By: Christian Fea
Recognizing a customer life cycle and aiming for these distinct steps in your customer retention strategy is an important building block to your company's relationship marketing scheme. A relationship marketing platform puts the customer at the central focal point of your business, and thinking in terms of a customer life cycle and how to move your customers through these distinct stages will help you select, target, and retain a strong customer base.

A customer life cycle may vary depending on your company and what types of products and services it sells. Your customers will have a different buying cycle depending on what you sell. For example, if your company sells coffee, the life cycle and re-order time will be different for your customers than it would be if you were selling contact lenses or shoes. If your business gets customers on a monthly renewable buying scheme, your customer life cycle will be slightly different from a company who has customers purchasing roughly quarterly or every six months.

Given these parameters, there are five stages in a customer life cycle that are readily accepted and agreed upon. These are the natural procedures that a customer goes through when considering a purchase, making a purchase, using a new product and staying loyal to a product and company. You may need to alter your customer lifecycle scheme, but these five steps are a good way to get started.

Step 1: Reach

The first step in a customer life cycle is to reach out to prospective clients. You need to think in terms of how to gain a new clients attention.

Step 2: Acquisition

Acquisition is the step where you show a potential customer what your company has to offer. Once you have the attention of a potential new client, you must engage them to keep their interest.

Step 3: Conversion

Conversion is the act of turning a prospect into a paying customer. It sounds a bit underhanded, as though you are trying to "convert" a client from a competing company to yours, but this is just a technical term. The goal here is to convert someone who is merely considering a purchase to actually making a purchase.

Step 4: Retention

Retention in the customer life cycle is exactly what it sounds like: you want to figure out how to retain and keep this new customer as a repeat client. You'll need to focus on things like personalized attention, offers and customer service to make an impression with your new client, and inspire them to keep purchasing from you.

Step 5: Loyalty

Loyalty is distinct from retention - at first glance they may seem like the same thing, but they are not. Retention is about turning a new customer into a repeat customer, creating a personal loyalty. But loyalty in the realm of a customer life cycle applies to word of mouth. If you can get your existing customers to recommend your products and services to other people, this is what really helps to create a loyal following.

Developing a customer life cycle and thinking in terms of this cycle every step of the way is an integral part to a successful relationship marketing plan and will help ensure the success of your online business.

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By: Christian Fea

Joint venture marketing and camouflage marketing together form a great strategy that will bring success to your Internet business. Joint venture marketing is a type of marketing and advertising that centers on forming a partnership with one or more other business to maximize profits for all of the companies involved in the partnership.

Camouflage marketing is implementing the use of a well-known trigger where people draw conclusions about the nature of something based solely on its appearance. It is human nature to do this, and the combination of joint venture marketing and camouflage marketing uses this principle to maximize marketing strategy for the utmost benefit to the parties engaged in the enterprise. This combination of joint venture and camouflage marketing can:


- Bring qualified prospects and leads to your website
- Maximize offline prospects
- Minimize your out-of-pocket costs

Camouflage Marketing

Joint venture marketing is a fairly straightforward concept to grasp, but camouflage marketing is a newer concept, which requires a bit more attention to understand.

Camouflage marketing is a way of marketing that is hidden (hence, camouflaged) in everyday language and images. It implements a psychological mechanism that is at work all the time in the human brain, where we draw conclusions about the actual nature of something based solely on its appearance.

This form relies upon the old belief that "if it looks like a duck, walks like a duck and quacks like a duck, then it must be a duck." This principle is at work in our brains all the time and is the basis for many of the split second decisions that we as human beings make all the time.

Make your advertisement look like an article

Camouflage marketing, in combination with joint venture marketing, can create a tremendously successful campaign - especially in how your advertisements come across to potential customers. One trend that helps lend credibility to your advertisement is to craft your ad so that it looks like an informative article; this will lend credibility to your product and ultimately get more people to pay attention to your ad and your company.

