My grandmother, who passed away last year was an amazing story teller. I remember the hundreds of stories she would tell me as I grew up. She even wrote several books that were collections of children’s stories from around the world.
Why does this matter in pitching your company?
Because without story, you have nothing.
Think of your pitch as having a beginning, middle and an end. It should be a story of triumph filled with passion and vision. A story that tells the tale of belonging and battle.
Dont believe your pitch should have the same elements as the greatest stories ever told? Then you are missing out on the key ingredient to a powerful pitch, because a story will allow potential investors to relate to you and your company.
Couple of key points: This is not for your 30sec pitch (you can compress the story, but the truth is that a 30sec pitch is just problem + market + solution. – “Mismatched socks cause 5% of all employee firings. Socks.io allows people to ensure that their socks are matched correctly before they leave the house, eliminating the embarrassment and saving jobs.”)
Why did you start this business? What about the problem compelled you to act? In the beginning, you need to set the stage. Explain the genesis of the idea and why you are passionate about it. (Notice I never said solution. That will come later.)
“I have two dogs at home, and they were truly difficult to train. I constantly wished I could have a trainer in the house with me when the dogs would bark at the door or do other things that were inappropriate. Clearly, I wasnt doing a great job of training them. After doing a little research, I found that the pet market is more than $41 billion in size, and even so, there was no great in-house training solution. So rather than give the dogs away, I built PetTrainer.ly.”
Analysis: The connection point is around training dogs. Everyone with a dog had to 1) train them; and 2) can’t understand why their dog does XXX everyday. The difficulty with this pitch is if the investor isnt an “animal person” you may find that you have immediately turned them off. Hence the importance of research into whom you want to pitch.
This is the meat. This is the section where you tell the story about the market size, the opportunity. The business itself, and your secret sauce. How are you going to change the world? What is the benefit of having this investor?
Spend the most time in the middle of the story, and allow for the most questions during this time.
“Most people dont realize how important it is to be able to zombify your parents. With the rising cost of health care, its less of a burden to have a zombie mom and dad versus parents that continue to burden their children. With the market standing at $50billion dollars, our ZombieParen.ts creates a unique delivery mechanism by putting Zombie Juice inside denture cream. Over the course of a few months, elder parents no longer desire food or need costly medicines.
We have also figured out how to deal with the brains problem. We have developed in conjunction with Zombie Juice, a wide range of synthetic brains, which really allows us to sell the razor cheaply and make our money on the blades.
To date, we have 10,000 Zombies in our system, buying on average 10 brains a month at $5 a brain. We are growing at a rate of 40% month over month, and with our upcoming Facebook and Android apps, we expect that number to double. We havent built an iOS app yet, given most iOS users have clearly lost their minds.”
Analysis: Zombie brains? Really? In this case the story is a big market and a business model based on reoccurring revenue. If you are talking to investors that dont shy away from physical products, and have been successful with the Gillette model, they now have enough information to ask solid questions and get a good feel for what the business could be, and how they could generate returns from the business. More importantly, it helps the investor understand how you are thinking about the business, and if they can trust you to steward the business.
The end is the easiest part. Ask for what you want and why you want it, and then be quiet. Let the first question come from the investor. Let them absorb your pitch, your story and your ask, and then, let them respond.
“We need approximately $500,000 to fund about a year with 4 employees including myself. That will get us to the next milestone, which will be 50,000 cats herded on a monthly basis. At that point, we will probably have to raise a bit more money.”
And, thats it.
Step One was find the right people to tell the story to. Step Two is tell an interesting story. Step Three will start to cover the demo itself.
Next Post: Pitch Perfect – Demoing
- Pitch Perfect – Pre-Pitch (learntoduck.com)
- The Art of Being a Dick (learntoduck.com)
- Perfecting Your Pitch (philpresents.wordpress.com)
- Open & Honest (startupcfo.ca)
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Years ago, I asked a friend who was obsessed with golf where his obsession came from.
“There are two things about golf, Micah,” started George. “The first thing is that is the ultimate competition. Just me against the course. Every time I play, the course presents new challenges.”
George then lowered his voice, as if he was telling me a big secret. “More importantly, when you play golf, there is a moment when you hit the perfect shot. Then, for the rest of your life, you are trying to hit that shot again.”
