Teams for Effective Innovation - The Marshmallow Challenge!

The Early Stage PitchSheila Ash ©

April 2015

Summary

What is an elevator pitch?Pitch frameworksThe audience for the pitchThe pitch conversationThe pitch deck

What is an elevator pitch?

“So what do you do?”

An elevator pitch is a short summary used to quickly and simply define a profession, product, service, organization, or event and its value proposition

Possible to deliver in the time of an elevator ride, 30 s – 2 mins

Origin widely credited to Vanity Fair editors Ilene Rosenzweig and Michael Caruso

Short, sharp and Persuasive

Pitch frameworks

Situation – Impact – Resolution

The One Liner

Wow – How Now

The Question Pitch

Daniel Pink’s 21st century pitches

Pixar pitch

Perfect it, then Practice, Practice, Practice

Situation – Impact – Resolution

Situation (conflict). Illustrate the pain current customers are facing

Impact (escalate conflict) – Explain the impact of that situation.

How is this affecting profits, market share, customer loyalty, or anything else the prospect is concerned about losing?

Resolution – Explain how you solve the problem. Focus on benefits, not products and services.

Generic Framework

We solve [insert problem situation] by providing [insert advantage],to help [insert target] accomplish [insert target’s goal]

Depending on the stage you’ve reached, you might follow it up with a second sentence about your business model: We make money by charging [customers] to get [benefit]

The one line elevator pitch

Your product / vision , your company purpose

Keep it around 30 seconds and under 150 words

Make it easy to understand and avoid jargon

Create a statement, question, or fact that piques their interest – what’s in it for them?

Make it convincing and engaging

We are X for Y (assuming X is attractive and Y is a big enough opportunity!) Example

AngelList (https://angel.co ) is where the world meets startups like ABCStartUp.com

www.scripted.com is a marketplace for businesses to hire freelance writers

Strategic Scientific Consulting helps scientists build successful businesses

Me? I build people’s capacity to achieve

Wow – How - Now

WOW. Say something intriguing (even puzzling) that will make the other person want to hear more.

A creative summary of what you do that demands some clarification.

Ideally, the prospect’s reaction will be to ask “What does that mean?”

HOW. Answer the stated (or unspoken) question and explain exactly what you do.

NOW.  Shift into storytelling mode, giving a concrete example of a current customer.

The key phrase is “Now, for example…”

Generic framework

I/we work with (insert target market)… who are (insert feeling word)… with (insert problem/issue you solve)

I/we work with /help (target market)… who want to (describe what your customers want)

Example

Brian Walter (http://brianwalter.com/why-brian) a communicator, who makes messages go verbally viral

Prospect: So, what do you do?

Me: I build PowerPoint muscles.

Prospect: Huh?

Me: I teach people how to use PowerPoint more effectively in business.

Now, for instance, I’m working with a global consulting firm to train all their senior consultants to give better sales presentations so they can close more business.

The Question Pitch

“Have you ever purchased an ABC online? {wait for answer} Well, my company is ABC.com. We are the number one,

national distributor for all ABCs, online. We sell every type of ABC available as well as provide very competitive service pricing. We are the leading, online ABC provider in the country/region/world

Use this if your arguments are strong https://vimeo.com/66508882

Example

Pink’s 21st Century Pitches

The One-Word Pitch - Write a 50 word pitch. Reduce it to 25. Then to 6. One of these is almost certainly your one-word pitch

The Question Pitch - Use this if your arguments are strong https://vimeo.com/66508882

The Rhyming Pitch https://vimeo.com/69775579 - Try http://www.rhymezone.com

The Subject Line Pitch - Review subject lines of the last 20 e-mail messages you sent. How many appeal to utility or curiosity. If <10, re-write each that fails the test. https://vimeo.com/67907476

The Twitter Pitch - The best pitches are short, sweet, and easy to retweet, circa 120 characters

The Pixar Pitch – Storyboard approach

Six 21st Century Pitches by Daniel Pink

The Pixar Pitch

Once upon a time ___________________________.

Every day, _________________________________.

One day ___________________________________.

Because of that, _____________________________.

Because of that, _____________________________.

Until finally,_________________________________.

The Pixar Pitch - Read all twenty-two of former Pixar story artist Emma Coats’s story rules: http://www.pixartouchbook.com/blog/2011/5/15/pixar-story-rules-one-version.html

Advice from the best "They're able to articulate the opportunity in 90 seconds or less."

While "Shark Tank" pitch segments average 10 minutes in length, the unedited pitches can last an hour. But if an entrepreneur can't convince at least one of the investors within a minute and a half that they'll be missing out on a fantastic chance to make a ton of money, then all the time in the world won't be enough to win them over.

"They're able to explain why they are the right people to execute the business plan."

A great product isn't enough. The entrepreneurs need to convince the investors that no one else understands the product or its customers better, and that their passion for the business can't be matched.

"They know their numbers."

"I've seen so many deals fall apart after the first two have been achieved, and then you ask questions about anything to do with the numbers side and if they don't know the answer, they just evaporate," O'Leary says. If an entrepreneur suggests that an investor can help teach them about their industry's market size and their product's ideal margins, then it's game over. "You lose confidence immediately when someone doesn't understand the numbers."