The format of an article promises substantial and factual information, which will make your advertisement more authoritative. The editorial style carries the weight of integrity with it, as well as a positive emotional trigger, which can mean a boost in your sales!

This concept may initially sound a little suspect - as though you are manipulating your customers. This is not the case at all! Most people know when they are looking at an advertisement vs. a scholarly article - there is no trick here. The thing that you are capitalizing on is the illusion of a factual, editorial article. And, let's face it, all marketing and sales is about creating an illusion; we know that the pretty watch or the sexy car isn't going to improve our looks or our love lives, but that is the way that many products are marketed, and what we, as a consumer society, happily buy into.

This type of camouflage marketing, combined with joint venture marketing, has the possibility of taking your business to a new level.

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" The idea that the Cosmos itself undergoes an immense, indeed an infinite, number of deaths and rebirths. It is only in the Vedas in which the time scales correspond, to those of modern scientific cosmology (age is billions of years). A millennium before Europeans were willing to divest themselves of the Biblical idea that the world was a few thousand years old, the Mayans were thinking of millions and the Indians billions."
Dr. Carl Sagan, (1934-1996) famous astrophysicist

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Who needs self promotional products? Anyone that is selling or promoting anything.

What most self-promoters need is a way to keep their name and contact info in front of their prospects or "suspects"; in short they need a message that keeps on messaging.

We all have received promotions in the mail, by visiting salesfolk or at trade shows. At most trade shows, some businesses even give out custom bags so attendees have a place to put all their promo stuff; a promo bag to hold all those promo handouts.

Why do businesses bother with promotional materials? The simple reason is they work by spreading messages, themes and images and keeping those messages in front of those that have been targeted.

Let's say you are a plumber that gives out magnetic business cards so folks can stick them on their refrigerators. Most plumbers have their business name and contact info on their trucks.

A self promotional plumber may also have his magnetic business cards stuck on his truck with a sign "Please Take One".

Sure it's a silly idea and you may laugh. But plumbers that use this strategy report they usually replace all their magnetic cards every day.

Magnetic cards are cheaper than mass media, almost as cheap as some standard business cards, and have a lot more 'staying' power.

And it makes sense if you have ever needed a plumber.

The key is to look at your sales process and sales cycle and determine where promotional products can be leveraged to deliver your message. Most promotional product campaigns fail because they fail to focus first and foremost on the desired results.

Before purchasing your promotional products determine how and to whom you will deliver them. This will help you narrow down your choices for appropriate products.

"And don't forget to track your results so you can improve" adds Wilcox.

Not only is there an endless array of self promotional products but also a seemingly endless way to "package" or merchandise your self promotional messages.

Take promotional caps. There are caps of all colors and styles. Some can have custom logos embroidered with a 3-D effect and even messages printed on the edge of the bill.

Given the right strategy many people could be wearing your self promotional caps. Strategy is why it is important to think through your desired results first.

Self promoters are strategic, not reactive. For instance, farmers in the Salinas Valley give their farmworkers company logo caps at the end of the growing season.

The idea isn't that the farmworkers will return to Mexico for the winter and wear their caps everywhere spreading the company message; the cap logo is simply a promotional reminder of the farm's name and where to go for work at the start of spring season.

Self promotional products can take many forms. There are pens, HiLiters, letter openers, staplers, badge holders and dog tags. There are memo pads, PDA holders, calculators, clocks, radios, mugs, coasters and water bottles.

You can try backpacks, tote bags, coolers, velour pouches, tape measures, knives and flash lights. And key chains, pill cases, first aid kits, luggage tags, combs, fans and pedometers.

And candles, shampoo, hand lotion, hand sanitizers, lip balm, sunscreen and bug repellant. And golf tees, balls, towels and totes. And more.

It is helpful to remember that not all promotional items need to be useful like calendars or pens. You can also try fun items like stress balls, yo-yos and piggy banks. My favorite are those clear balls that flash when bounced. Next to food and chocolate.

