The journey towards the realization of a startup is coming to an end. In the previous episode we talked about how to create value and monetize on the idea through the use of the Business Model Canvas. Only the last fundamental step for the launch of the startup is missing.
We are talking about the pitch, that is how to best present the product and/or service. Are you ready? Let’s start.
What is a pitch? Many of you are probably thinking about Steve Jobs’ famous pitch for the launch of new Apple products.
But, let’s take a step back. The term pitch comes from “elevator pitch”. There are several stories about the birth of this terminology and how to present an idea. One of the best known is the one of Michael Caruso, senior editor at Vanity Fair in the 90’s. Caruso, tired of not being able to talk more than 3 minutes to the editor-in-chief, to present all his editorial ideas, decided to accompany the chief on his elevator trips. Hence, the term elevator pitch – typically a time between 30 seconds and two minutes to expose your idea and convince your audience.
Today, pitch is the way in which a startup presents its ideas and solutions to an audience, with the aim of securing funding, partnerships or to facilitate the launch of a new product or service. A Pitch is supported by the pitch deck (a presentation consisting of slides, as a support for the pitcher – the one who will perform the presentation, the pitch). Generally, we tend to create two versions of the same pitch deck: one will be the version with a lot of text, which will be shared via email with those directly interested; the second, is the version with a lot of “visual” and little text, the one that will be presented directly in front of an audience.
The pitch deck (the slide presentation) is composed of several key elements that combined together will help you to create a perfect pitch. Let’s start by mentioning three of them:
- minimalist and straight to the point
- dynamic (which can be modified according to the present audience and its objectives)
Now, let’s see what are the essential elements to be included in the deck. Basically, what are the contents that should not be missing. Each one must be summarized in one, maximum two slides. The contents do not necessarily have to be presented in the order exemplified here below, but in the most useful way for effective storytelling. In doing so, we will be helped by the very first pitch of a very well-known company, Airbnb.
Do you remember when, in the first episode of the 5-step startup creation, we identified the problem? Well, now it is the time to tell that need to an audience, and being convincing! In this phase we have to explain what is the market gap we are focusing on. In doing so, we must try to express the problem in such a way that the public can recognize themselves in it, and that investors can understand what you are talking about without too much effort. For this purpose, it is useful to use real-life examples and try to make people understand the order of magnitude of what you are talking about. Remember to focus only on one need, this will make you perceive as someone who is committed and determined to solve a challenge of which you know every facet.
At this point, the time has come to introduce the solution you have thought of in order to solve the problem. The explanation of your idea must be presented very clearly and concisely. Do not forget the time factor, that is, it is important to clarify why this solution is effective at this precise moment in time. As some of you may know, timing in business plays a key role: a right idea at the wrong time could mean no investment. At this stage, simply stay at a low level of detail and present your solution almost as a “vision”.
At this point it is time to explain the characteristics of the market in which you want to operate. The market, in fact, is a fundamental element for the determination of the “exit strategy” (exit strategy = strategy executed by an investor to liquidate a position in a financial asset, typically an investment). If, for example, you operate in a small market, the returns for investors will be adversely affected by it. A good way to represent the market is through a chart that can show its size, and past and expected growth rate. Always remember to include the sources you used to determine the market.
Now it is finally time to show your product and/or service. Implement a photo, a video of the product or, even better, a user who interacts with it and, to make it more impressive, add, if available, a brief description of the product or reviews of users who have used it. If your solution is still in an early stage you can present a graphic representation of what the final product should look like and, in parallel, insert a photo, or better, a video of your most advanced prototype.
This slide is dedicated to the growth metrics of your offer, typically recorded monthly (month-over-month). The metrics you should include are, for example: revenue, user base, customer retention… . NOTE: if your startup is early stage, or if the growth data are not very attractive, you can avoid including this information.
If you think about it, most likely you weren’t the only one who had the fantastic idea you are about to present with your pitch deck. For this reason, the idea counts at 10%, while its execution is worth 90%. What does this mean? It means that the executive team is extremely important. Who invests in your product or service wants to know who are the people behind the project and why these people are suitable to “execute” the mission and vision of the startup. The easiest way to represent the team is to describe the skills, 2 or 3 “bullet points”, of the “leadership team”, typically the co-founders.
