I recently had the privilege of presenting an opening speech at Startup Weekend. In my mind, there’s nothing more important for entrepreneurs to learn than how to pitch their idea.
The problem is, most pitches suck.
They’re boring. They’re incoherent. They’re not compelling. Confession: many of my pitches have sucked over the years but fortunately I’ve had some great coaches and teachers who have helped me be less terrible at pitching.
I see it as my civic obligation to the entrepreneurial community to share the lessons I’ve learned the hard way. What follows is a summary of the points I covered in my presentation. If you have a business idea – new or old – that you’re pitching to customers, investors, partners, potential employees, or anyone else who *should* care about your business, I encourage you to take heed of the following five points.
To make this even easier, I’ve uploaded a copy of my presentation on Slideshare. You can view it by CLICKING HERE. I encourage you to open the presentation now and read it side by side with this post. To make it even easier, I’ve even included page numbers as tracking for following along as you read this post.
So here goes – here’s how to not suck at pitching.
(slide 2) My perspectives on pitching are informed by my time in corporate America as well as through my entrepreneurial ventures like thoughtLEADERS, my book One Piece of Paper (which you can get now – CLICK HERE), weBuild (a web/mobile accelerator), TiXiT (a ticket discounting company), SimpleMile (a mileage tracking application for Android), FreakJet (a humor site for airport people watching), and my membership in the Ohio TechAngel fund (the largest angel fund in the U.S.).
(slide 3) There are five things you must keep in mind when pitching. You have to cover the problem, your solution, how you’ll make money, how you’ll build a defensible business, and how you’ll ultimately exit the business. Miss any of these (especially those first three) and it’s guaranteed your pitch will fall flat.
(slide 4) When you define the problem, make sure it’s a REAL problem. I see way too many pitches where the solution is put first and the problem isn’t real or compelling. No problem – no business. It’s that simple.
(slide 5) The solution is why we’re all here. Many of us get so excited about the solution that we devolve into speaking about it in great detail. Don’t. Customers and investors don’t care if you’re using python, ruby, php, html, widgets, blidgets, or anything else I’m incapable of explaining. The black box you build is a gimme. What you MUST articulate is how that black box changes a business process and delivers impact. Speak plainly.
(slide 6) Cash matters. No bucks – no business. And make sure your revenue model makes sense and is compelling. Gone are the days of “we’ll make billions on AdWords.” You won’t. Trust me on this. It’s beer money. You need a real revenue model that can support any and all costs you incur trying to generate said revenue. And build your projections from the bottom up. None of this “it’s a gajillion dollar market so we need like one basis point of share and we’ll retire.” You need bottoms-up estimates of your financials if you want investors to see you as credible.
(slide 7) People want to take your crap – especially if they see you being successful. You must defend what you build or your business goes poof. Anyone looking to put money into your business or any business looking to do business with you wants to ensure you’ll be around long enough either to get their return on investment or that you’re around to support their business. Clearly articulate your points of defensibility.
(slide 8 ) You must consider the exit. If you seek outside investment, they’ll want to see a liquidity event so they know how they’ll earn their return. And by the way – IPOs are dead for now. It’ll most likely be an acquisition (which is a good thing for you). You must be able to explain how and when you think you’ll exit. If you can’t, don’t inspect investors to belly up to the bar.
(slide 9) I’ve heard plenty of silly little things that, even if you absolutely nail the above five points, will tube your pitch. IPO? Um no. Control? Face facts founders – you’ve lost control of your business the day you started it. It’s merely a question of when that will happen. And you’re *always* raising cash if you have any intent of growing your business over time. Lastly, EVERYONE has competitors. Stating otherwise is naive and facile. I don’t want to invest in someone who is blind to the competition because it’s pretty much guaranteed that their competition will blindside them and destroy them.
(slide 10) So there you have it – five things you must do to ensure your pitch doesn’t suck. This doesn’t guarantee you’ll have a great pitch. All it does is reduce the odds that you’ll have a crappy one. I invite you to take a look at some of the ventures I’ve launched or am involved in. I’m passionate about all of them and yes – my colleagues and I can clearly articulate all five of the above points for every one of those ventures. I challenge you to do the same for yours.
Last week my new book, One Piece of Paper: The Simple Approach to Powerful Personal Leadership was released on Kindle (and the hard copy is now available for purchase). You can get your Kindle version here. The book will guide you through generating your own set of powerful leadership stories.