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24 | BROADBAND COMMUNITIES | www.broadbandcommunities.com | JANUARY/FEBRUARY 2014 PROVIDER PERSPECTIVE A re you ready to jump into the shark tank? Every private cable operator (PCO) has been there at one time or another. Whether you are trying to start a business, kick-start growth or acquire a competitor, you need capital. Pitching a business plan to the "shark investors" can be challenging, frustrating and very rewarding. Sharks are professional investors who read dozens of business plans every day and listen to pitches from CEOs about how well-oiled their machines are and how low-risk their plans are. When the sharks poke holes in a plan, an unprepared entrepreneur has difculty standing up to their attacks. I enjoy watching the ABC show "Shark Tank." Each week, potential startups present their business plans to fve or six investors, who ask pointed questions and sometimes ofer to invest. Viewers can quickly determine which companies really understand their businesses, their markets and their customers. Contestants walk in with confdence, hoping to score fat checks. All too often, they walk out with nothing other than a great experience. In a recent episode, a young woman pitched an idea for renting used wedding gowns. Te sharks didn't like it. Tey determined that she hadn't proved her concept, there wasn't enough volume to be successful and she didn't have adequate experience. One shark ofered a smaller amount than she was requesting for half her company. She respectfully declined. I read many business plans from entrepreneurs who want to serve the multiple-dwelling-unit (MDU) market. Tey range from operators to new technology providers. Some plans are well thought out and ofer comprehensive assessments of the competition, the MDU market and the strategy needed to drive growth. Others are not. WHAT'S THE DIFFERENCE? A lot of entrepreneurs are attracted to the MDU market because of its scale, its operating efciencies and its targeted audience. Some sketch out simple models that show the number of new MDU deals they can launch per year, the average number of units per MDU and a typical price point. Tey have modeled a cash cow. What shark wouldn't want a piece of it? However, they can't answer tough questions about property owner demands, service agreement nuances, competitor responses and technology changes. "How can you get that many deals a year if your competitor reduces its price to $5 below yours? What will you do then?" An entrepreneur must plan for all contingencies and have thorough answers to these difcult questions. Two strengths consistently lead to success in the MDU shark tank: strong experience in the MDU market and the ability to sell. Good engineering capabilities, a fnance background and an understanding of the broadband business are all nice to have, but you can't outsource the sales component and you can't research your way to good MDU knowledge. Te entrepreneur must bring these skills. Te sharks tend to agree. If you watch the show, you will see a lot of due-diligence questions about experience in the market and a keen understanding of the competitive landscape. Tey are testing an entrepreneur's ability to sell. "Do we believe him? Is she confdent? Convincing? Credible?" Mark Cuban, one of my favorite sharks, seems to agree. "Learn to sell," he said in a recent Forbes article. "In business, you're always selling – to your prospects, investors and employees. But don't sell your product. Solve their problems." So I tell PCOs who are building their pitches: Tink about your business and how you can sell a solution to the MDU market. Why is your ofering better than the alternatives? Why will your customers care? Are you better at things that matter most? Is the diference sustainable? Tis is a good time of year to develop and package a pitch if you want to jump into the shark tank. Engage an independent person to review your plan. (I do this all the time and am happy to help.) After all, you don't want to get fed to the sharks without a good action plan. Best wishes for a very successful 2014! v Bryan Rader is CEO of Bandwidth Consulting LLC, which assists providers in the multifamily market. You can reach Bryan at bryanjrader@yahoo. com or at 636-536-0011. Learn more at www.bandwidthconsultingllc.com. Prepare for the Shark Tank Everyone has to raise capital at some time or other. Are you ready to answer due-diligence questions from potential investors? By Bryan Rader / Bandwidth Consulting LLC Bryan Rader will share his expertise on the world of MDU technology at the Summit, April 8–10. BBC_Jan14.indd 24 1/29/14 10:24 AM