For educators, a brilliant feature of pitches, especially 8-12 minute Venture Pitches, is that they are perfect learning objects. They’re condensed diamonds with their most critical facets on display. For EVAs this makes critical analysis easy: any facet that is missing, deeply flawed or irrelevant is immediately apparent. Venture Pitches should display all of the following facets, while Elevator Pitches will showcase a few of the flashiest ones:
- Pain Point: the market gap or problem the venture is addressing;
- Solution: the new product or service that resolves the pain;
- Differentiation: the reason someone will buy or use this new product or service, versus the alternatives;
- Marketing: where and how buyers/users will be reached;
- Championship: the competency of the venture’s leaders and advisors;
- Competition: an overview of competitors and partners;
- The Ask: how much money, etc, is required to take the next step; and
- The Return: how much and how soon will an investor be recompensed.
Ultimately a great pitch is just a well-told story where brevity is a high art. The first requirement is a “hook” – the original thing about the venture that makes it excitingly viable. Second, it needs to anticipate where an EVA might be skeptical about that viability, and weave a concise story that seamlessly answers such doubts before the EVA has a chance to lose attention. Third, it needs to stop immediately there, because every single word that isn’t critically important to viability will demonstrate a lack of focus. An EVA will think: if they can’t focus when telling me the right story, how will they focus when telling customers the right story? Game over.
So the numbers, facts and narrative have to be exactly right, but persuasion also happens through the passion, personality and skills of the presenter. Trust piggybacks on psychology: pitches without a human face aren’t as engaging (if you don’t “like” someone you won’t like their pitch either). An EVA’s advantage goes beyond psychology: they can critically analyze how well the facts correlate with what they know about the world, and how well the personal characteristics of the presenter correlate with what they know about successful people. Here are the four primary areas EVAs will care about:
1. CEO & Team:
- CEO Credibility: does this person exude the capability, convey the confidence, and exhibit the experience to achieve success against all obstacles?;
- Management Team: has the CEO assembled a stellar team along with the other human and material resources required for success?;
2. Venture Concept:
- Venture Concept: is it original? is it feasible? have they done their homework? is the story credible and compelling?;
- Opportunity Space: what is the realistic market size, market share and revenue that these products or services can capture in a very competitive world?;
- Competitive Edge: do they have any innovative advantages, and can they keep them?;
4. Venture Plan:
- Market Readiness: how long, difficult and realistic is the proposed critical path to success?;
- Exit Strategy: do they really know what success looks like – is their destination clear?; and
- Investor Affinity: how risky is this proposition? do I like this CEO? do I like this plan? can I add more than money to ensure success?
Successful ventures adapt and refocus continuously, often in significant ways, even on the fly. A good entrepreneur, like a good teacher, should be acutely responsive to audiences and changes in environment. During live presentations, EVAs watch carefully about how entrepreneurs respond to tough questions. Headstrong entrepreneurs won’t try to mend holes, perhaps even refuse to acknowledge them. Less confident entrepreneurs will waver on every new suggestion. The critical point is that pitches should get better and stronger with time, so EVAs have no patience for incomplete, lame or evasive propositions. An entrepreneur’s best strategy is to be upfront about their weaknesses, presenting them as known problems needing resolution.
Further reading on pitching ideas can be found here: How to pitch a brilliant idea by lsbach, K.D., Harvard Business Review, September 2003. (You will need to be logged in to UBC’s VPN server to access the full-text version of this article. For more information on how to establish a VPN connection with UBC, please refer to http://www.library.ubc.ca/home/proxyinfo/)
You might also enjoy the presentation by David Heinemeire Hansson (Ruby on Rails, 37Signals) at Startup School 2008 about the failed logic of most startup pitches.
The Pitch Pool
In ETEC522 we once created and maintained a “Pitch Pool” of local, real-world venture pitches to serve as an authentic learning resource. However, since the dawn of the YouTube age, the web is full of lots of examples of real people pitching real ideas. Television has also got into the act with “Dragon’s Den” and similar reality shows.
Such video pitches reveal real people exposing the souls of their ventures (and themselves) for your edification and viewing pleasure. You’ll encounter our current Pitch Pool Forum shortly when you complete the activity for this section.