If you’ve ever seen me speak at an event, you have probably noticed that I get very excited and passionate about pitching. There’s an excellent reason for that. I believe that a great pitch is useful in so many walks of business. As the CEO of a company, you’ll be pitching your startup morning, noon and night. Short, 90-second elevator pitches. Three- to six-minute pitches as part of a demo day or a pitch competition. And finally, the Holy Grail: in a VC’s office, for a 30- to 60-minute explanation of what the future looks like, if you have anything to do about it. Becoming a truly great pitch artist takes a lot of practice, which I encourage you to invest time in. But that doesn’t mean that there’s any excuse for having a downright poor pitch.
First things first, what is a pitch? In my mind, it’s a narrative that ends in a specific call to action. You’re pitching because you want something from someone. Maybe you want their advice, their business or (in the context we’ll be focusing on here) their investment. Whatever you’ll be pitching for in the future, know that you’ve done many pitches for your business already. You probably pitched your friends, family and significant other to convince them that this crazy startup thing you’re about to embark on was a good idea. Maybe you pitched your old boss to let you work part time, or when you told him or her you were considering quitting your job.
The “call to action” part of the pitch is extremely important. If you’re including stuff in your pitch that doesn’t help build the case for your call to action, you should absolutely scrub it from the script. For example, a 90-second elevator pitch has the same purpose as the introductions we talked about in Chapter 28. The idea is to get a meeting. You don’t get a meeting by speaking extra fast and loading tons and tons of information into your pitch. You’re not trying to explain everything; you’re trying to share enough information to pique their curiosity and make them want to learn more.
Most pitches take place on a stage, of sorts. Not always a literal stage, but a stage nonetheless. Like everything delivered from a stage, your pitch is a performance. If your business is the most innovative thing on stage that day but you’re staring at your shoes, mumbling and reading from the slides… guess who won’t be getting a phone call.
As your company grows and evolves, you’ll probably get to do a number of three-minute pitches, as part of accelerator demo days, pitch competitions, and so on. The goal here is the same: get that meeting. But there are also a couple of other objectives. If you are part of a large, well-known accelerator, you’re probably a great startup, but you have a problem: you will be pitching alongside dozens, if not a hundred, other startups. They’ve all been prepped well. They all need to raise money. That means your goal changes: out of the hundreds of pitches your audience will sit through, you need to stand out enough that you’re remembered. When the investors go home at the end of the day, their notepads will have a ton of notes scribbled down on them. Your goal is to ensure that there’s a circle around your company’s name, and a dollar sign in the margin.
Think of every pitch you do as a competition. You’re pitching to win the grand prize in a competitive field. That means you need to be rehearsed, prepared, well rested and ready for battle. The prize, by the way? Yeah, that’s that meeting we were talking about. It is a little bit like winning a hot-dog eating competition, only to learn that the prize is a jumbo-sized hot dog, but trust me: it’s worth it. The meeting will include another pitch, this time about 20 minutes in length. If they like what they’re hearing and if there’s a good back-and-forth happening, the meeting will stretch to an hour.
So, what goes into the pitch, any pitch? First of all, you need to capture your audience’s attention. They have their phones in their hand, and they are probably checking Twitter and reading emails as they watch your pitch. If they hear something interesting halfway through your pitch and decide to start paying attention, they won’t have heard anything up to that point. That sucks for you, but it’s the reality of things. So, you need to lead with the one thing that will get their attention. The single most important part of your presentation: traction. How well is your company doing? How many users do you have? How fast are you growing? How much revenue are you generating? If your numbers are good, chances are that the investors will pay attention, even if they’re not immediately interested in your space. If someone is pitching something that is consistently growing at 50 percent per week, I’m reaching for my checkbook, and you can explain to me what it is later. It’s that simple.
The next part of your pitch is what your company is about. Who is your customer, and what is the problem you are solving? This is important because if I don’t know those two things, I don’t have any context for evaluating the company. As I discussed in Chapter 20, it’s much easier to start with a very focused customer. Make them obsessed about the product, and expand from there. In other words: it is a far better story to say that a third of people in San Francisco use your product and that you have a plan for scaling it to the rest of the world, rather than saying that 200,000 people use your product worldwide. The absolute numbers might be the same, but the implication and the story are vastly different. There is no shame to limiting your user base geographically, or to a more narrowly focused market, but make sure you explain that as part of your presentation.
