The Art of the Pitch: Shifting from Good to Great
FOR SOME OF US, the easiest part of creating a new business is the idea, the harder part is selling that idea to strangers who can help you. Bankers, angel investors, partners, suppliers, even your spouse will require convincing that your idea has merit, value and is worth the risk. Enter the business pitch or a shorter version sometimes called an elevator pitch.
It is important to note that there are several types of pitches that entrepreneurs should develop, and it depends on the context and audience as to which you should use.
For example, the classic elevator pitch is based on the idea of telling someone about your new venture in the time it would take to ride in an elevator, typically 30 seconds to two minutes. It is designed to provide a glimpse of the new venture with the goal of generating interest and another detailed conversation with the listener at a later date. However, if this short conversation does grab their interest, and you are invited to provide a more detailed pitch presentation, the pitch will change considerably.
HOW TO PITCH BEST PRACTICE SUMMARY
Keep it short, be focused
and stay on task.Explain clearly what your product or service is.
What is unique about
your product/service?Who is the target market? How will you acquire them?
How will you make money?
Revenue model?What is the potential for growth, scale?
Be enthusiastic, show passion.
Dress well, look professional.
Anticipate questions and have answers.
Practice, practice, practice
your pitch.
This article will focus on the extended version of the business pitch, where an entrepreneur will incorporate a visual presentation with the verbal pitch.
There are many articles, books and Internet information on “how to pitch,” and gleaning from the many sources of information available, a “best practice” summary on pitching would include any or all of the following in the box on the right.
AN EVOLVING PROCESS
However, the art of pitching has been evolving. To make your pitch more impressive, the following five areas can help entrepreneurs improve their chances of a successful pitch:
1. Include a story
behind the numbers
Hard data is critical to convince potential investors. You must show quality research of the industry and potential markets to help investors understand the scale of your proposed business venture and that you know what you are talking about. But often numbers themselves need more explanation. For example, including a problem faced by a single member of your target market (with a name), and the pain points felt by this individual, and how your product or service can/has helped them, can lead to a relatable journey for the investor. This makes the argument for numbers stronger if the investor has a clear emotional story to relate to.
2. Sales projections that are bottoms up
The idea of targeting a smaller percentage of a larger market is simply hard to believe and lacks substance. Rather, show how you will build sales from the micro level, for example the number of sales you can generate through different channels and at what price point. Perhaps through various market segments you are targeting, or the range of customer choices in your product mix. Are there other areas of potential revenue, such as consulting or licensing, that are all based on your unique set of circumstances? Instead of looking at the broad total market and choosing an arbitrary slice, focus on your realistic, actual sales potential and build towards a macro view.
3. Validation of your product/service
Early sales is the best validation of your product or service. If customers are already spending money, your projections are much easier to believe and it shows that you are moving on from the conceptual stage to proof of concept. For example, have you acquired any purchase orders or perhaps a signed letter that a future customer will buy from you? Have you had a Kickstarter campaign where people will invest based on future products being sent to them? At the very least, are there customers using the product/service currently, even if you have given it to them for testing? Include their testimonials if you have them.
4. Pitch presentations are more visual and use less text
The familiar (boring) bullet point presentations on black and white slides are thankfully becoming less common. Business thought leaders such as Guy Kawasaki, Seth Rodin and others have long argued against the tired, standard PowerPoint presentations so often used in business, suggesting instead the power of highly graphic, pictorial and concise slide presentations. Often called a “slide deck,” these visual presentations are expected in investor pitches and are so much a part of the pitch they are shared with investors along with a business plan (or in some cases instead of one). It should be somewhere between 10-20 pages. Kawasaki has emphasized the 10/20/30 rule: no more than 10 pages, take no longer than 20 minutes for the entire presentation, and no font less than 30 point.
5. Have two pitch decks: one for the live pitch and another to deliver to investors
If the slide deck is left for investors to review, you will need information on them as they will not recall your entire pitch. The problem is when you are presenting you don’t want to crowd the slide with too much information. So the answer is to create two slide decks, the first used in the oral presentation is more graphical, has more pictures and illustrations with less text, and a second slide deck that is left behind as a standalone document or file to be viewed later. Both can be given to the investors, and they should both match in their flow and messaging, but each is different in the amount of information provided. By incorporating some or all of these suggestions you can move your next pitch presentation experience from good to great.
