Confusion Kills Pitches
A few weeks ago I was in the audience of a number of early-stage startup pitches. They were all in the technology space, with solutions spanning social discovery to infrastructure development.
Most of the founders gave well prepared, engaging presentations. And interest from investors was clear from their questions probing financials and future rounds.
But what I’m most interested in is what the companies are actually doing for consumers. Why is it special right now? Why is it different? And surprisingly, these questions were hard for the founders to answer.
Take one startup who were building a social discovery app, while also planning to develop a recommendation engine powered by AI. Ok, that sounds pretty typical, but this wasn’t just any recommendation engine. The plan was to give users directions, as they were making video recordings for the platform, on how to improve their shot. All powered by an AI which would learn what type of video we like. Now I’m no expert in AI, but that task sounds pretty difficult. And if they pull it off, Hollywood might be interested!
And then take another startup building a portal which brings together the different parties involved in construction projects. Its killer feature is running smart contracts on a blockchain. Why? I’m still not quite sure. The explanation sounded fine, but there appear to be simpler solutions to me.
Then there was yet another startup, this time in the security space. Their product looked reasonable at face value, but also very simple. They mentioned running pilots and tracking metrics to inform organisations how safe they are from a people perspective (the biggest attack vector in virtually all scenarios). So naturally, I asked about the impact of their software: had it stopped any attacks? Or helped improve security? They didn’t know.
These founders gave engaging presentations, but the content just didn’t add up. Answers to questions typically skirted key issues, rather than showing the passion of a founder ready to face challenges head-on.
So how can you do better?
Rather than rushing around fast focusing on execution, regularly take time to sit back and consider exactly what you’re doing. Especially from the perspective of your customers (or potential ones). Founders Fund’s Chief Scientist Aaron VanDevender describes his approach to this from an investment perspective in a great 20 Minute VC episode. When faced with a non-trivial conclusion, he starts from first principles to see if he can work back up and validate it. And if he fails, he’s got a valuable avenue for the team to explore as an alternative.
In pitches, put value for customers at centre stage. Then product features can be presented as ways to unlock that value. Elon Musk’s Tesla pitches often portray this idea well. If you’d like to see a breakdown of how this works, take a look at my article: Journey to Utopia — Pitch Like Elon Musk.
Finally, make sure everything makes sense. If I’m left feeling confused and my questions go unanswered, I’m unlikely to invest and your audience is unlikely to see why your solution is so valuable. Some people recommend presenting to friends or family to explore this, but I’d advise thinking everything through yourself first because even in real pitches people are often too nice (and most of the time, silence isn’t a great response).