Food and candy are always popular. How about gum, mints, gourmet food, cookies, coffee, hot chocolate, ice tea and bottled water. Customers, prospects and suspects love to eat and drink! But then again, don't we all?

And what if your promotional targets are chocolate lovers like many of us? You can try chocolate wrapped in foil, coins, sports balls, squares, gift sets, bars, truffles or custom molds.

And of course the more traditional magnetic business cards, notepads, calendars and even custom business cards. That's a lot to think about so where to begin?

Start with your sales and promotional cycle and see where your customer and prospect "touchpoints" or points of contact are. Your message's desired result may be a phone call, an appointment or an e-mail inquiry.

Use your self-promotional products to leverage or "convert" to the next step toward your desired promotional results.

With focus and attention to results, self promotional products can add power and zip into your promotional campaigns.

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Dan Roam is an expert in helping people think and communicate with pictures. His theory is that anyone with a pen and a piece of paper (for example, a napkin) can explain even the most complex business ideas as well as communicate better with customers, vendors, and employees.

I caught up with him just after he published his new book, The Back of the Napkin: Solving Problems and Selling Ideas with Pictures.

1. Question: What problems are you really talking about solving with pictures?
Answer: All of them: business strategy challenges, project management issues, resource allocation problems--even personal problems--can all be clarified, if not outright solved, through the use of pictures. And the pictures we're talking about are simple ones. If you can draw a circle, a square, an arrow, and a smiley face, you can draw any of the problem-solving pictures I talk about.


2. Question: If all of us have innate visual talent, why don't we see more pictures in business?
Answer: Wall Street dictates that business is a numbers game, and things like P&L, OPEX, and market cap are the obvious numbers to measure. Given this view, the business world believes that people who succeed are analytically driven, and that repeatable, measurable, and quantitative, "left-brain" skills are what make a great business person.

Because it feeds the beast, this model becomes a self-fulfilling prophecy--but one that is only half right. By neglecting the importance and development of innovative, synthetic, and creative "right-brain" skills, businesses often fail to account for their own breakthrough people, ideas, and strengths and in turn misunderstand their own success.

Vision, unlike spoken language, is not localized on one side of the brain. Visual thinking demands, and takes advantage of, everyone's innate "whole brain" abilities. In board rooms and business schools everywhere, people instinctively know this, but since "looking, seeing, imagining, and showing" have never been measured or taught, few business leaders recognize their own skills.


3. Question: What's the hardest part in getting businesspeople to take "visual thinking" seriously?

Answer: There's nothing hard about convincing businesspeople of the power of pictures once they see it in action. The hard part is convincing them that they can do it themselves. Most people are uncertain about solving problems with pictures because they are uncertain about their own ability to draw. I spend much of my time convincing the skeptical that even if they draw like a kindergartner, that's good enough. In fact, when we were kindergartners (before we could read and write) we were already accomplished visual thinkers.

My point isn't to patronize or belittle our advanced educations; it's just to point out that we already knew how to do this--how to discover ideas and share them through pictures--long before we developed our sophisticated verbal skills. Visual thinking in all its forms--looking, seeing, imagining, and showing--is an innate skill that we all share. And it's a crime that so few people, and effectively none in business, have been encouraged to develop these skills beyond what we were born with.

4. Question: What is the neuroscience behind this?

Answer: Recent breakthroughs in vision science have indicated that there are multiple "vision pathways" along which the signals from our eyes travel into and through our brains. Each pathway keys off different visual cues in the environment--one pathway looking to identify the objects around us, another understanding where they are, another determining how many there are, another watching for changes over time, etc. This process takes place in parallel, breaking the entire visual world down into discrete elements that we initially process independently, and then only later "see" in our mind's eye as a whole.

What's fascinating is that if we reverse the process and create pictures in the same way--breaking down any problem and its corresponding picture into distinct "who," "what," "how much," "where," and "when" elements, we can convey the "how" and "why" to anyone in a way they will understand.

