CREATING A PITCH IS AN ITERATIVE PROCESS
- Build your pitch
- Say it out loud to others as much as possible
- Incorporate input and refine
One of the most important things you will do as a startup founder is build your pitch. You will tell it so many times to so many investors, customers, partners and friends that you just won’t care anymore. However each time, it’s your brand, and you want it to be clear and simple.
A mistake that’s often made by founders is describing the idea “correctly”. In the founder’s head, the pitch describes the business, and if an investor doesn’t understand, it’s because “they just don’t get it, they just need to discuss it more in-depth to really get it.”
Sounds reasonable – but it doesn’t work like that.
Most of the time, you’ll only get one chance with that individual before they make up their mind about you. If your pitch is too complicated, you need to refine it to something clear and easy to understand, so that your listener can decide if it’s something they even want to hear more about.
And what’s the easiest way to get it to that point? Practice, practice, practice, in front of as many people as possible, and incorporate their feedback. (Ask them to be mean!)
THE STRUCTURE OF AN ELEVATOR PITCH
Note that there will be many different circumstances in which you’ll give your pitch. Brief 15-sec introductions in large groups, 90-sec pitches to investors, even ACTUALLY GETTING STUCK IN AN ELEVATOR (happened to one of the Betaspring teams this year).
You want to have the key to your business boiled down to as few words as possible, and have some backup in case people want you to go further. Each bullet below should be very concise, generally not more than one or two sentences.
Your pitch should include:
- The Problem
- The Solution
- Your Differentiator
- Illustrate size of the opportunity
- Your progress
…and be prepared for the follow-up questions you’re typically asked.
Note that the first three points make up the barest version of your pitch. You’ll likely give many pitches at this length, for example when a room full of entrepreneurs are quickly introducing themselves. However, it’s very good to add the next few pieces if you have the opportunity, especially if you’re speaking to an investor.
And finally – do not just recite your pitch! If you’re not excited NO ONE will be!
The reality is, you will get tired of delivering your pitch. But whether it’s the 10th or 10,000th pitch, it should be delivered with the same energy every time. Show people that you are genuinely excited by your business!
The most important question a listener will have is “why do I care”? Even if you have an amazing product, it’s pretty clear that before your pitch, the listener is isn’t just sitting there, thinking about how much they need your product – you need to get them in this mindset.
A common way to describe the types of problems that a startup can solve are Vitamins, Advil and Morphine:
- Vitamins – Your customer doesn’t need this or know they need this yet. (E.g. Foursquare – Still arguable if this is useful, but has a huge audience)
- Advil – Customer has a mild pain point, your product helps. (E.g. iPod – Couldn’t carry all your CDs)
- Morphine – Customer has a major point, you solve. (E.g. mobile phone – people needed to communicate outside of home/office)
The takeaway here is – you want your product to be morphine (or at least feel like it). The best effect is for your listener to have a strong emotional reaction and think “I WISH someone would DO something about that!”
Where I may diverge from the norm is that I believe in some cases, you should prepare different pain points for different audiences. As an example, the VC you’re speaking to may not “like, totally hate it when he can’t post his class notes to just his boys on his tumblr”, but will understand how painful it is when he can’t send a powerpoint deck to the LPs invested in his fund.
This is where you state your product. It seems like the most straightforward piece of the pitch, but it’s often a mess.
It should take one sentence, maybe two, and it should extremely briefly answer 1) what you are and 2) so what – how does it solve the problem?
Common Issues include:
Forgetting to describe what your product actually does – You illustrate the problem and what needs to be solved, but don’t actually say how your product solves it
- Example: “Today, we are connected by social networks, but not in the XYZ space. We make XYZ more social by adding augmented reality.”
- Any listener would want to know: “How?”
- And since augmented reality is relatively nascent, you may have to explain this from scratch – using jargon doesn’t usually help
- Better: “We provide an immersive social check-in experience for bars and restaurants. Leave a message or picture at a bar that only your friends can see using our app, and treat the wall of the bar like a Facebook Wall.”
- This includes a brief description, an example, and to clarify, an analogy to a successful product almost everyone will know
- This product may work in a much wider range of places, but this is the initial target market, and people can quickly relate
Getting into the details – Though most venture investors are intelligent, they may not know anything about your product or market. You should describe your product so that anyone can understand – a customer, a referrer, a non-technical investor, etc.
- Example: “We perform XYZ analysis on ABC servers using the 123 algorithm, originally described by JKL. Our servers are optimized to run this algorithm more quickly than any other current provider of this software, given our use of multithreading and load-balancing.”
- Better: “We provide the world’s most powerful software to analyze the servers used by large companies like XYZ and ABC, created in partnership with the lead researcher on Google’s proprietary server analysis system.”
Saying “we’re going to…” – It doesn’t matter if you haven’t finished building it yet, tell people what your business is, get them interested. Of course, be honest about progress, but capture your audience’s imagination first, then discuss milestones and progress.
Even if people feel the pain of the problem, and understand that you’re building the solution, there are always competitors. Listeners will want to know why they should use your product, and investors will want to know why you can do well despite those competitors.
You can do this in one sentence, e.g. “no other company has feature XYZ, or works as quickly”, but it’s going to be very dependent on your company’s “special sauce”.
ILLUSTRATE HOW LARGE THE OPPORTUNITY IS
This is more for the investors you may be pitching.
Give them a qualitative or quantitative reason why they should believe the market is huge. Make sure you keep it very simple, and don’t use numbers if you can describe it in a more digestible way. E.g. “There are more [our market] than [other, related, obviously huge market]”.
For example, knowing that there are 100 million diabetics in the world is not a helpful stat to show someone how much your product-for-diabetics is worth. Knowing that diabetics in the US spend more than $3B on the treatment your product is rendering obsolete is much more useful.
Keep this section short and sweet, and use numbers that i) are believable, ii) you can back up, and iii) very clearly illustrate the size of YOUR opportunity.
If you’ve even got an alpha version of your product duct-taped together, it’s still farther than most people who’ve had the same idea, and you should make an investor aware of this.
Be careful, however, of making promises around specific future milestones. If you’re a technology company, be careful about promising a feature launch in X weeks, because you may find one last issue you want to fix, and don’t want to overpromise and underdeliver as your first impression.
HAVE THE KEY QUESTIONS IN YOUR BACK POCKET
As you practice your pitch, you’ll find that there are always a few common follow-up questions.
Typical examples include:
- How will you scale?
- How will you acquire customers?
- Why will people pay you for that?
There are a huge number of questions you’ll have to answer eventually, but there will always be a few that most people ask first about your specific business. Make sure you have these prepared clearly and concisely, so you don’t end up with an “umm…” that could hurt your credibility and easily be prevented.
With these pieces in place, you’re on your way to solid pitch. To make it perfect, don’t forget to constantly SHARE and REFINE!