The classic investor pitch, as exemplified in Guy Kawasaki’s investor outline in my previous post, always starts with The Problem. However, as a fellow MIT Venture Mentoring Service mentor said in a recent mentoring session, new companies aren’t always about solving problems, sometimes they are about taking advantage of new opportunities.
He gave as a great example the founding story of Levant Power.
Shakeel Avadhany was driving over a bumpy road one day when it occurred to him that the large forces produced by his car’s busily stroking suspension might be harnessed to generate electricity. He conceived of a mechanism that could achieve this and built a prototype through MIT’s Madmec competition. After ascertaining that there could be a market for the device, Mr. Avadhany teamed up with classmate Zack Anderson to advance the prototype, raise capital, and create Levant Power (Levant stems from Levantar, Latin root for “uplift”). Through development it became increasingly apparent that vehicle makers were looking for more than power– they sought breakthrough improvements in ride and handling. GenShock has since been adapted to backdrive the generator to push and pull the wheels while also regenerating power. We now call GenShock an active, regenerative suspension and our goal at Levant is to realize its full potential in the marketplace.
So in this story the founder wasn’t really solving the problems of a car going over bumps in the road but rather taking advantage of the opportunity of the kinetic energy created by those bumps to invent a new type of shock absorber.
So the moral of this story is that startups aren’t always about solving a problem, they can also be taking advantage of a new opportunity to create a new product or service. But once you do, you’ll still need to be prepared to present all the rest of the points on Guy Kawasaki’s investor outline!