Example: AirBnB

http://www.businessinsider.com/airbnb-a-13-billion-dollar-startups-first-ever-pitch-deck-2011-9#-1

Airbnb is a website for people to rent out lodging

Example: Foursquare

http://www.businessinsider.com/this-is-the-first-pitch-deck-foursquare-ever-showed-investors-2011-12?op=1

Foursquare is a local search and discovery service mobile app which provides a personalised local search experience for its users

Example Pitch decks

http://www.pitchenvy.com/gallery/mixpanel-pitch-deck/

https://mixpanel.com/blog/2014/12/18/open-sourcing-our-pitch-deck-that-helped-us-get-our-865m-valuation

http://onstartups.com/tabid/3339/bid/98034/The-Pitch-Deck-We-Used-To-Raise-500-000-For-Our-Startup.aspx

http://www.slideshare.net/Bufferapp/buffer-seedrounddeck

http://www.slideshare.net/stijnvanlieshout1/pitch-deck-betpitch-a-fantasy-football-betting-platform-35403394

https://www.mint.com/ http://www.slideshare.net/PitchDeckCoach/mint-pitch-deck-46465532

http://8fit.com/story/seed-funding/ https://speakerdeck.com/micho/8fit-pitch-deck

http://www.slideshare.net/benjaminevans/walletkitslidedeckpdf-130206104240phpapp02-18147368

Know Your Audience

Who you are meeting with?

What is the investor’s focus?

Are there related investments?

How much time do you have?

-

These influence your deck, the discussion and the questions you’ll likely be asked

Conversation with Slides

The deck is important. Work on it & get it right!But the conversation is more importantBudget your timeAllow for discussion alongside each slide10-15 slides – no more!

Shared Slides have no voiceover

Your deck will be shared (i.e. among partnership)Therefore

Must be equally compelling with/without a voiceover

The stand alone slide pack Deck should tell its own story Do not rely on transitions, animations, builds, intricate

slides Make the file size manageable PDF or secure URL are alternatives to PPT

Content

For early stage companies, it’s all about product And the best mark of product is market validation Beware the demo - Demos are great… but remember

these four rules:Be careful of timeDon’t get lost in productHave backup if (when!) something goes wrongGive even weight to product & traction / data

Pitch Structure

The Big Idea

Why you?

The Current Problem

Your Solution. Why Now?

Traction and Validation

What’s the Future?

The Ask

1-2 slides

1 slide

2-3 slides

3-5 slides

2-4 slides

1-2 slides

1 slide

The Right Team

Why are you the right team for the problem?

Include management team and advisors, investors

Include bios with key, relevant experience

Outline division of responsibilities

Think an expanded team profile

http://angel.co/visually

Why Your Solution Now?

The current problem Customer / consumer pains?

How are they solving today?

Your solution How will they solve with you?

How is it different than market?

Why now? Why is solution possible today?

Why is it right for today, tomorrow?

How big is the market?

How big can you be?

Know your numbers!

What value are you creating?

Be realistic!

AirBnB

Mint.com

Mint.com is a free web-based personal financial management service for the US and Canada

Traction and Validation

Quantitative evidence of market demand Proof that somebody wants your product It communicate momentum in market adoption

Most convincing order Profitability Revenues Active users Registered users Engagement Partnerships/clients Traffic

Investors focus on the 3 specific items So every pitch deck needs to answer 3 questions

Does it look like your customer base is growing?

If not, then you are dead in the water.

Communicating customer traction to prospective investors is hard

Investors have limited time so you need to graphically depict that you are growing in as few words as possible

Do your customers like your product?

you need to demonstrate that your product is getting “stickier”, and the usage patterns of your customers are getting more favourable ie there is traction

The reason you need to demonstrate that your product is sticky is simple: acquiring new customers is MUCH more expensive than getting existing customers to pay for your product again.

And happy customers are also your best salespeople -- if you are able to successfully demonstrate that your existing customer base is happy, that in and of itself is a low-cost sales channel

Does it look like your business/product can actually scale?

Remember that venture investors are not interested in ordinary returns -- that is why they are in venture capital and not in the S&P 500.

If you are not able to demonstrate a clear path to $100M within five years, your company is not a good candidate for venture capital.

You will constantly get asked about scalability

Ready for zero product traction

Traction can be shown through acquisition, usage, retention, etc.

ReadyForZero showed user activity as measure of product efficacy - Users pay-off debt 2x faster than non-users

http://www.slideshare.net/shannonmcnay/readyforzero

The Future

You have outlined team, product and success to-date

Now how does this tie into the big vision and the fundraising?

What are the next 12-24 months of:

Product

People

Performance

Finances

The Ask

Essential, yet commonly overlookedYou must ask for what you want!

What size investment are you looking for? How long does it get you? How will you spend it? What are goals before raising the next round? How else can the investor(s) help?

Summary

What is an elevator pitch?Pitch frameworksThe audience for the pitchThe pitch conversationThe pitch deck

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