Turning the Biggest Supporter into Your Best Customer
What if your school wasn't just the place where you conceived brilliant business ideas but was also your funding source, chief product-tester and first customer?
That was the scenario for the creators of IdeaPaint , a paint that turns any surface into a dry-erase board. While students at Babson College in Wellesley, Mass., Jeff Avallon and his partners John Goscha and Morgen Newman turned to the school for investors and then help with product research. In the end, Babson also became a customer. Now IdeaPaint is a worldwide brand.
The "aha" moment came in 2002, in a study room with walls covered in Post-it notes. Avallon and his friends were thinking about walls as collaboration tools, and Goscha came up with the IdeaPaint concept. Chalkboard paint existed; dry-erase paint did not.
"We loved the concept of being able to write over an entire wall," says Avallon, 26. "But covering the walls with white boards was impractical and expensive."
Product development took an arduous five years. Finding funding for an unfinished product was tougher, but the team found two professors, a college-board member and a parent of another student who believed in the idea. "Find investors who are on board with you as well as the concept," Avallon advises. "Especially when you don't have a finished product, or even an end date."
When pitching investors, the IdeaPaint team was careful to be clear about how the money would be used, how far it would go and what milestones investors could expect. That gave it a track record of delivering on expectations and made the subsequent rounds of funding possible.
When IdeaPaint finally had a prototype, "we had a conversation with everybody at Babson who could be a potential customer or user," Avallon says. "That ended up shaping our business plan, and when the product was ready, Babson became a customer."
That gave IdeaPaint instant credibility, not to mention real-world product demonstration that customers could drop by and see.
And they were sold: IdeaPaint, which starts at $99 for a 25-square-foot kit, is on the walls in 10,000 locations around the world, including MIT, MTV Networks and The Limited Brands. The Boston-based company has more than 1,500 sales reps and big distribution partnerships in the pipeline.
And, of course, the team has already gone back to the drawing board, to work on new products for mainstream consumers and businesses.
How to Pitch a Professor
Here are 10 tips from Elaine Allen, Babson prof and IdeaPaint investor:
1. Have a clear pitch that identifies the business opportunity and your vision in 10 minutes or less.
2. Be passionate. "I love to see that you totally believe in your idea."
3. Do due diligence on the prof. "Have a unique idea why I would be interested in investing."
4. Listen and consider all suggestions. "I may have a network and connections that can help you."
5. Demonstrate the depth of your knowledge and resources.
6. Prepare answers for every question you can possibly imagine. "This meeting is a little like an oral exam."
7. Realize you may not seal the deal in one meeting. "If you've gotten this far, you are more than halfway."
8. Bring along handouts on the business opportunity and finances. "Attention to detail impresses."
9. Show you understand the difference between risk tolerance and risk taking. "I want to know my investment is safe, but not too safe."
10. Be clear that you have the maturity to persevere on your own. "I already know you have the brains to do this or you wouldn't be in my office."--J.H.