Recently, I have been thinking about what makes an entrepreneur unique. Why do we do what do when we do it? What compels an entrepreneur to get up after being beaten into the ground, only to rise up and do it all over again?
We are chasing the perfect success.
At some point in our lives we experienced what we consider to be the perfect success. It may not have been something that drove a lot of money, it could have been something extremely simple, or even a short series of events.
For me, my first perfect success was when I was nine, and I was able to convince my friends and cousins to work for me. When I could articulate a vision (lets make enough money to go to Jack-in-the-Box and see a movie) that everyone bought in to. (BTW, that perfect success was followed by my first failure, when Jack-in-the-Box screwed up my order and the movie was so bad, I, for the first and only time in my life, walked out.)
In many cases, this perfect success isnt self-evident when it occurs. Its is only afterwards that we realize how important that moment was, and how much we both miss and want it again.
Drug addicts will often talk about the “perfect high.” How they will reach a point where they are exactly, perfectly euphoric, and then the moment passes and they spent the rest of the time trying to achieve that moment again. As they get more and more addicted, it gets harder and harder to achieve that moment.
Same with entrepreneurship. It gets harder the more you do it. The expectations rise, the game gets bigger. Most entrepreneurs dont look to do something smaller after a positive outcome, rather they look to go big. Their sense of the perfect success has grown beyond the initial idea.
By the time I got to high school, making enough money to eat and see a movie was no longer interesting. I knew I could get people to work with me, and I ran several smaller businesses (the biggest was probably a pool cleaning business), but I started to learn that I could profit from connecting people. As a broker, I would connect buyers and sellers of things and take a small cut. I guess you could say I was Independence High School’s personal eBay.
In my pool cleaning business, I hired the most popular kids, which gave me access (and protection – which if you know Independence High in San Jose, was important), and would create connections that ultimately created win-win-win relationships for everyone.
For each of us, there is a perfect success that we are trying to achieve. We talk about it; we think about it; we analyze it. We test and retest and do it over and over again, until there is that moment of achievement that cant be surpassed.
I spend a lot of time talking to entrepreneurs and startup enthusiasts. One of the most common questions I get is:
“Should I do <whatever>?”
And my answer?
“Doing always gives you more information than thinking.”
As entrepreneurs, we love to dream, to think about the impossible, to divine simple solutions to complex problems. The discussion of what could be dominate our days. We pitch venture capitalists and angels based on a vision of the future that is predicated on the prototypes and designs we have spent countless hours thinking about.
We entrepreneurs fall in love with possibility. We hire people based on their potential and willingness to take the risk to follow a dream. Our entire being is based on what will be, rather than what is.
We believe that we can do anything. We lay down plans. We pontificate. We challenge.
And then, at some point. Someone says:
So we get obsessed with metrics and stats. We look at the numbers in a million different ways. We wonder why users are being acquired as quickly as we thought, or not engaging as much as we believed. We see the bright side, even when things are looking bleak.
We fall back into what we are comfortable with, dreaming. We look at the problem with “new eyes.” We bring in new people that can “adjust paradigms.”
Or if things are going like gangbusters, we exclaim our confidence in the outcome. We assume that more of what we are doing will create more of a positive outcome, so we do more of it. We think about new ways to do more.
We fall back into what we are comfortable with, dreaming. We get excited and look at the problem with “new eyes.” We hire more people who can “expand the effort.”
At the core of most entrepreneurs is the dreamer. We prefer to think and model rather than just do.
The best thing a startup can do is to do. Build it, put it out there, collect data, and use the data to make decisions.
Even design can be driven entirely by data. Should the border be blue? Who knows? Just test it.
Most startups spend the majority of their time scoping out products and direction, and forget to include analytics. If they are a website, they throw in Google analytics at the last minute, and let it run. If they are an app, they think to themselves, “Oh well, our sales/engagement/ads will tell us if we are doing the right things.”
Thinking about doing implies a lack of action AND a lack of learning. As you build out your web app / gadget / mobile application / desktop app think about the pieces of data that are important to know, and those that you will want to know in the future. Implement the analytics and reporting early.
And then stop thinking all the time.