The 5 Questions Your Pitch Must Answer
Storytelling may seem like a soft term. That’s something for fiction writers or the marketing department, right? Not really. When you’re a startup, storytelling is one of the most important things you can do, content expert Steph Patterson says. Nowhere is this more apparent than in the startup pitch.
“Your story is absolutely critically important. Ben Horowitz at Andreessen Horowitz says, ‘The company story is the company strategy.’ It’s also your secret weapon. Last year a VC might have looked at 550 companies. This year that VC is going to end up looking at 850 companies. A lot of those companies are working in similar spaces and have only slight differences. So how does somebody make a decision? Have that narrative that sets you apart and differentiates you,” Patterson says. “Tell the story that will open the door. Of those 850 companies, the VC will take a call or a meeting with about 10% of them, and ultimately she’ll only end up investing in 1%.”
Patterson understands pitching on a deep level. She’s worked on more than her fair share of presentations for companies that include Boeing, Stanford, Cisco, Salesforce and Oracle, in addition to a number of startups. She’s also honed her skills at top presentations consultancy Duarte and helped former professional athletes and CEOs develop million-dollar public speaking careers.
In this presentation at a Spero Ventures event, Patterson details the five buckets of content you need to develop a compelling deck, and unveils a number of prompts to help you generate ideas to build a powerful narrative. She also shares some of the best pitches and one-sentence company descriptions she’s seen. Below, Patterson gives her most actionable tips for making your pitch shine.
If you want to stand out from hundreds of pitches, the first thing out of the gate should be a strong opening narrative.
Answer The Five Questions
In a full-blown pitch, there are five main questions you must answer that are in every investor’s mind. Think of it as five buckets of content to develop, like prompts. “Prompts are as simple as getting out a whiteboard or some sticky notes. A lot of times we don’t work on our story because it feels overwhelming to think about working on a story, but if you just start going, ‘Oh, I’m just using these prompts to come up with some ideas,’ then suddenly the creative juices start flowing,” Patterson says.
Know the answers to the following five questions, even if you wind up ultimately discarding the answers from your ultimate pitch. Here’s how to tackle each piece of these five buckets of content with prompts and strategic thinking:
Question #1: Why is this the right moment for your company?
This question is the framework for the high-concept pitch, which is what you want to say if you only have 1–2 minutes. There are two ways to tackle the high-concept pitch:
- A problem-solution framework. This is a go-to style for many high-concept pitches: Here’s a problem in the world, and here’s how we’re going to solve it. Ways you can try to do it:
- Tell a personal story to illustrate a relatable pain point. In a pitch for Carbon Health, founder Eren Bali told the story of his mother becoming ill.
- Establish credibility. Bali mentioned he previously founded a startup that was successful, Udemy.
- Use metaphors. Bali made the technologization of hospitals easier to understand by using similar examples. “Just like Udemy became the world’s largest school, and AirBnB is world’s largest hotel network without owning any buildings, and Uber is world’s largest cab company without owning a single car, we believe that world’s largest hospital won’t be about buildings.”
In your high-concept pitch, you say, ‘The world was a certain way. Now it’s changed. Hence our company.’
2. An inciting incident narrative. An inciting incident is something that happens to the protagonist at the beginning of a movie that causes them to change. Say, when Romeo and Juliet meet, or when Nemo is kidnapped in Finding Nemo. This framework works in this early pitch by Snapchat founder Evan Spiegel.
Some notable parts of this pitch that make it effective:
- Personal storytelling. Spiegel mentions his friends telling him about their children, and how they were confused by how their kids took “a zillion pictures a day.”
- Shows what’s changed. Spiegel was able to demonstrate changing behaviors around photos, discussing how photographs historically have been around “accumulation,” used to save important life moments — while today, because of mobile phones, images are about identity: “Pictures are used for talking,” Spiegel says.
- Establishes the market. The pitch outlines how millions of kids are now using pictures to communicate with each other.
- Demonstrates that they’re first. Another byproduct of the “parents just don’t understand the kids” storytelling technique is that it opens the door for Snapchat to show that they’re the first to catch on to and capitalize on a rising trend that most people aren’t yet hip to.
Question #2: What’s at stake?
To answer that question, do a risk-reward brainstorm. “Take out a piece of paper and make this little T-chart. What are some potential risks an investor might consider when investing in, say, a healthcare company? What’s at stake? What’s the size of the opportunity? You’re putting yourself in the shoes of the investor that’s hearing your pitch and you’re saying, ‘Where are they going to look and poke holes and resist my message?’ These are your risks, and where is the potential reward for them?”
Question #3: How will your company change the world?
Here’s where you describe the promised land. “You have to assume the investor knows nothing about your space, and you have to be able to explain it in a manner that’s easy to understand. It’s such an obvious thing that it’s easy to miss — people think, ‘Of course I told them what my product does,’ when they really haven’t,” Patterson says.
To address this problem and answer the question compellingly, Patterson asks startups to write a one-sentence description. Especially if you’re doing a deck that you send ahead of time, the slides should contain a single sentence that quickly tells the investor everything she needs to know. Here are three templates for doing that:
- What it is + who it’s for. Define the product category and the domain. Who does this impact? For example:
‘Rhumbix is a field intelligence platform for construction.’
