Perfecting your startup pitch

Over the past month I have had the privilege of attending or speaking at a StartupWeekend in Boise, TechStars “for a day” in Seattle, TechStars New York,  Microsoft Kinect Accelerator in Seattle, TechStars Boulder (with Jason Mendelson) and finally mentoring at a Startup Weekend in Medellin, Columbia.  It’s been great to meet so many new and aspiring entrepreneurs in so many cities.  In the process, I’ve heard lots of pitches and coached many on how to make their presentations better.  Here are a few tips;

1.  Find the emotional hook (pain is better than opportunity) – most great companies solve a painful problem and as an entrepreneur you should be able to characterize the user/pain in a way that the audience connects with.  People should hear the pitch and say, “damn, that is a massive pain and I hope they can solve it” and the more they feel it the better.   Bonus points if the pain has some social benefit or very direct and quantified monetary cost.

2.  Compelling data points – For a good pitch you need to have 3-5 strong data points that make the audience think, “wow, that is a big space”.  This is usually the number of users who will be affected, the “cost” of not having the solution and a few examples of similar companies who have been successful solving a similar problem.  Pick the data points and weave them into the story vs. showing complicated graphs and forcing the audience to guess the meaningful numbers. For example, the winning team at SUW Medellin focused on the thousands (they had the real number) of women in Medellin who reported being the victims of violent crime last year and provided them a quick way (the red button on their phone) to report their position to police via sms and Twitter.

3. Show the solution – screen shots, live demos or video of the product are way more compelling than a verbal description of the solution.  Show vs. tell.  Worst case, make realistic screen caps and/or real wireframes of the product, but make it visual as if it really exists.  The closer to working product you can get the better!  Keep the demo to ~30-45 seconds and/or have an animated screen-cap version that you can narrate.

4. Develop your “it’s like” metaphor – Everyone is busy and inundated with ideas, companies, products…so you need a simple hook that they can remember.  Often this can be done with a “it’s like” which combines something they know with something new.  Or, it could be a combination of 2 well known things.  One of the compellig teams in Columbia developed a product that they described as “instagram meets graffiti” – without even seeing the solution, you could imagine what it does, why it would be cool, who might use it and even guess on a freemium business model where you could have virtual spray cans, fonts or other treatments.  Check it out at http://www.behance.net/suavecolombiano/frame/4201023

5. Stick with one business model (and advertising is not usually very compelling) – I have seen countless teams pitch their idea with several business models (advertising + sponsorships + premium content + paid features…).  Each of these models requires different things from the user and likely different feature prioritization in the product.  Pick one and make a clear case on why it will work. If possible use other comparable companies in your space to validate that this model can work.  For example, with Gist we focused on business professionals and planned to charge a monthly subscription fee.  We based on model on the same users (sales guys) who already paid for solutions like salesforce.com and Blackberry that delivered them an information advantage.  While we could have had targeted ads (like LinkedIn) or API licensing deals (like Full Contact) we wanted to stay very focused on one model.   If you need help developing this, check out this post.

6  KISS – most good ideas are simple or at least sound simple of the surface.  Under the covers, it is likely that there are lots of problems (small and large) that need to be solved, but if it seems simple, people can remember the solution and often they believe the solution can exist quickly vs. it being too complex, complicated and therefore hard to implement, communicate and get right with too many variables.   Keep it simple, stupid.

7.  Passion – You, as the entrepreneur, need to show your passion for the company, the problem, the users, the solution, the team…People want to connect with others who have passion and commitment.  Passion will take you through the tough times, get your teams to work harder and keep your customers engaged when your product is less than ideal.  Get excited, get loud and be passionate when you talk about what you are doing and how it is going to change the lives of your users (and potentially the world)

If you can keep these points in mind, your idea will come across as much more compelling for investors, your team and most important, users who have the problem!

photo credit http://siliconflorist.com/2011/01/13/pitch-club-people-venture-capitalists/

