The TikTok Revelation

I wasn't merely trying to connect with a younger audience. Just before the founder's arrival, I had been scrolling through TikTok and watched a video that perfectly illustrated my point. I quickly retrieved my phone, searched for a moment, and found the video I had just viewed.

The clip featured an American woman visiting a grocery store in Spain for the first time. Since she was unfamiliar with the language, she struggled to identify what to purchase.

Midway through the video, she displayed a moment of confusion while gazing at a shelf filled with yogurts. Eventually, she chose one, saying, "I'm picking this one because I recognize the brand."

In just nine words and a few seconds, this TikToker inadvertently conveyed a crucial lesson about entrepreneurship, more effectively than I could have articulated to the founder. So, I played it for him.

The Power of Familiarity

"What does this moment reveal about customer acquisition?" I asked as I paused the video.

The founder shrugged. "I don't know. It's just someone buying yogurt."

"True," I agreed. "But it's significant because it illustrates how real people behave in real situations. What does her choice of yogurt tell us?"

"She picked the only brand she recognized," he acknowledged, grasping the key insight but missing the broader implication. "That's probably the one I would have chosen too, since I didn’t know any other brands."

"Exactly!" I affirmed. "Her decision was based on familiarity, not features."

"But yogurt doesn't have features," he countered.

"Of course, it does," I argued. "Flavor, calorie count, fat content, and even whether it has fruit bits are all features. Yet, she opted for the brand she knew without exploring the others. Why does this matter for you?"

The founder pondered, and after a moment, it clicked. "Because it shows people often don’t take the time to analyze products and their features," he concluded. "Brand recognition seems to be more important than the product itself. There could have been superior options on that shelf, but it didn't matter."

"Precisely," I said. "As entrepreneurs, we often believe consumers will choose our offerings if they provide better value. But that's not how consumer behavior typically works. Purchasing decisions are rarely rational; they are often driven by emotion."

Addressing the Core Question

"So if what you're saying is accurate," the founder began, "I understand that consumers may not make logical choices. But how does this aid me in fundraising? What should I do?"

"You need to develop a customer acquisition strategy," I replied. "That's why I repeatedly asked about it. I believe in your ability to create a product, and most investors will too, so shift your focus away from the product. The critical question you must answer for yourself and potential investors is: How will you acquire customers?"

This isn't merely a pivotal question for him; it's crucial for all entrepreneurs. Businesses don't thrive solely by crafting outstanding products; they succeed by establishing reliable, scalable methods to attract users. Thus, the most vital question entrepreneurs need to address is: "How will you gain customers?" When your fundraising pitch answers this, you significantly enhance your chances of securing capital.

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In this video titled "The One Question That Every Tech Investor Will Ask," you'll discover what investors prioritize when evaluating startups, offering insights that can reshape your pitch.

The second video, "2 Questions to Ask Yourself Before Investing Time and Money Into a Business," presents critical self-reflective questions that every entrepreneur should consider before diving into their venture.