appears below:

The other day I was listening to an entrepreneur pitch his company to a group of potential investors and it hit me how great it is to be an angel investor. I’m admittedly biased, but I think being an angel investor is one of the best things high net worth investors can do.  Supporting great entrepreneurs is a real kick – and it can bring significant financial returns.

The rewards are many, assuming you can check yes to these basic caveats: Legally, you must have the wealth or income to be an accredited investor. Personally, you must be willing to lose your investment money, should have a portfolio strategy, and use good investment practices.  This high risk, high reward kind of investing isn’t for everyone, but for every article I read encouraging people not to get into angel investing, I see more reasons to do it.

First, consider the potential financial returns.  A study found that the overall return on 1,100 plus angel exits was 2.6 times the money in 3.5 years, or about 27% gross Internal Rate of Return.  Not bad compared to other types of equity investments. Even so, it’s important to look into the details.  More than 52% of those exits lost some or all of the investment and 7% provided nearly all of the returns.  This means that angels need to start with a strategy to make multiple investments to minimize risk and increase the chance of good returns. Angels should also educate themselves on good angel investing processes via eventsreading and networking with experienced angels.

Angel investing can also help diversify your overall investment portfolio.  Ryan Feit, CEO of SeedInvest, put it this way: “Allocating 5% of your overall portfolio into angel investments can increase returns while lowering volatility.  This is because early-stage, private companies generally have a low correlation with traditional asset classes, such as stocks and bonds.  A recent SharesPost whitepaper concluded that allocating 5% to private growth companies could increase the returns of a traditional portfolio by 12%.”

While returns are the measuring stick for any kind of investment, investing in early-stage companies provides a whole set of additional, hard to find, personal rewards:

  • Meet interesting people with fascinating ideas – Top entrepreneurs are the best communicators I’ve ever seen, getting across their technology or medical innovations in ways nearly anyone can understand while also explaining their business models very well. You can feel their tremendous passion and see how fast the wheels in their brains are going.  Through angel investing I have also had the pleasure of meeting other investors. Often we have highly different backgrounds, yet we share a common core that builds great bonds, leading to long-lasting, true friendships. And let’s not forget the great food and beverages we enjoy as we analyze and debate our next investment.
  • Support what you care about – Since angels decide which companies they want to invest in, they can put their own money in the kinds of businesses that are the most important to them. This might be industry sectors you have experience in, or entrepreneurs who are alumni of your university, or supporting a demographic you care about such as women entrepreneurs.
  • Know you’re doing good – As Feit says, “Unlike any other type of investment, startup investing provides the opportunity to invest in innovation and to feel real ownership in the companies that you invest in. Every year, angel investments create thousands of revolutionary and life-changing technologies.” I’ve met so many angels who are also proud that the companies they invest in create new jobs.
  • “Entrepreneurship without the responsibility” – Super Angel David S. Rose coined this phrase in his 2014 book“Angel Investing: The Gust Guide to Making Money and Having Fun Investing in Startups.” Entrepreneurship is exciting.  As I wrote a few years ago, one of my favorite angels has said how much he loved starting his very successful company and selling it for a great return, but he didn’t really enjoy the part in the middle—running and growing the company.  As angel investors, we know that the responsibility for a company’s success lies with the CEO and we can enjoy being involved with the company without having the responsibility of leading “in the middle” to get to a great exit.
  • Learn new skills – Angel investing offers something new for everyone. Learning new things like deal terms, the most effective way to mentor entrepreneurs, or how to be a good board director can be lots of fun. Sometimes gaining these skills can also lead investors on new life paths. For instance, one reason angel investing is attractive to women is because it’s a fast track to learning about being on boards of directors, getting board experience, and then leveraging this to become better candidates to serve on corporate boards.
  • Apply current skills in new ways – Angel Barbara Clarke is an example of how an investor’s background can contribute to the angel process. As she told me recently, “Everyone on a due diligence team has their own unique expertise and experience. For example, angels with journalist backgrounds are good at research and interviewing. My background is management consulting, and I’ve found that I am comfortable with competitor and market analysis, even in industries and fields I am unfamiliar with.”

When you add the financial benefits with the personal perks, how can’t you make a case for angel investing? My advice? Continue to learn as much as you can about angel investing before diving in, but know up front that it is one of the best things you can ever do.

KISS Canvas: 3. Features & Benefits

[This is a part of a series on the KISS Canvas]

On to most entrepreneurs’ favorite part of the venture, the product! But to do so, we must first understand the difference between features & benefits. Benefits are what the customer wants. Features are how we give them what they want. Confuse these and you’ll keep building the wrong product or providing it to the wrong people.

Here is a video explaining the Features & Benefits columns of the KISS Canvas.

Here is each sub-lesson:

  1. Introduction
  2. Customers buy Benefits, not features
  3. Benefits are the reverse of Pains
  4. Focus on the FIRE!
  5. Features are dictated by Benefits
  6. Know your product status
  7. Good taglines emphasize Benefits
  8. Summary

Check out more KISS Canvas Content.

8 Steps To Becoming An Angel Investor

The Angel Capital Association put our a great starter guide for people who are Angel Curious (my term, not theirs :)).

The Short version:

  1. Make sure you meet accredited investor standards
  2. Understand the risks of investing in startups
  3. Educate yourself
  4. Ask experienced angels for advice
  5. Join an angel group or angel platform (like the River Valley Investors)
  6. Develop an initial investing strategy
  7. Actively participate in Q&As
  8. When ready, write that first check

Get the full details from the original article here.

Why Innovation Fails

This great article on Forbes details the many ways innovation inside of a mature organization can fail. Some of the key points:

  1. Ideation is easy… and not enough: It is relatively easy to hold events (like hackathons). They are fun, engaging, and generate a lot of ideas. But… it is just step one of the journey. Almost all organizations fails to do steps 2+ right, which leads to employee frustration and failure to develop the ideas. Doh!
  2. The model needs to work: Your idea needs a scalable, economically sustainable business model. With, you know… customer who want to pay you more than it costs to make & deliver it :). People often assume that if they have a great idea, making it into a great business is fairly straightforward. Alas, it is not so!

Mature organizations are usually filled with people who are great at executing a proven model. They usually do not have expertise in how to generate, vet, and validate new business opportunities. These are the very issues we help mature organizations work through at the Lean Innovation Institute.

Hat tip to Ric Pratt.


KISS Canvas: 2. Pains

[This is a part of a series on the KISS Canvas]

Once you have identified who your customers are, your next job is to gain deep insights into their pains. This video walks you through the PAIN box of the KISS Canvas, but more importantly, gives you tools for finding the pains that you must solve first if you want to succeed.

Here is each sub-lesson:

  1. Introduction
  2. Pains are felt by the customer
  3. Only list pains you can address
  4. Pains must be intense
  5. Summary

Check out more KISS Canvas Content.