Sure, you’ve got a great idea for a new product – that can dramatically improve the standard of care. If an investor gives you 5 minutes, it’s easy to show how your innovation is an upgrade – or a disruptive breakthrough.
But investors want to know more than, “How is your innovation better? What’s it fix? How’s it work? Does it work?” They’ll want to know how you’ll take a hot idea, turn it into a viable business and scale that business. They’ll want to see how you’ll convince early majority adopters to do a Value Analysis Calculation, so they displace conventional solutions and make your innovation the new standard of care. They’ll want to know how you plan to profit from the innovation and how they’ll profit alongside you.
AIM high is one of the 5 success scores we measure in the EnQ Entrepreneurial Leadership Assessment. If you can answer the questions that investors ask, you’ll earn a positive score on this success score. If all you can describe is your technical, engineering, aesthetic or quality-of-care breakthrough, you may be a great inventor and an insightful futurist who can see what the market needs. But that won’t earn you a high EnQ as an entrepreneur who can launch, build and scale a successful business.
To AIM high and show investors you’ll achieve a lofty PURPOSE, it isn’t enough to show how you’ll do good with your inventi0n. You’ve also got to show how you’ll do well – with a profit that creates wealth for everyone who invests in your venture.
We’re often surprised when high-potential business unit leaders score low on AIM high. They come to their boards, ELTs, Value Analysis Committees (VOCs) with a hot idea – that will give them a jump on the competition and a sure way to seize an opportunity and win a bid. But when the CFO asks a few pointed questions about where it will take the franchise and how it will scale profitably, the business case falls apart. They score high on inventive thinking, passion, engineering, learning agility – but low on EnQ.
We’re also surprised when some accomplished entrepreneurs score low on AIM high. In a recent assessment, an accomplished VC principal with three successful exits scored low on AIM high. We scratched our heads and wondered how this could happen. Surely, with her credentials, she knew what would create wealth, we thought, and wasn’t naive enough to think that “building a better mousetrap would make everyone beat a path to her door.”
But when we listened to her pitch and looked at her plans, not just the highlights of her CV, we could see what was missing – and where wealth-creation was a dream and would happen by happenstance, not because of a viable plan. The VC-principal turned entrepreneur waved off questions about wealth-creation as premature. She couldn’t see the blind spots which resulted in a low EnQ – and, when she finally “got it,” she assured investors that they should believe in her to figure out the wealth-creation part of the equation as her track record suggested she’d done in the past. And she got testy, almost hostile, when some members of the due diligence team asked about her exit plan, her scale-up plan, her staffing plan and her plan to create demand, not just fulfill demand – and whether the investment she was requesting would be enough to generate wealth.
Last week was the week of the annual International Bio Conference and Reinventing Early Stage Investing (RESI) conference. In four nonstop days, we heard pitch after pitch after pitch – from the best and brightest health technology and life sciences innovators. All of them could describe how their new therapy works and how patients, families and society will benefit. But fewer than 20% had a pitch that showed a high EnQ – showing how they’d get the therapy on formulary, how they’d attract licensing and commercialization partners and how their success would also become their investor’s success. Fewer than 50% could answer the WHY’s – Why does someone need this upgrade for your targeted patient profiles, in place of the current standard of care? Why is this a smart investment? Why does a payer and a commercial partner need this on formulary?
If you want to test your own EnQ – before you present to investors or see if you’ll pass due diligence – we invite you to request a copy of our EnQ Entrepreneurial Leadership Assessment. And if you’re an investor who wants to know if the team with a hot promising idea has “the right stuff” to generate wealth, we invite you to assess their EnQ as well. Before you get to that inflection point and wonder if the magic will actually happen.
Merom Klein PhD + Louise Yochee Klein PsyD invented the EnQ Entrepreneurial Leadership Assessment to tell investors and corporate CHROs whether high potential innovation leaders have the right stuff to create wealth with promising inventions. They are co-authors of MAKE COURAGE CONTAGIOUS, a guidebook for innovation leaders, and Principals with Courage Growth Partners, a leadership consultancy that equips high-potential corporate innovators and entrepreneurs to get traction and get support.