If you’re like a lot of aspiring entrepreneurs, you dream of the day when you meet with a respected investor, deliver a knockout pitch, and an investment is immediately made in your company. That’s a great story-line, but there’s a 99% chance that your reality will look a little different.
Many startups have the opportunity to pitch very early on − even before you’re ready for investors. Press and marketing creates buzz and helps to get you on the map, so it’s important for start-ups to take advantage of these early opportunities. There are a lot of resources out there for how to pitch an investor (my personal favorite is Chris Sacca schooling a budding entrepreneur in the Startup Podcast), but it’s important to know that there is a big difference between pitching an investor and pitching at start-up weekend or at an early-stage general demo day.
When you are meeting with an investor, your ultimate goals are to:
Determine if you want this investor to be part of your company
If yes, convince the investor to put dollars & energy into your company
Contrast this with your goals when you are pitching at a Startup Weekend or a community pitch night before you’re ready for investment. In this scenario your goals are to:
Get the community excited and engaged
Drip positive data points on potential investors, either directly or indirectly
Let me explain the indirect piece. I’ve had the pleasure of seeing hundreds of start-up pitches over the years. I’ve been a judge for a lot of pitch competitions and events ranging from Startup Weekends to Demo Days to Community Pitch Nights. I’ve given my own start-up pitches, participated in Google for Entrepreneurs Demo Day at Google Ventures, and hosted multiple events in Detroit. Despite not being an investor myself, I have strongly advocated for companies to investors and made many connections that have led to investment.
One question I get from investors and accelerators all the time is,
“Do you know of any good new companies that should be on our radar?”
This question (which I get 4-5 times each month) and my response, is your first moment of truth resulting from Startup Weekend. And while a positive data-point is a long way from a happy investment marriage, it is a meaningful step –equivalent to a good day of practice leading up to Saturday’s big game.
A good day of practice positions you for long-term success and stack the deck in your favor prior to the big game. Think about it for a minute – the connectors (judges, coaches, attendees) want to help their investor and accelerator friends, and often take pride in understanding the pulse of the local startup ecosystem. Knowing good young start-ups is a win for the connectors.
Investors love knowing strong emerging start-ups in the area to track their progress before it’s time to invest. It makes it easier to invest when you’ve seen the entrepreneur display a positive track record. Win for investors.
And you, the entrepreneur, benefit because you can walk into a meeting with a warm introduction and people already having a positive perspective of you. Win for you. This is excellent news for the whole start-up ecosystem and that’s true whether it’s Detroit, Denver, or Dallas. Good company, good investment, good community.
So – here’s your chance to start something great and my recommendations for making your pitch great:
1. Share your vision
Get people excited about the world you will create. Be bold with your vision & share how it’s truly going to solve a problem or markedly improve the lives of your customers. One thing that’s underutilized in early-stage pitches is how your a startup will impact the life of a specific single user. In other words, show me how Hamza and his family have their life changed by using your product, don’t just tell me you’ll impact African youth. Most pitches include a market size slide, which works, but I prefer to see the big vision and allow the market size to become readily apparent thanks to your vision.
2. Pick a Customer Base. Pick a Segment
Now that you’ve shared a great vision, it’s time to focus on one single customer segment & share how you’ll do scalable and non-scalable things to get your business off the ground. Don’t tell me how you’ll be everything to everyone. In the spirit of Paul Graham, tell me how you’ll be loved by a small number of customers rather than liked by a lot.
gathrd, Detroit’s 2nd place winner at Start-up Weekend, did a great job of this, sharing their plan to acquire customers by getting scrappy & creating buzz for a handful of specific upcoming conferences. The gathrd app could work for any gathering of people, but instead of sharing the 10 different types of events where their product would be effective, they made a clear choice and selected conferences as the starting point – plus shared a compelling plan for obtaining users. Decisiveness is a key part of creating a culture of discipline at your start-up & you can read lots more about that in an earlier post about injecting discipline in your start-up.
3. Pick a revenue stream and be clear about it
One common mistake that I see is people sharing five different revenue streams and picking and choosing how you talk about your business based on who you’re talking with. Having a vision for different revenue models is fine, but start with one clear revenue source and execute like mad.
As I shared with an aspiring mentorship platform start-up, don’t try to create both a B2C business and a B2B business. If the biggest market need and your biggest market advantage is around B2B, then go create a really strong B2B business rather than trying to serve both markets.
Or, as I shared with a company providing sports training, don’t focus on creating paid workouts & on-demand coaching. Focus on one revenue stream rather than trying to serve two different masters. If you can tell me who will pay you & how you’ll make them very happy to pay you for your product, you’re off to a good start.
Or….tell me you don’t care about revenue and instead focus on user acquisition. User acquisition is a perfectly acceptable strategy, but when you choose this path be sure the market is huge and there’s a really big opportunity.