Good advisors (and investors) want to be managed

I get asked for my advice on new startups alot and I like to give it.  I have also been very fortunate and had great mentors, advisors and investors.  So, I can say that the best relationships are ones where the entrepreneur works hard to manage his advisors.  This generally includes;

  • very regular updates – I like to do every 2 weeks.  This gives enough time for substantive progress, but not too much time to forget what is going on.  It also gets an early entrepreneur on the right cycle for future board meetings (monthly).  It can also usually be aligned with a software sprint releases so you usually have some good product news to share. Stay on schedule and do them religiously.
  • provide the context  as backup – sometimes I can give advice with very little context of the exact specifics of the business, but if I think I need more detail, provide me links to supporting docs, your thinking, the choices you are weighting (pros/cons)…  You can also provide a summary of other thoughts from the team or other advisors to help me know the overall context of the decision.
  • ask for specific help  – investors and advisors are usually busy and yet they really want to help. So make it easy for them to focus their time, effort and expertise on the things you really need as an entrepreneur and where they have specific expertise.  Laying out where you need help in an email, an update or a meeting is really useful to direct an advisors focus.  And, if applicable or when sending out to a larger group, be even more direct and ask a specific person to do a specific thing for you.
  • choose the right venue – sometimes email works, sometimes a call, sometimes a 1:1 and in many cases you are better off to get the group together to discuss a more complex or important issue.   Choose the right venue  with a focus on the most efficient and timely way to get the input you need and no more.
  • keep track of time – most of us advisors have a mental model of how much time we have to give to any one company.  This varies depending on our level of engagement and/or the specific needs of the company at any one time.  But, as the entrepreneur, keep this time in mind and try to balance it across advisors and across a timespan so we can stay fresh and alert.
  • give credit and say thanks – it is always nice to give public credit to people who are helping.  it shows that you are listening, appreciate help and it often spurs other advisors to raise their game and do more.

As for the specific updates, I have written about that here and here and here so hopefully I am giving enough, specific advice.

Killing Your Startup By Listening to Customers « Steve Blank

Customer Development = The pursuit of customer understanding

Part of Customer Development is understanding which customers make sense for your business.  The goal of listening to customers is not please every one of them.  It’s to figure out which customer segment served his needs – both short and long term. And giving your product away, as he was discovering, is often a going out of business strategy.

The work he had done acquiring and activating customers were just one part of the entire buisness model.

via Killing Your Startup By Listening to Customers « Steve Blank.

A simple way to develop and pitch your next company (the CVFB method)

I work on lots of new ideas for companies. I’ve developed the following tool that helps me (and it seems many others) to quickly develop and evaluate these ideas.

In the simplest form, it helps create an elevator pitch, (e.g. for www.gist.com – We focus on relationship-centric professionals (sales, PR and recruiters) (Customer) and, save them time (Value Prop) as they prepare for meetings, by creating dynamic full-contact dossiers (Feature Set) and charge them a monthly service fee (Business model).

To get started on finding the “MVC” (minimum viable company), you need to start with the “smallest idea that is big enough” (a few customers, 1 value, 1 key feature and a clear biz model).  You can always expand over time, but most ideas become too complex (lots of customer types, lots of features, varied business models…) and are therefore too complex to get off the ground.

You need to identify real people you know (we built Gist for me and 2 sales guys, thx Kendall and Brandt) who can validate the idea, value, key features and their willingness to pay (which should be very high).  As you find representative people, you can abstract key attributes of them to start to generalize into “personas” which becomes your real target customer.  And from here you can start looking for the best beta users (more on that here). Finding real people is, in my opinion, the single most important activity of a startup!

