Getting Pitch Perfect: Lessons From Techstars
This post originally appeared on blog.up.co
Wesley Eames is the Co-founder and CEO of AncestorCloud (Boulder '16), a genealogy marketplace connecting family researchers with experts around the globe. He is also the creator of Cousin App, and was previously an Advisory Board Member at Global Family Reunion and the Marketing Manager at Faulkner Media Group.
Your pitch is an asset to you and your startup. I’m not just referring to the digital asset of an audio recording or video. It’s an intellectual asset that is critical during the fundraising period. Not only is it critical in order to have crisp, powerful statements in regards to any and all investor questions, but the process you have to follow to truly understand and communicate the vision of your business is an invaluable one. I wish we wouldn’t have put it off until now.
A lot of entrepreneurs and investors criticize startup accelerators for how much time they make founders allocate to developing their pitch. I can see where their distaste comes from, however, I found that we created the most compelling aspects of our pitch by spending time on it daily while at Techstars Boulder.
We finally found — through iteration — a way to put to words what we were feeling, and the vision we had for our company.
Our mentors were incredibly helpful during this process. We spent multiple sessions with many mentors, going over little things like which words to use where, and where to throw in little pauses. For the first time ever, we got extremely nit picky about developing our presentation. Little details like this were exhausting, but made all the difference in my confidence and delivery when Demo Day arrived.
Of course, it never hurts to have the founder and former CEO of a $2 billion technology company from your same industry introduce you before you pitch.
I’ve embedded the video footage of our pitch from Demo Day as a resource to you. It’s certainly not perfect, but hopefully it will give you some good ideas for your own pitch. We watched over 100 other startup pitches, extracting things we liked from each as we developed our pitch. I want others who are crafting their own pitches to see our pitch as another data point. Following the video, I’ve provided what I believe to be (1) the “essentials” of pitching, (2) a great way to structure a pitch, and (3) the “DOs & DON’Ts of pitching (in part two).
The content of your pitch is actually secondary. What investors really want to feel and see during your pitch is natural, unwavering passion for what you are doing. The bad news is, passion can’t be faked. You either possess the passion for what you’re doing, or you don’t. It either keeps you up at night, or it doesn’t.
You won’t be able to hide it if you’re not completely consumed by the thing your company does.
An investor once told me his favorite thing about a pitch is when he thinks he knows exactly where it’s headed, but is then surprised by something the entrepreneur says or does. He said, “You are truly excited about something you normally don’t care about, and you want to give the person your money because they just changed you, or convinced you to change your mindset.” What this investor is saying is, you have to be very deliberate about your presentation. Instead of relying on industry facts and jargon, tell a compelling and surprising story. Give your audience a reason to have more excitement and optimism about your industry and venture than they had before they met you.
Our brains use two different systems of thinking, and yes, investors’ brains are just like yours and mine (although they sometimes seem fundamentally different). The two systems are intricately explained in Daniel Kahneman’s book Thinking Fast and Slow. System 1 is your fast, intuitive and automatic mode of thinking. System 2 on the other hand, is your slow, methodical, analytical mode of thinking. As Kahneman explains, “The idea is that System 1 is really the one that is the more influential; it is guiding System 2, it is steering System 2 to a very large extent.”
Think of the systems as two separate little people living inside the investor’s brain. System 1 is the watchdog, always on high alert. He’s the fun one of the brain, and is always looking for something exciting or interesting. He doesn’t have the ability to analyze complicated information, but leaves that work to the boring System 2. He doesn’t think things through, but reacts to things on the fly. His job is to make snap judgements, not think slowly through problems. His ultimate purpose is to guide System 2, and awake him in the event that there is important information to be analyzed. System 2, on the other hand, is always in the background sleeping. He only wants to be awoken if there is highly important information to analyze. He’s the ornery, but intelligent occupant of the brain.
Most entrepreneurs pitch to System 2 by stuffing their pitch full of logical facts and numbers. Little do they know, System 2 is asleep, and System 1 isn’t paying attention or alerting System 2 because the information doesn’t seem exciting or interesting. In order for you to communicate with System 2, you first have to grab the attention of System 1.
The two best ways to appeal to System 1 are fear and greed.
In the first few minutes of your pitch you need to either get the investor fearing that if they don’t invest they’ll “miss out,” or experiencing a hit of dopamine at the thought of making loads of money.
Once you get them experiencing those feelings of fear of “missing out” or greed, System 1 will tell System 2 to wake up and pay attention. Only at that point can you rely on logical data.
As I mentioned, we don’t have all the answers. The suggested structure that follows is simply one way to structure your pitch, but it is one that was rigorously developed over weeks and weeks of consistent effort at Techstars Boulder. I’ve found that this structure works extremely well for most situations:
Hook — 20 seconds to make me pay attention. What can you say to grab my attention? What storylines could you use (Hero’s journey? Origin story? Customer story? Awesome traction? Industry trend?)?
Problem description — up to 40 seconds, no industry jargon, simple/crisp, make it bleed.
Solution description — clear statement of how you solve the problem and what is different/unique.
Demo (what might you want to show, what situation may you want to demo) — up to 1 min demo / product walk.
Business model — how do or will you make money
Go to market strategy — which customers will you target and how will you reach them?
Traction — what traction has your company achieved? Revenue, customers, etc.
Opportunity — what is the bigger opportunity here and why will investors get excited?
Team — what is your background and why are you the team to do this?
The ask/close — what do you want the audience to do (invest? Buy? Tell friends? Find you for a meeting?)
This was originally published on Medium.