Tue, 18 April 2023
Illusion of Control
Hello, this is Hall T. Martin with the Startup Funding Espresso -- your daily shot of startup funding and investing.
The illusion of control phenomenon is defined by Wikipedia as the tendency to overestimate one's degree of influence over other external events.
Startups often display an illusion of control about how their product and sales efforts will take over a market.
Just as the gambler in the casino cannot make the dice come up the way he wants so the startup cannot predict how fast his product will gain adoption.
A few organic sales often lead startups to believe they have a working sales and marketing plan when in fact they have not yet developed a way to drive the process.
To convince investors the startup must show a repeatable, predictable process for generating leads, qualifying, and closing the sale.
Even at the early stage startups can track the number of leads generated through a channel and how many leads convert to a sale.
By showing this on a unit economics basis, you can overcome the illusion of control and provide clear evidence that you have a customer acquisition process in place.
Those with strong organic sales that come without much effort are the ones most likely to believe that they can grow sales without a program or process.
Thank you for joining us for the Startup Funding Espresso where we help startups and investors connect for funding.
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