Many entrepreneurs often fall into the trap of trying to catch the wave of a current hype because they mistakenly think it will automatically capture the interest of an investor. It’s a bad idea.

Some time back, an entrepreneur came to my office seeking advice on an investor presentation he was creating to pitch his idea to investors. While the basic idea has been around for years now, his implementation is unique (which I won’t divulge). At any rate, the general idea is quite compelling.

It is a Medical IT application that would enable primary care physicians to more easily share patient information with other doctors and specialists. By eliminating the prevailing practice of doctors sending paper copies of patient files to a specialist where the same information is usually retyped, this application has the potential to reduce errors and maybe even save lives.

He went on to explain that if this was standardized (as the medical community was asking), it could also be used to share medical data with the patient’s insurance company. This would reduce the time to approve procedures and at the same time eliminate the paperwork swamping insurance companies. “Looks like a win-win for everyone,” I thought.

And then he said, “and then we are going to put in an interface for social networks like MySpace and Facebook.”

Huh?

If he were presenting to an investor, he just basically kissed his credibility goodbye.

With all the concern about privacy, social networks are clearly not the place to be sharing medical information. Everyone knows this. Investors will wonder just how well this entrepreneur really knows his market if he doesn’t know this!

As you are building your pitch to investors, be very wary of falling into the trap of latching on to the current hype. Instead, make sure you do your homework and know everything there is to know about your target market, and then hone your pitch around your core value proposition to this market.

In the end, investors won’t fund your idea simply because it is somehow part of a new movement. First and foremost, investors invest in people — credibility counts for way more than any hype.

© Eye on Startups & The Startup Guidebook