Last week I spent a day with some up and coming entrepreneurs with products ranging from patient care systems, to explosive monitoring systems and anesthetic recycling. I attended a day-long workshop hosted by the Toronto Venture Group. Towards the end of the day, these folks pitched their businesses to a panel of VCs who gave the thumbs up or down for a second meeting.
What I loved most about these pitches was the VC pursuit for acute bleeding from the neck pain. VCs are bulldogs when it comes to this - so I want to share with you an example of what real pain looks like based upon one company that pitched.
The company is Magasec.
Magasec provides inventory management and monitoring systems for HAZMAT. Yes, we're talking about explosives like dynamite! The real acute pain here is that today the monitoring is done manually with paper based systems and open to misinterpretation and error. Writing and recording is often difficult to read resulting in errors - and acute pain, well there's lots of it. It's a felony to inaccurately report the inventories and these must be filed with authorities on a daily basis. And effective this spring, new regulations are being enforced regarding the inventory and monitoring of explosives.
So real customer pain, you betcha! And the VCs on this panel were eating it up!. Better still, a market large enough for a VC to get interested. The market opportunity cuts across all players in the value chain, from explosive manufacturers to distributors, to end user sites like construction companies. Very cool indeed.
Contrast this with a presentation by another VERY interesting company that is able to recycle anesthetic that escapes in to the atmosphere - the statistic quoted by the entrepreneur was that 97% of anesthetic leaks out vs. being used by patients. I loved this one too! But the VCs were less excited - Why? the pain wasn't "bleeding" enough - yes hospitals care about the environment, but they care more about saving money - the entrepreneur did not convince them that it was a bleeding enough problem for the hospital to care about.
So lesson here - look closely at your pain - we all talk about "the customer pain" but is it really bleeding from the neck pain. Look at the environment, the customer situation, and express your value in their shoes. Magasec did a fantastic job of describing the customer's challenges and also highlighting the regulatory changes that will ignite the opportunity.
Great Job Patricia!
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