‘Common is communal living for millennials.’
‘Gettable is construction equipment networked.’
- What you deliver + what’s unique about how you do it. Patterson calls this the “primary differentiator” framework. “I like to use this with companies that are more service based and less product based, because you don’t necessarily have a product category,” she says. Some examples:
Joymode: More fun while owning less.
AeroFS: Sync all your stuff, with or without the cloud.
- What’s your value proposition? In this one, you’re naming the product category, target customer and key benefit — the latter helping illustrate the “promised land” you want to convey. “I can’t overstate the importance of conveying a compelling promised land,” Patterson says. “People need to buy into your vision of the future. Share it clearly and appealingly.”
Here are some examples:
- [COMPANY NAME] is a software-only orchestration platform that lets service providers and large enterprises create low latency cloud infrastructure anywhere, at any scale, on any network.
- Omada Health is a 16-week online digital health program that coordinates everything people at risk for chronic disease need to embrace lasting change.
- [COMPANY NAME] is a real-time analytics platform that makes asking questions of your data as easy as having a conversation.
Test your pitch. Are people convinced? Do you get the head nod?
Question #4: How does your product solve a key customer pain point?
You don’t have to answer this question in one fell swoop — it could wind up being in several parts of your presentation. “It’s all about pitting the old world against the new world over and over again,” Patterson says. One common mistake here is that pitchers overcomplicate the problem. “You’re just like, ‘There’s no solution for this. This is way too complex.’” Here are a few ways to avoid this:
- Fill in this prompt: “It used to be [X] but now you can [Y.]” Patterson had one business intelligence and analytics startup do an analogy brainstorm. They pulled images for “Business intelligence today is like….”, coming up with flowers dying in a vase, a hard line telephone, static. Then they threw out ideas for “But with us, it’s like…”: Autofill on Google, self-driving cars, a Tesla software update. “We ultimately landed on ‘We make asking questions of your data as easy as having a conversation.’ It really resonated with people,” Patterson says.
The rule of brainstorming is you always say, ‘Yes, and…’ Keep building, no matter how lame you think an idea is.
- Pick impactful stats. Statistics help tell a story, but be careful not to overdo it. “People love statistics, but pick the hardest-hitting one. With one client, we did, ‘98% of construction mega projects incur cost overruns or delays,’ to talk about the problem inherent, right? Then we picked a second stat to double click on what’s actually causing that cost overrun — 50% of budgets go towards labor, which is the largest and least understood piece of the budget.”
- Tell a story. In the case of the financial payments startup Remitly, the company told a story of a woman sending money to the Philippines. “They talked about what that process was like for her, and how many steps of communication and prep that it took her to actually do that. It ultimately just set up the prompt from the customer point of view, and for Remitly, part of their value proposition was being the most customer-focused remittance company,” Patterson says. “Tell the customer’s story. It sets up the piece of your narrative that shows the problem’s been solved.”
Question #5: Why you and not someone else?
People get caught up in trying to drum up numbers to show traction, but it can be difficult for an early-stage company. Patterson calls it “evidence” instead. “When you think about it as evidence, it suddenly opens up a whole range of possibilities of why you and not somebody else. When you’re early stage, you’re not going to have the user numbers, the revenue numbers necessarily, to tell a traction story, but you can tell a lot of other stories around why you,” she says. For example:
- Quotes from important people talking about your product.
- Early results from a pilot or beta-testing.
- Highly defensible IP or patents.
Look for what you’re strongest at and then just amplify the heck out of it.
With one of Patterson’s clients that was selling risk management software, they highlighted a set of new regulations in the U.S. and U.K. that would require more supply chain transparency, which the software could help with. It became part of their “why us” story. “So amplify the heck out of it, and then speak with absolute conviction,” Patterson says.
Craft Your Narrative
So now you’ve got five buckets of pitch content. Revisit some pitch checklists. Make sure you hit on everything those investors are looking for. “At this point you should have a wall with tons and tons of sticky notes with ideas. What’s next is putting those in a persuasive narrative. Put a structure around it and start deciding which ideas stay and which ones go,” Patterson says.
Patterson suggests trying Duarte Design CEO Nancy Duarte’s Sparkline. “It’s a structure that great presentations use. First, contrast between the world as it is and the world as it could be. It starts with a call to adventure. So when we talk about the risk and rewards, that’s really going to play into what is the call to adventure, what is that ‘but what if you could’ moment in your presentation? Create a new bliss to end the story on,” Patterson says. “Take your sticky notes and start bucketing them. Look for turning points. Ask yourself if you have enough of them in your presentation. You need moments where you’re saying, ‘This is the world as it is, but this is what it could be.’”
Finally, make your slides last. Don’t go into the slide-making process too early — start with the sticky notes and craft a story and narrative first. “I stay in sticky notes until I feel like I have a cohesive story, then I start building the slides,” Patterson says. “Remember from the book ‘Get Backed’ that your pitch is your first prototype. It’s really true. Your pitch evolves over time. At the end of the day, you have to tell a story. That’s what creates staying power in peoples’ minds.”
Structure is really what makes a story a story. Without it, you just have a grocery list.