Louis Foreman’s company, Enventys Partners, has worked on over 2,000 consumer products and launched over 2,000 Kickstarter campaigns. So he’s got a keen sense of where startups struggle, and how they find success.
Intellectual property — whether it’s a patent, trademark, copyright, or a trade secret — is the secret sauce of success.
“It’s the unfair advantage that you have over the competition that gives you some period of exclusivity where you don’t have to worry about someone competing with you directly in what you do,” Foreman, CEO if Enventys, says.
And equally as important, those ideas can affect a company or entrepreneur’s ability to raise capital.
Foreman says he talks with a lot of entrepreneurs and inventors about the troubles they have raising money — they can’t find angels or there’s not enough liquidity in the market place.
“And what I’m really hearing them tell me is they’re not doing a very effective job of explaining how they’re going to generate a return on that investment,” he says.
When it can be demonstrated that a return on investment can be generated, he says entrepreneurs will always find that capital to back an idea.
“You just have to think from the investor’s perspective: what is going to provide enough reward to justify the risk that they’re taking on,” he says.
But more foundational than the strategy of connecting with investors is the product or service around which a venture is formed. Foreman says the one commonality that seems to lead more often to success in the early entrepreneurial stages is that the product or service has to be unique.
“There’s got to be something about the product that makes a customer want to buy it because the reality is everything that we need as a society already exists,” he says. “Any product that you, as a new business or as an existing business, creates, is a replacement to something they’re already buying. And so it’s not really about convincing someone to try your product, it’s about convincing them to not buy something that they’re already comfortable with. That’s a real challenge.”
The good news, he says, is that retailers have made it easy for consumers to try new things, in part because they’ll take products back if you’re not satisfied with them. That, he says, gives consumers permission to try new products, new brands, new experiences, knowing that there’s very little associated risk. But makers and entrepreneurs must dazzle customers.
“We’ve got to give them a reason not only to try it, but to keep it,” he says.
Foreman, who was featured in a Dealmakers Conversation at the recent Smart Business Charlotte Dealmakers Conference, spoke about early-stage strategies as well as the opportunities that exist for entrepreneurs in 2021 in a market shaped by COVID. Click the video above to hear the full conversation.