Okay, we’ve now checked off your traction and the market, and explained why the problem is important to the users. Next, consider exploring how the problem is currently being solved. It is unlikely that you came along and found a completely new market. Uber didn’t invent transportation; they just looked at the taxi industry and thought, “You know what? That’s terrible, we can do better.” In explaining how customers are currently solving these problem, you are helping illustrate that it is worth solving. If nobody is experiencing the problem you have a solution for, I have some bad news for you: you don’t have a business. The same goes for competitors, by the way. If you don’t have any, it means there is no problem, there’s no market and you don’t have a business.
If your presentation has gone well up to this point, the audience is at the edge of their seats. They know the market, they feel the problem and now they are eager to hear how you’re going to solve this problem. Explain how your solution is perfect for the task at hand. I like to compare painkillers to vitamins: if your solution is something that’s nice to have that people can’t be bothered restocking when they run out, you are facing a challenge. Conversely, when my Advil bottle is half empty, you’d better believe I’ll be stopping at a pharmacy on my way home. Be Advil, not vitamins, and make sure that your audience knows it.
Trust me, everything I’ve explained above can be done in 90 seconds. For presentations where you have more than just a quick elevator ride worth of time, hit the audience with the how. If you have 20 minutes, it’s time for a live demo. If the clock is running out, a few screen shots do the trick. Either way, the investors want to know exactly how you’re going to deliver on your promises.
Next, it’s time to explain what your business model is. How are you going to attract new customers and how is your company going to make money? How will you find new customers, how much does it cost and how long does it take? How soon will you break even on them? How much revenue will they bring your company over their lifetime? And now that we understand the total market size and your business model, provide some summary financials. How much money will you be making in three years? How big will your team need to be then?
Something your investors will definitely want to learn more about is your management team. As investors, they are about to place a sizable bet on your company. They need to be convinced that the people in the company know what they are doing and have the capacity to deliver. If you and your team have built companies and exited them before, brag about it. If you used to work at Budweiser, and you’re about to launch a product that makes selling more beer easier, make that clear. If you are the foremost expert in the world on something and you have a doctorate to prove it, shout it from the rooftops. I wouldn’t spend too much time on this in short pitches, but if you have a little bit more time, do so. Remember, your company’s chance of success will be guesstimated based on your traction and your team. Ideas are cheap, execution is everything. This part of your pitch is where you explain to your audience that you have the right team to execute your idea. If there’s even the slightest doubt in your mind that you have the right team, then stop pitching and start hiring.
Right. That’s it for your pitch, except the most important part: closing the deal. A great way to end your pitch is to restate why you’re there. “We have some really smart tech that will change the way you order groceries, and the best, most experienced team in the business. We are raising $2 million. My details are on the screen, please email me to find out more.” Perfect, clean and to-the-point.
For the pitching itself, I want to briefly talk about body language. I strongly recommend getting some one-to-one training with a pitch coach. This is part of the package in an accelerator, but even if you haven’t gone through an accelerator program (yet), try to find someone who can see you in action and give you some pointers. Exuding confidence, planting your feet solidly on the ground, projecting your voice well and working on having eye contact with your audience is crucial and not that difficult to master. All it takes is some practice.
A few investors will ask you to send them your slides before you pitch to them, which is a little bit awkward. If you’ve ever seen a very good presentation, you realize that the slides are there to help set the pace and to illustrate what the presenter is saying. It doesn’t tell the full story. If you send the slide deck to your investors, they probably won’t understand what the deal is, so I typically recommending saving it for the meeting. One way around this issue (worth considering especially if you are based geographically far away from potential investors) is to prepare two slide decks. One is your normal deck for presenting, the other is an executive summary designed for reading and getting a feel for what you’re about to present.
Albert Einstein once said, “If you can’t explain it simply, you don’t understand it well enough.” Bear that in mind; if you can’t explain your company to a room full of investors who may not be experts on your market segment, go back to the drawing board.