5. Question: Why are some problems hard to see and others not?

Answer: Complexity is always the challeng-- especially when many aspects of the problem are masked by others. If we see a cup with a hole in the bottom, we can quickly deduce the cause of the puddle on the floor. The only trouble with "obvious" solutions is that the world is complex, and complex things tend to be “obvious” only after someone else shows them to us. That the earth rotates around the sun is obvious to us now, but it took tens of thousands of years for people to see it.

The reason is because we can't see everything. Our eyes are always right on the verge of being overwhelmed with visual stimulus, so our minds spend a lot of time keeping stuff out. That's why we gravitate towards the simple. If we can "get" something quickly, then we can move on to something else.

But we need to be careful with "simple." A simple idea can be just as bad as a complex one. We do ourselves a lot of harm when we confuse "clarity" with "simplicity." By taking the time to look at a problem, really see what's going on, imagine what might not be visible, and then show our discovery to someone else, we will see more clearly what's going on, and won't be fooled by the first "obvious" explanation.

6. Question: What is an example of how a business problem was solved with a sketch?

Answer: The most famous business napkin is the route map of Southwest Airlines. When businessman Rollin King and lawyer Herb Kelleher sat down in 1967 in the St. Anthony's Club in San Antonio, their intent was to drink to the successful closing of King's previous airline. Instead, King picked up a pen and--drawing a triangle on a bar napkin as he spoke--said, "Wait a minute. What would happen if we created an airline that only connected Dallas, Houston, and San Antonio?" The world's most profitable airline was born.

My personal favorite is still a work in progress. I've spent time with the senior executives of Peet's Coffee and Teas helping map out the company's growth and business operating strategies. In number of coffee retail stores, Peets is second after Starbucks, but it is still orders of magnitude behind: one hundred and sixty stores to Starbuck's fifteen thousand. Clearly there is the opportunity for Peets to grow, but Peets has long been known as the "best" coffee available. So the question remains, “How do you grow without giving in on quality?"

We're created a simple back of the napkin sketch that outlines Peet's approach to maintaining quality while growing, and it has been circulated around the company so that everybody “gets it” and sees exactly where they fit into the "quality chain."

7. Question: Why do you recommend that people throw away their PowerPoint presentations?

Answer: I'm not Edward Tufte: I don't say that using PowerPoint makes us retarded. What I do say is this: when it comes to PowerPoint--or Keynote or Open Office or Google Docs--don't throw away the software, but do throw away the mindset. PowerPoint is just a hammer, and in the same we don't blame the hammer if a building falls down, we shouldn't blame the software if our communications suck. When it comes to organizing and idea and structuring a storyline, PowerPoint is a fine tool as are mindmaps, Visio, and lots of other applications. But when it comes time to discover, develop, or share an idea, nothing is more powerful than a simple picture drawn live in front of--and ideally with the participation of-- our audience.

Aside from the cognitive and neurological science behind my statement, the fact is that when an audience sees an elaborate and polished presentation, they instinctively believe it is “done” and have a very hard time adding anything constructive to it. On the other hand, when they see the picture coming together in front of their eyes, regardless of how simple or ugly it may be, they emotionally respond and participate.

8. Question: Why do you recommend throwing the computers out of meeting rooms?

Answer: I love technology. I'm as much of a geek as you can find anywhere--in fact, as a hobby on weekends I use high-end 3D drawing programs to create super-detailed illustrations of spacecraft for the National Space Society. That said, we've gone completely overboard in relying on our computers in all aspects of our thinking and working processes, especially when the use of our machines actually inhibits our innate abilities.

I created every picture in my book with nothing but a Sharpie and a stack of blank paper. There is a time and a place for all the tools we have available to us, and a meeting of the minds is the last place we need a computer. Interacting with a keyboard and proscriptive software doesn't add anything to our ability to think, and in fact interferes with many of our baseline cognitive abilities especially when spontaneity, intuition, neurological connectivity, sharing, and instant communication are key.

