3 Ways for Hardware Startups to Nail the Pitch
Pitching, selling, storytelling — whatever you want to call it, communicating your vision and business is vital to building a great company no matter what the type or stage (think hiring, fundraising, literally meeting anyone new).
For hardware companies, this list is longer and storytelling takes more forms. Crowdfunding videos are a great example of the importance of communicating the story well. Point of purchase (POP) displays are another. Even the packaging of your smart thing is a form of storytelling for hardware companies.
When crafting your story in whatever form it may be, it can be easy to get lost in the details and overwhelm your audience. Too much detail and complex explanations can be lethal to keeping your audience’s attention and achieving your goals. To avoid getting stuck in the weeds remember the purpose of why you will be onstage/on the call/in the meeting/sharing, and keep going back to this throughout the work.
Most often, this can be boiled down to three goals:
- Be clear: The better you are at explaining your company in a simple and effective way, the faster you can move on to more meaningful conversation. Keeping it simple and clear also increases the likelihood that your audience will stay engaged rather than tuning you out or getting distracted by watches, phones, what to eat for lunch, etc.
- Be memorable: Whoever your audience is, they are inundated with new information everyday. And if they are investors, your pitch is just one in hundreds or thousands they will see in a year. Use design, humor, data and personal style to stand out.
- Inspire action: What is the next step? What is the next thing you are looking for your audience to do? The answer here is almost never “give you a term sheet.” Instead, pitching is just one step in a process. Are you looking to get a first meeting or a second meeting? Are you looking for an intro? Tailor your deck with this goal in mind to help you be clear, memorable and better prioritise the information you include.
With these goals in mind, it’s time to start building the storytelling material. There are a lot of great resources out there on how to construct and hone your pitch. We’ve listed some of our favorites below. To build on these existing resources, we’re going to focus on three key areas where we see many hardware founders falling flat.
1. Hello World: The First Impression
Just like a first impression when you meet someone new, the first slide in a pitch deck will impact the audience’s lasting opinion of your startup. Yet many founders waste this great opportunity to kickstart their story.
At a minimum, the first slide should include your startup’s name and logo, be visually appealing and convey your company’s brand. Sounds easy but so many startups neglect the design aspect of this slide, bogging it down with too much text or stale visuals. Design carries a lot of weight in instilling confidence in your ability to build a great product, grow a brand and a company. Core stuff here.
In other words, design is really, really important and should be applied consistently through every part of your business.
But back to the first slide…
Get your designer geared up. Even if you don’t have an in-house Milton Glaser for slides or a friend to help, there are a bunch of free/cheap tools out there to help — Canva, Unsplash and even Google Slides now has a design function. Or use sites like Fiverr bring in a pinch hitter designer.
Once you have a good looking first slide, level up and include a short tagline and powerful visual that includes your product. This serves a few purposes: it informs the audience that you are building a hardware product, gives you a chance to show off the design, and depending on the product, it introduces what you’re building.
- Visual: “A picture is worth a 1000 words” rings true. A great visual can create a powerful connection with your audience to create empathy and build the user story. What we’ve seen works best is using a photo of a person with a looks-like prototype or better. Use a high quality photo that looks real (not overly staged or collaged together). If your prototype is not there yet, a good rendering can work or depending on your product and target audience, a powerful visual of your target end user without the product. If you’re really early or your product is not winning any beauty contests, then you’ll need to rely on the overall look of your slides to imply that your product will be well-designed. Don’t force the image if the quality of the rendering or prototype is not there.
- Tagline: Including your tagline gives a further glimpse at your brand and values. Keep it short to avoid clutter and distracting the audience from what you’ll say. When speaking over this slide, introduce yourself and your company with a one-liner. Be sure to mention the hardware and software side of your business. It should be clear from the first 30 seconds that you are building a connected hardware company.
2. Problem: Don’t be a gadget
The Problem Slide is a big deal for any pitch. As Dave McClure says: your solution is not my problem. The point here is to make the audience care and agree that this problem is a really big deal! Winning slides often explain what the problem is in an obvious way, who has it and why current solutions are not cutting it. Stories work well here. Another pro tip: tie the visual you use on the Hello World slide to the story you introduce with the problem.
For many hardware companies, the Problem Slide is particularly important to combat the “just a gadget” shrug off.
In these early days of IoT, hardware startups’ problem slides often seem trivial: this thing is not connected to the Internet so why not connect it?!
I recently had this very conversation with a software-only founder about our portfolio company, Kello, a connected sleep device in the form factor of an alarm clock. His first thought was it already exists: the alarm on your smartphone and other apps and programs to help you sleep better.
This is the classic “build a painkiller-not-a-vitamin response,” or getting the gadget label: it’s a nice to have but you should really focus on solving an immediate pain. In this case seemingly it’s just the need to get up on time.
It’s your job to help the audience get over the hurdle of why the problem matters.
In this instance, the response from the software founder was because I didn’t do the following.
- Frame the problem: Show how the problem is both short-term and long-term. The magic for so many IoT products (and certainly ones that we look to invest in) lies in the longer term data collection and software value with the hardware serving a more immediate need and the software addressing a more subtle and long term need. For Kello, it’s less about getting up on time and more about getting a better night’s sleep through lifestyle changes.
- Numbers: Another way is to show through data how much people care about the need. Whistle did a great job for their connected pet collar by calling out the market size (there are a lot of pets), spend (sizeable) and owner’s concerns (money spent on health and the number of dogs getting lost). These hard numbers immediately flip what may seem like a trivial concept into something of serious weight to potential investors.
3. Solution: Smarter than smart
Time to let your technology shine! This is about how you use tech to address the problem and where you start building your case for why the best solution is connected hardware.
Be sure to anticipate these kinds of questions from investors:
“Why should I buy and use your connected device when I already have an app or a functional, non-connected solution?”
“What’s the value that pushes your solution over the line?”
Wearing my investor hat, this gain needs to be clear and big enough to combat the fact that hardware has higher startup costs, greater complexity and tougher distribution.
- Smarter than smart. Show how your product isn’t connected to the internet to share alerts or loads of data. Instead, build and demonstrate how your product helps you action the data, make decisions, change behavior or take steps out of a process to add value. It’s nice to know when something is wrong, but it’s even better when your product can solve it.
- Show a simple solution. Include visuals that demonstrate how the hardware works with software. Avoid technical details - keeping it simple is best. It’s most important that the audience broadly understands what the solution is and how it solves the problem. They should be able to say your solution back to you in their own words and get it pretty much right.
As we know, “simple can be harder than complex.” It’s very likely that whittling down your ideas and product into simple slides and explanations will take time and hard work. But it will be worth it to achieve the core goals to be clear, be memorable and inspire action.
Some other great resources on how to communicate your startup:
3. First Round Capital’s advice to take storytelling to the next level, and the “Seven Deadly Sins” to avoid when storytelling.