You would be shocked at how few entrepreneurs—even the best ones—have a clear understanding of how to answer this question (or have even thought about it).
Most great startups are best in the world at something, even if that something isn’t big at first. Think about recent success stories: Instagram, Facebook, Zynga, and so on. Each one was clearly best in the world at something very specific.
In my hometown of Seattle, multiple startups can claim they are best in the world at something. If you want to buy a home and plan to utilize the best online resources, Redfin is best in the world at that. If you are a mom and want to find a good deal on clothes or a stroller, Zulily is better than anyone else. Tableau is best in the world at helping you to visualize big data. Apptio is better than anyone at helping CIOs manage the cost of their exploding IT infrastructure. Decide is the best in the world at telling you whether the price of what you are thinking of buying will go up or down in the future.
I don’t think you need to be best in the world to have a good business. You can be profitable and successful by just being good at something. To grow a billion-dollar business, though, you need to be the best.
When I give pitch advice to entrepreneurs, I focus on this best-in-the-world point. Tell me what you are (going to be) best in the world at up front and why that’s important. If you are successful at convincing an investor, angel or VC, that you can be better than anyone else at something, you are likely coming back for a second meeting. More importantly, if you figure out what you’re truly best at, you are on your way to building something truly meaningful.