9. Question: Aren't artistic people better at this than business people?

Answer: Some people are better at visual thinking than others just like some people are better singers, runners, or code-breakers. But that doesn't mean we don't all hum in the car, jog in the park, or play Suduko. For the average business person to neglect his or her innately remarkable visual skills simply because someone else might be even better is a terrible waste of ideas and ability.

I'm not saying visual thinking is the only way to think nor am I saying that it always the best way. What I am saying is that any problem can be made more clear through the use of a picture, and it is always worthwhile to sketch out a problem--if only for a minute--just to see what emerges.

10. Question: Why is it important for us to break down visual thinking into your process of "look, see, imagine, and show"?

Answer: Every time I walk into a business meeting, workshop, or seminar somebody always says, "I'm not visual; I can't draw." My response is that if that person is visual enough to walk into the room and find a place to sit down, they're visual enough to understand everything we are going to talk about and to find value in it. I've never been let down.

The importance of understanding the four steps of visual thinking--looking, seeing, imagining, and showing--is that it makes clear that drawing is only a tiny part of visual thinking, and it comes at thevery end of the process, not at the beginning. Visual thinking is like a game of poker: we look at our cards, we see the patterns, we imagine what our winning hand would look like, we show our winning hand, and we rake in all the money.


11. Question: How do you think visual thinking will transform business in the next decades?

Answer: We're just at the beginning of an enormous and inevitable trend that is going to take over business operations and communications and will have huge impact on the design of the tools we use for both. There are three mega-trends in the world of business: globalization, information overload, and staggering increases in complexity.

As globalized supply chains and emerging markets flatten the world, as information overload becomes the status quo, and as communication channels proliferate, the complexity of business problems is only going to increase. There's more data out there in more forms and languages than ever before, and there's a greater need for businesspeople to make good decisions quickly and communicate their thinking to others.

A recent issue of Fortune has an eye-opening article on Boeing's new 787 and how it is literally being built around the world. Here you have arguably the most sophisticated and complex machine ever created, and it is being assembled to tolerances of a millionth of an inch and fractions of a penny on thousands of assembly lines in dozens of countries by people speaking dozens of languages. All this is possible only because the whole thing--the plane, the processes, the project--is mapped out in countless pictures.

Becoming comfortable with and confident in our visual abilities--improving our ability to look at complex information, see important patterns emerge, imagine new possibilities, and clearly show those discoveries to others--is going to become our most valuable asset. Looking just a short time into the future, visual thinking will significantly alter how business gets done in three ways:

1. Help us make better decisions faster. Within the next few years we will see most business analytics delivered in immersive graphic formats that allow for simultaneous manipulation of individual numbers and visualization of complex interactions and outcomes. There are many companies out there now like Tableau and Business Objects building these tools, and even plain-Jane Excel has enormous potential given the graphics processing capabilities of even the most basic business personal computers.

2. Help us communicate our decisions and visions more effectively. As more businesspeople become more aware of the power of pictures as a communications tool, more tools will become available to help create meaningful charts, diagrams, timelines, maps, and flowcharts--both alone and as teams. The great issue here is to first understand what we want to show and what our audience is willing to see and only then boot-up the machines.

3. Help our teams execute those decisions more efficiently. Project managers have always known the power of a visual timeline to ensure everybody knows what they're supposed to be doing when. The problem is that the product manager was the only one who knew how to understand the chart they created--to the rest it looked like a wall of hieroglyphics. Several companies are now working on interactive, team-created timeline tools of infinite scalability. Such tools will allow for globally distributed groups to be in instant visual contact with their project and each other and to monitor whatever needs to be happening at the level of detail that matters most at that moment.

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This is my last posting for my friends at Sun Microsystems, and I'd like to leave you with something to remember me by: a list of the five most important lessons I've learned as an entrepreneur.

