Spent my career on the other side learning what corporates, VCs, government agencies, and consultants like/don't like when evaluating startups, concept proposals, grant proposals, and strategic partnerships.
I've worked with innovation teams at Fortune 1000's, government agencies, academics, VCs, etc. and evaluated 100's of startups/concept proposals as a tech scout. Hear the lessons learned about what these teams look for, key items to watch for, and nuances for working with these organizations.
One of the biggest challenges I see is a rush to action, when additional time to further develop, test, and receive buy in on a concept would address may late stage issues, such as lack of interest in your solution or challenges integrating the solution with the status quo. Let's talk about how adoption or adaptation of lean startup-type methodologies can be applied to strategically address late-stage solution killers early in your planning process.
I lead a team monitoring and analyzing the landscape of bio-based materials and chemicals, with some overlap in the spaces of alternative fuels, the broader bioeconomy (e.g., feedstock issues), end of life issues, and sustainability questions.
My perspective may be a bit different, since I'd evaluate your business as someone looking for partnership opportunities for large commercial players or solid proposals for funding agencies. While I fully agree with Donald Irion that value proposition is the big question, I'd actually recommend taking a step back, listing out your hypotheses, and doing some customer discovery in your target market. The hypotheses most relevant will depend on what you've already done in your concept work, so it's a bit hard to get specific. It could be starting off with the hypothesis that your customer has the problem you think they do. Or perhaps the hypothesis that the other player is already meeting the customer need. Perhaps its that the market need is so large both parties have room. Capture as many as you can, then structure an investigation to test them. If you're getting data from your customers, it should go a long way to buying-down your concerns and should support a well thought out discussion of what an investor should think of the other player. Fortunately, there's a lot of advice on the topic either online or through one of the mentors here. If at any point you have further questions or want to use me as a sounding board, I'm more than happy to help. Just let me know.
Having advised and worked on innovation teams, I can say that there is no one best way to tackle this challenge. Every company seems to have its own approach and there are a lot of schools of thought on how to best navigate some of the common challenges. If I had to choose, I'd probably say my top three high-level recommendations are 1) outline a clear strategy for the team, 2) ensure there is a strong commitment from management, and 3) be proactive about removing roadblocks to executing the team's strategy. It may sound overly simplistic, but developing a solid foundation will help clear the path so the team can focus on the big challenges they face: finding the right innovation to test and securing the buy-in to move it forward.
As someone that's worked at various stages of the early stage innovation funnel, I can attest that there are a lot of decisions made with limited data. Ambiguity is simply the nature of the business. However, I would argue that gut feelings should be used sparingly. There may be cases where gut feelings come into play. One area might be during an interview when you're trying determine whether or not a candidate will mesh well with the team. But in those cases I'd simply use the gut feeling as one data point. What I'd recommend is considering the decision as a rational call about what risks you are willing to take. In a lot of cases, you won't have the data to buy-down the risks so it'll be assessing scenarios to see what could happen, both good and bad. It may not give you a clear "right" answer, but you'll at least you be able to weigh the pros and cons so you can make an informed decision about what path best fits your goals, strategy, and risk tolerance. How one does that is a whole other can of worms, but it's a fun discussion to have and I'm happy to chat more if you'd like.