Leadership

5 things this professor can teach you about success after studying 30,000 business pitches

You can learn a lot from studying one business pitch. You can learn even more from studying 30,000.

Sean Wise, an entrepreneurship professor at Ryerson University, start-up expert and best-selling author, says he's always receiving pitches. Whether he's at a restaurant with his family or heading to the restroom, he says, there's someone eager to pitch a business idea.

"But I can't tell if a pitch is a good or bad idea in five minutes," the professor tells CNBC Make It. "It's disrespectful and a disservice to them."

However, Wise says that there are five things he's learned about creating a successful business after studying over 30,000 pitches:

1. Turn your problems into opportunities

Whether you're looking to create your own company or pitch an idea at your workplace, always be your own customer, says Wise.

"Companies led by founders that are also their own customer do better," he says. "By being your own customer, you gain access and insight."

If you can't be the customer, then it's also vital to understand how your customer's mind works.

A student musician will best be able to understand what issues student musicians face, he says, and a single father will best be able to explain what issues other single fathers face.

"Look at a problem in your own life," says Wise. "How do you turn it into an opportunity?"

Having this problem-solving mindset, he says, will help you be successful in any field.

2. Focus on the need you're filling

The order for putting an idea into fruition used to be "ready, aim, fire," says Wise. Now, it's ready, fire then aim.

Wise says that you no longer have to have all of your ducks in a row before creating a product. Years ago, you'd first find an investor, get funding, create a prototype, do a launch and then go to sale.

"Now, that's a huge mistake," says Wise. Instead, it's better to find the customer, connect with the market need and then launch the service or product.

"Kickstarter is a great example of that," he says. In fact, he says people committed more than $692 million in 2015 through the crowdfunding platform to products that were not yet built.

"Now you can find a community to fund your business idea," says Wise.

3. Fund your idea yourself

If you truly believe in your idea, fund it yourself, says Wise. "There are no gatekeepers anymore," he adds. "You don't need an investor. You actually don't need much money to start anymore."

In the past, you'd need about $500,000 to fund an idea, he says. In 2017, the most you really need is $5,000. Even if you don't have the cash right away, he says, if your idea is good enough you can put it on a credit card. In fact, he notes that that's how YouTube got started.

"Use that money to start the idea, have it go big then go back to investors," he says. "Also, you don't need to quit your job right away."

4. Figure out the value

Your boss, your CEO or your potential investor doesn't care about your idea, says Wise.

It could be the most well-thought-out idea and their only question for you will be: Why does this matter and who cares?

That's why it's important to always pinpoint the value proposition of whatever concept it is that you're trying to pitch, says Wise.

By focusing on the value from the onset, he says, you can easily show whomever is on the receiving end how supporting the idea benefits them.

5. Get your evidence lined up

In business, traction is proof that your products, service or idea will actually be of financial gain. Investors want to know that your financial projections are not just a dream before they throw in money, says Wise.

The same thing goes for the office. Your boss will want proof that your idea will boost the company in some way before getting behind it. That's why it's so important to start off, by knowing your customer base, says Wise.

Investors will go off on a tirade about why an idea will never work and then be shown 10,000 orders of a purchase and immediately be on board, says the venture capitalist.

Why? Because no matter if it's your manager or an investor, "the best ones realize that they don't know anything. The customers do," says Wise. "Traction beats everything."

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See also:

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This story has been updated.