BMC Part Seventeen: Pitching
Now that you have a business model that you’re proud of, how do you persuade others to support you?
I love working with social entrepreneurs, who bring a passionate blend of data, impact, business acumen and startup hustle.
They’re also terrible at pitching their ideas to investors.
Not because they don’t have enough to talk about, but because they “bury the lede” and go into way too much detail.
Too often we bombard our audience with information, and in the wrong order too.
Here are some tricks for creative a nice narrative that will win over your investors, and help grow your enterprise.
It’s Not That Complicated
Everybody should be able to describe their model in under three sentences.
You’re looking for a quick story that highlights the customer, their problem, your solution, and why they’ll love you.
Here’s a great template:
“You know how ____(group)__________ need/want to ___________.
Well we ______(action)____________ which can help ___________.
That means ______(end result)_______________________________.”
Lessons From Shark Tank
There’s a lot to be learnt from the successful entrepreneurs on Shark Tank. We can identify three rounds of questions from the Sharks, which occur in a specific order:
1. The Sharks want to understand what business you’re in. We need to start by describing what industry we’re in, who we’re selling to, and why our customers are interested. Only after those topics have been addressed can we get specific about our social impact
2. The Sharks want to see that you know the important numbers. This means we need to have a good grasp on costs, prices, margins and breakeven volumes. The Sharks might have differing opinions about your choices, but it’s vital that you at least have answers to their basic questions.
3. Finally, the Sharks are deciding whether or not they can participate. They ask about the entrepreneur’s vision for the future, and ask some “What If?” questions. This can only happen once they have a clear understanding of how your model works and how your financials are structured. No surplus = no business.
It’s probably not a good idea to stand up the front of the room and show everyone your full Canvas.
Instead, we’ll use the flow of the canvas to guide our conversation, providing just enough detail about each component of the business without getting bogged down.
I’d suggest the following order:
Context / Problem: What is currently missing from the world?
Your solution: What type of business you’re operating. You’d be stunned at how many people only touch on this at the end.
Identifying Customers and Value Propositions
Identifying how the back end of the business is structured
High level financial metrics: cost per unit, revenue per unit, margins, breakeven points
Impact: who you help, how it fits with the rest of the model, impact targets.
Success so far: Testing, pre-orders, current sales, etc.
Plans for the future: Opportunities for growth.
The team: Who are you and why should your audience like you?
Call to action: What do you want your audience to do now?
Some Final Notes
The three rules of public speaking - Be interesting, be interesting, be interesting.
As soon as you’re at the front of the room, you have to earn the audience’s attention. Attention is not a given, especially when everyone has a phone and a stack of emails to think about.
Why would you want to present a dull pitch to a room of glazed-over eyes?
Your pitch should change depending on your audience.
The content might not change, but the emphasis and proportions should be tailored. If you have investors, focus on market validation and the financials. For customers, focus on the value proposition. For partners, focus on growth and mutual benefits.
By knowing who is in the room, you avoid putting your foot in it, or wasting an opportunity.
You’re going to get questions, and that’s good.
No questions = the audience zoned out.
Start thinking about what the logical/common questions will be, and construct some responses.
You don’t want to be surprised by a basic question, and you’ll give a much better answer if you’ve thought about it before.
There are three types of questions:
1. Questions about the idea, because the audience didn’t understand the model. These might be your fault, especially if they keep coming up.
2. What-If questions about the future, competitors, opportunities and ideas. These are sometimes useful, and can spark new ideas or partnerships.
3. Statements from your audience poorly disguised as questions. These are just the worst. Don’t be one of those people, clumsily weaving a brag into a question that shows how much you know. Try to brush these off.
You also may decide to bake the common questions into the rest of the pitch, and address them as part of your talk.
Can we explain why we’ll succeed where others have failed?
This is a delicate balance.
If your idea sounds too hard, the audience will either lose focus or openly question your capability.
If your idea sounds too easy, the audience will assume that someone cleverer/more powerful will quickly overtake you.
Your aim is to simultaneously explain why your offer doesn’t already exist, your unfair advantage, and why a copycat couldn’t launch a better version of your business next week.
Remember, your business model is constantly evolving. Use the feedback you receive from your audience to strengthen the idea, and keep on dreaming up new iterations of your enterprise.