The competition (the competitors)
At this point it is important to clarify which other startups or companies are operating in your own market and, above all, what differentiates you from them. It is very important to bring out things that make you unique. Typically in this slide you use a matrix graphic, in which the key features of the solution are inserted in the axes and it follows the positioning of all the actors within the space. If your positioning within the matrix does not reveal your uniqueness, you may have a problem.
Financial projections (financials)
In this slide, 3-5 year financial projections should be included. The financial projections are inaccurate by definition, as they are projections. Despite that, they give a possible investor an idea of the company’s potential development. Give the projections the right weight. The reason is simple. Imagine that you have given your pitch deck to an investor, including financials. After a few months he may contact you again to find out whether or not you are in line with your financial projections, and you should be ready to respond adequately. In addition, it is appropriate to take a conservative approach rather than exceeding it. Last advice, only include a summary of the financials in the slide. You will surely have a detailed Excel file that potential investors can consult, right?
At this point, it is time to explain how much money you are looking for in order to realize everything you have presented so far! It’s a good idea to give a fairly precise figure, by entering a cross-section of how you intend to use those resources. Don’t worry if the figure you are asking for is not perfectly in target with the investors you are meeting. If they find this opportunity interesting, they will be happy to co-invest with others. Finally, remember to include your contacts.
Once you have prepared the deck there are still some key elements to consider: the speaker, the audience and the communication channels. Let’s go!
Clearly the effectiveness of the pitch cannot be separated from its pitcher. The speaker, in fact, must know how to conquer his audience, without ever losing the attention of those who are listening. For this, there are three key factors to consider:
- the speaker’s motivation during the pitch;
- the energy that is transmitted to the audience;
- the communicative style – which corresponds to the knowledge and ideas you want to convey.
It is very important not to arrive unprepared at the moment of the pitch and not to improvise: always prepare a lineup with the most important points you want to touch in your speech.
The speaker must adapt to his audience, do research and know who is listening to him. There is no one pitch that goes well for every occasion, but it must be customized according to the target audience: empathy plays a key role during any kind of presentation. For these reasons, the questions you should ask yourself during the preparation of a pitch are:
- what does my audience want to know?
- what do they need?
- what do they prefer?
- what kind of communication are they used to?
1. The non-verbal channel
Pitch is (also) a matter of standing: learn to manage your body movements, because during the presentation it is not effective to be completely rigid, but neither to move continuously.
You can ask friends, colleagues and relatives to support you in rehearsing your pitch, to try, as much as possible, to reproduce the context in which you will keep your presentation. In this way you will be able to cope with the pressure and fear of public speaking.
The non-verbal channel includes:
- gestures: use your hands, but not too much.
- facial expressions
- the movement of the body: you must possess the space, know when it is good to approach and/or move away from your audience;
- physical posture: how to stand?
2. The visual channel
People will remember little of what they hear and read, but they will remember a lot of what they see. Slides definitely come in handy when it comes to presentations, but keep in mind that, basically, every single slide has to convey only one message so we must avoid overfilling them with superfluous information.
It is important to create a variation using different elements to maintain the attention and concentration of the audience: for example by alternating videos, photos, graphics and diagrams, but without overloading the individual slides with information. This would make the content less visible and less important.
When creating a pitch, therefore, you cannot overlook its design.
It is important to:
- structure some layouts and repeat them during the presentation to convey logic and consistency
- choose a suitable font (it is essential to take into account the target audience, but in general it is good practice to avoid too “fanciful” fonts or the use of multiple fonts, at most two)
- the animation style must have a stylistic coherence;
- the color set must be consistent with your brand; therefore avoid improbable color combinations and use complementary colors;
If the goal of the pitch is to capture attention, the most difficult part is not “add”, but take away: less is more. A simple and essential structure will certainly have a positive and professional impact.
3. The auditory canal
The secret to make a good pitch is to use simple, clear and understandable language and the effectiveness of the message you want to convey is also influenced by the rhythm of the voice. So learn how to modulate the volume and manage the pauses (close all those annoying “mmm” in a drawer) and the silences within your presentation.
Now that you know all the steps to launch a startup, you just have to take a shred of courage and launch yourself in this new adventure, certainly not easy but full of satisfaction. But first, if you haven’t done it yet, subscribe to our newsletter: you can find it here.