The Chinese Soda Analogy

Helping businesses to raise finance from Venture Capital Funds or Business Angels we spend a lot of time with management working out how best to get the message across, and how to get that WOW factor into the executive summary which will hopefully catch the attention of the VCs.    Then perhaps they'll read the business plan.   Assuming they read their emails or answer the phone once in a while.

Just as important is what not to say.    Never say "All we have to do is get 1% of the market".

Guy Kawasaki puts this well calling it the Chinese soda analogy.  "If a company can get just 1% of the people in China to drink its soda, it'll be selling a ton of soda. This is true. At the same time, it glosses over the difficulty of getting 1% of any market to use a particular product".

He also points out that investors really want to back companies to get a significant, and therefore defensible and valuable share of a market.  99% would be good, but even 30 -50% builds real value.  1% just looks threatened.