Regardless, be clear about your focus & communicate the difference between your vision and where you’ll be investing everything you have to execute tomorrow.
4. Have One Presenter
Assuming you want to win the competition, pick the best person on your team to deliver the pitch and have that person deliver the pitch. Your presenter should be confident, calm under pressure, and have a natural likability trait. You will typically have approximately five minutes for your pitch, so don’t waste precious seconds with awkward transitions or treating your business like a 2nd grade YMCA basketball team. Everyone is an equal team member, but not everyone gets equal airtime at the pitch.
Questions should be answered by the person who knows the most about the question & is comfortable speaking, not necessarily the same individual who delivered the pitch. The presenter isn’t necessarily the person to answer all the questions
5. Explain your unfair advantage
One sure fire way to get the community excited about your budding business is to have it started by an industry expert that truly understands the customers, the problem, and the market. Industry experts truly know the market and generally know when a problem hasn’t been solved in an effective manner. If you have an industry expert, be sure to emphasize that in your pitch.
Not an expert? No problem – just be sure to talk about why you’re better suited to address the problem than an existing product, platform, or service. If you want to enhance professional networking online, you better be able to tell me how you’ll offer a better solution than LinkedIn.
6. Display commitment to growing the business
This one is largely targeted towards Start-up Weekend participants, but truly applies to anyone bootstrapping a start-up in their nights and weekends like my friend Aaron (more on Aaron in a minute). Everyone wants to be part of the success of a start-up and if you don’t make an explicit commitment to keep going with your business the odds are you’ll close down the business 56 hours after its formation. Needless to say, non-existent businesses are not exciting to most people.
Is your team committed to taking a week off & working on your newly formed business? Share that with the judges. Meeting every Tuesday & Thursday with the team from 5pm – 2am going forward? Share that. Remember: ideas are a commodity and execution is everything. Judges and community members are looking clues to prove you’re committed. Go ahead…give the people what they want.
Back to my friend Aaron. Aaron has an emerging start-up and he’s invested $50,000 of his own money to date. The product has received real traction, but it still needs more development and more dollars before he’ll really know if he’s onto something and be able to scale. His plan? Work for 6 more months as a management consultant to bankroll the additional development while pushing forward all the non-dev needs in his nights & weekends. While you may not have the luxury of falling back into a consulting gig, we can all live frugally and put all our energy and dollars into our dream. If you’re not putting everything you have into your business, you’re in trouble.
7. A little humility goes a long way
I know, I know, I know….it’s tough to admit, but you don’t have all the answers. Really, you don’t. To create something great, you’ll need a lot of help along the way and this is exactly why investors and leaders are looking for entrepreneurs that are humble and coachable. Be sure this comes across in your pitch.
Confidence is good, but there’s a fine line between supreme confidence and not being coachable. To be sure you’re perceived as falling on the correct side of this fine line, it never hurts to find a way to poke fun of yourself or share that you don’t have all the answers.
8. Focus your message on what you have done, not what you chose not to do
You have 5 minutes to pitch, so don’t waste time telling us what you chose not to do or why you really wish you had built out something else. We want to know what you have accomplished and why you chose to focus. Creating a single strong feature is a lot better than creating three half-baked features. Don’t apologize, explicitly or implicitly, for focusing on certain parts of your product or business. Embrace your focus and tell us how you’ll build on what you’ve done in the future to make amazing things.
9. Design matters
My old civil engineering structures professor, Rigoberto Burgueño, taught me that it doesn’t matter how great your engineering work may be if it looks sloppy; clients don’t trust sloppy results.
Rigoberto’s principles hold for pitch competitions as well. Do whatever you can to have a solid designer on your team & be sure to create a visually appealing presentation. Remember, you want people to believe that you can execute across everything you do…not just areas where you’re comfortable.
Work to score a designer on your team and remember that a small number of beautiful slides trump lots of okay slides. No designer? Take a few minutes to at least download clean PowerPoint templates to show you value attention to detail.
10. Create an MVP. Do something
Bust your butt to create something truly compelling over the weekend. Don’t settle for wire-frames – create something real. Detroit’s recent Start-Up Weekend champion, Magic Book, an augmented reality app for children’s books, created dancing beasts coming off a single page to make kid’s experience reading Where the Wild Things Are interactive and unique. By creating a compelling technical product over the course of a weekend, Magic Book proved to me and the other judges they can execute and deliver.
In the start-up world, talk is cheap & execution is worshiped. Judges want you to show us what you’ve built in a short period of time. Whether you’ve had a few months to work on things or just the weekend, remember that you’re getting a rare opportunity to show what you can do. It’s your time to shine – don’t short-change yourself.
Now…go get your pitch on.