1. Focus on cash flow. I understand the difference between cash flow and profitability, and I'm not recommending that you strive for a lack of profitability. But cash is what keeps the doors open and pays the bills. Paper profits on an accrual accounting basis is of no more than secondary or tertiary importance for a startup. As my mother used to say, "Sales fixes everything."


2. Make a little progress every day. I used to believe in the big-bang theory of marketing: a fantastic launch that created such inertia that you flew to "infinity and beyond." No more. Now my theory is that you make a little bit of progress every day--whether that's making your product slightly better, increasing your skill in one small way, or closing one more customer. The reason the press writes about "overnight successes" is that they seldom happen--not because that's how all businesses work.

3. Try stuff. I also used to believe that it's better to be smart than lucky because if you're smart you can out-think the competition. I don't believe that anymore--this is not to say that you should strive for a high level of stupidity. My point is that luck is a big part of many successes, so (a) don't get too bummed out when you see a bozo succeed; and (b) luck favors the people who try stuff, not simply think and analyze. As the Chinese say, "One must wait for a long time before a Peking duck flies into your mouth."

4. Ignore schmexperts. Schmexperts are the totally bad combination of schmucks who are experts--or experts who are schmucks. When you first launch a product or service, they'll tell you it isn't necessary, can't really work, or faces too much competition. If you succeed, then they'll say they knew you would succeed. In other words, they don't know jack shiitake. If you believe, try it. If you don't believe, listen to the schmexperts and stay on the porch.

5. Never ask anyone to do something that you wouldn't do. This goes for customers ("fill out these twenty-five fields of personal information to get an account for our website") to employees ("fly coach to Mumbai, meet all day the day you arrive, and fly back that night"). If you follow this principle, you'll almost always have a good customer service reputation and happy employees.

I hold these truths to be self-evident and hope that you can use them to kick butt and change the world.

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(Since I've antagonized the venture capital community with last week's blog, I thought I would complete the picture and “out” entrepreneurs to begin this week. The hard part about writing this blog was narrowing down these lies to ten.)

I get pitched dozens of times every year, and every pitch contains at least three or four of these lies. I provide them not because I believe I can increase the level of honesty of entrepreneurs as much as to help entrepreneurs come up with new lies. At least new lies indicate a modicum of creativity!