You can then compare different parts of the model to see how well the idea works.  A few examples;

  • C–V – does your target customer value what you are doing (e.g. saving time, qualifying leads, increasing revenue…) and how much (scale of 1-10)?  Is the value a real pain or just nice to have?  How do they solve this pain now?  How would they quantify value? As you are doing customer interviews, asking questions like this and comparing the answers will help you in prioritization as well as more efficient communication.
  • V–B – is the value you’re delivering correlated to the business model, meaning the more value you deliver, the more you can/should charge? Work hard to correlate these things by changing one of the other.  This ends up relating to ROI (return on investment).
  • F–B – are the features you are building organized to support the different price points? You can imagine your “pricing page” from this exercise.  Really great post on personas and pricing from Patrick Campbell (@Patticus) and Price Intelligently here
  • C–B – does your customer usually buy in the model you are proposing?  What other services/products do they buy that are similar to yours and is the model similar for these products?  How much do they pay for related services? And, is your target user accustomed to buying in the way you propose (e.g. per user) or are you trying to educate them on a “new” business model at the same time as you are introducing a new product offering?  The latter might slow down the sales process, especially for enterprise buyers.

If you can’t make an idea work on a just a few users, just a few features, a pretty clear value prop and a clear business value, it’s probably not such a good idea.  I know one tool does not solve all the issues in considering a new idea, but this is the best one I have found.

One key area that is not considered in the above is around competitive solutions.  Most people who say they have a need, have spent no real time or money on a finding a solution.  Red flag on them as early adopters and potentially red flag on the overall idea.  But, as you identify a core need, and solid interest (yes I would pay to have that solved), look hard/ask lots of questions about competitive solutions.  In fact, I usually suggest my target users test/evaluate the competitive solutions I know about.  I would much rather they find out about them before I build my thing vs. after, and they usually appreciate the information.  If, after doing a good competitive eval and passing that through your early target base, you might find a good place to start!

Please suggest others and/or other ways this could be improved.  Good luck on your next idea.

6 steps to finding the right beta users

Finding the right early users can make or break a startup. If you find the wrong people, they will either waste your time with irrelevant suggestions or could easily send you off in the wrong direction. Here are a few suggestions on strategies to find the best early users.

1. Articulate the real target customer in as much detail as you can (I use a Mindmap to do this and have written about the process here). Try to expand with as many relevant customer attributes as possible, then generalize into a “Persona” that you paste up on the wall as the “target customer”.  

2. Take the key attributes and build out a Survey Monkey or Google Form survey. This is designed to collect structured and relevant data about people you want to use the product.  In addition to all the normal attributes, try to understand how the target discovers new services and which related services they use today. Here’s the one we did for Gist (a company I started in 2008). From the time we announced the closed beta until the time we actually opened the site, we had over 6500 responses to this survey and a sweet group of users to choose from!

3. Develop a few marketing messages that you think will get people excited and are provocative. For example (around Gist) we might use something like – “wanna make Outlook social, sign up now for an early look” or “does your CRM system suck too much of your time, we are building a solution, sign up now”.  

4. For a simple approach, skip to step 6.  For a more complex, but powerful solution, sign up for Launchrock or Waitlisted (newer solution) and build out “landing pages” for the key marketing messages. 

5. As part of the waitlist process include the link to the Survey (response page and email confirmation) and try to collect responses there.  Tell people that they need to fill out the survey AND share to others if they want a chance to get into the beta.  You should be building something they value so ask for some effort!

6. Start promoting the marketing messages and launch site via social media with a focus on places where your target users hang out (e.g. LinkedIn for bizpros) and with some focus on key bloggers/twitter stars. You can search on Klout or BuzzSumo (find good blog posts/authors) for people of topics and @message these key players telling them about your plans/product and asking for input.

If your messages are good, people will promote and some portion will fill in the survey. These are the people who are likely to a) really want a new solution and b) likely to do real work and give you real feedback on the product. As the results come in, you can easily group people by relevant attributes (via survey responses) and then focus on releasing the product to a finite number and with a focus on the right people.  

Tim Ferriss, of “4-hour work week” and “4-hour body” fame has also written about related ideas here and it is well worth the read.  Finally, the master of customer development, Steve Blank has a great post here on the relative value of users vs. valuable users and 1000 True Fans by Kevin Kelly is a good reference too.