“Our projections are conservative.” An entrepreneur's projections are never conservative. If they were, they would be $0. I have never seen an entrepreneur achieve even her most conservative projections. Generally, an entrepreneur has no idea what sales will be, so she guesses: “Too little will make my deal uninteresting; too big, and I'll look hallucinogenic.” The result is that everyone's projections are $50 million in year four. As a rule of thumb, when I see a projection, I add one year to delivery time and multiply by .1.
“(Big name research firm) says our market will be $50 billion in 2010.” Every entrepreneur has a few slides about how the market potential for his segment is tens of billions. It doesn't matter if the product is bar mitzah planning software or 802.11 chip sets. Venture capitalists don't believe this type of forecast because it's the fifth one of this magnitude that they've heard that day. Entrepreneurs would do themselves a favor by simply removing any reference to market size estimates from consulting firms.
“(Big name company) is going to sign our purchase order next week.” This is the “I heard I have to show traction at a conference” lie of entrepreneurs. The funny thing is that next week, the purchase order still isn't signed. Nor the week after. The decision maker gets laid off, the CEO gets fired, there's a natural disaster, whatever. The only way to play this card if AFTER the purchase order is signed because no investor whose money you'd want will fall for this one.
“Key employees are set to join us as soon as we get funded.” More often than not when a venture capitalist calls these key employees who are VPs are Microsoft, Oracle, and Sun, he gets the following response, “Who said that? I recall meeting him at a Churchill Club meeting, but I certainly didn't say I would leave my cush $250,000/year job at Adobe to join his startup.” If it's true that key employees are ready to rock and roll, have them call the venture capitalist after the meeting and testify to this effect.
“No one is doing what we're doing.” This is a bummer of a lie because there are only two logical conclusions. First, no one else is doing this because there is no market for it. Second, the entrepreneur is so clueless that he can't even use Google to figure out he has competition. Suffice it to say that the lack of a market and cluelessness is not conducive to securing an investment. As a rule of thumb, if you have a good idea, five companies are going the same thing. If you have a great idea, fifteen companies are doing the same thing.
“No one can do what we're doing.” If there's anything worse than the lack of a market and cluelessness, it's arrogance. No one else can do this until the first company does it, and ten others spring up in the next ninety days. Let's see, no one else ran a sub four-minute mile after Roger Bannister. (It took only a month before John Landy did). The world is a big place. There are lots of smart people in it. Entrepreneurs are kidding themselves if they think they have any kind of monopoly on knowledge. And, sure as I'm a Macintosh user, on the same day that an entrepreneur tells this lie, the venture capitalist will have met with another company that's doing the same thing.
“Hurry because several other venture capital firms are interested.” The good news: There are maybe one hundred entrepreneurs in the world who can make this claim. The bad news: The fact that you are reading a blog about venture capital means you're not one of them. As my mother used to say, “Never play Russian roulette with an Uzi.” For the absolute cream of the crop, there is competition for a deal, and an entrepreneur can scare other investors to make a decision. For the rest of us, don't think one can create a sense of scarcity when it's not true. Re-read the previous blog about the lies of venture capitalists, to learn how entrepreneurs are hearing “maybe” when venture capitalists are saying “no.”
“Oracle is too big/dumb/slow to be a threat.” Larry Ellison has his own jet. He can keep the San Jose Airport open for his late night landings. His boat is so big that it can barely get under the Golden Gate Bridge. Meanwhile, entrepreneurs are flying on Southwest out of Oakland and stealing the free peanuts. There's a reason why Larry is where he is, and entrepreneurs are where they are, and it's not that he's big, dumb, and slow. Competing with Oracle, Microsoft, and other large companies is a very difficult task. Entrepreneurs who utter this lie look at best naive. You think it's bravado, but venture capitalists think it's stupidity.
“We have a proven management team.” Says who? Because the founder worked at Morgan Stanley for a summer? Or McKinsey for two years? Or he made sure that John Sculley's Macintosh could power on? Truly “proven” in a venture capitalist's eyes is founder of a company that returned billions to its investors. But if the entrepreneur were that proven, that he (a) probably wouldn't have to ask for money; (b) wouldn't be claiming that he's proven. (Do you think Wayne Gretzky went around saying, “I am a good hockey player”?) A better strategy is for the entrepreneur to state that (a) she has relevant industry experience; (b) she is going to do whatever it takes to succeed; (c) she is going to surround herself with directors and advisors who are proven; and (d) she'll step aside whenever it becomes necessary. This is good enough for a venture capitalist that believes in what the entrepreneur is doing.
“Patents make our product defensible.” The optimal number of times to use the P word in a presentation is one. Just once, say, “We have filed patents for what we are doing.” Done. The second time you say it, venture capitalists begin to suspect that you are depending too much on patents for defensibility. The third time you say it, you are holding a sign above your head that says, “I am clueless.” Sure, you should patent what you're doing--if for no other reason than to say it once in your presentation. But at the end of the patents are mostly good for impressing your parents. You won't have the time or money to sue anyone with a pocket deep enough to be worth suing.
“All we have to do is get 1% of the market.” (Here's a bonus since I still have battery power.) This lie is the flip side of “the market will be $50 billion.” There are two problems with this lie. First, no venture capitalist is interested in a company that is looking to get 1% or so of a market. Frankly, we want our companies to face the wrath of the anti-trust division of the Department of Justice. Second, it's also not that easy to get 1% of any market, so you look silly pretending that it is. Generally, it's much better for entrepreneurs to show a realistic appreciation of the difficulty of building a successful company.

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