Top Three Missing Pieces with Startup Pitches I've Seen
Calen shares pitching advice for technopreneurs and hackathon participants. This article explains the top three tips that can help you close that funding opportunity.
I’ve advised a lot of groups with their startup pitches, and I often see the same things missing in their pitches. Below is my usual advice to them:
1. Cost the Problem
Pitchers often talk about a problem - not being able to find good reviews for restaurants, not knowing what the events are in your area, difficulty in finding parking - but not how much the problem costs or what people are willing to pay to make the problem go away.
The best pitches I hear go something like, “Mr. X loses Php 2 million pesos a year on his fish farm because he is unable to anticipate overheating of his fishponds. Our device allows him to monitor the temperature of his fish farm and automatically turn on cooling mechanisms.”
From statements like that, the investor knows that buyers are willing to pay some price between zero and two million pesos. Multiply that by the number of Mr. Xs, and you have the potential size of the market.
Remember that investors are interested not so much in solving problems but in how much money they can make, so start talking about money as early as possible.
2. Who Are You?
It matters to investors who you are, because execution is more important than ideas. What is your
competitive unfair advantage? If you are proposing a technology solution, are any of you engineers? If you are tackling the problem of a particular market, is one of you an expert on that market?
First mover is not an advantage. Any good idea will be copied by someone with more resources, so you will be in for a fight. Give the investors a brief rundown on who you are and why you bring unfair advantages to the fight ahead.
3. You Are Not Your Target Market
Unless you are, in which case see #2. More often than not, you are building something for someone else. “This is an app that addresses the needs of OFWs.” Are you an OFW, or are you close to any? If not, don’t make those assumptions. Go out and validate your customers.
One of the best customer validation jobs I’ve seen on a Startup Weekend (where participants have to come up and defend startup plans and prototypes in just a weekend) was for some guy who wanted to build a parking app, and wanted to validate that people were willing to pay for parking spaces near mall entrances. What he did was park near a mall entrance and approach passing drivers, offering them his parking slot for money. He got one guy to pay him Php 40 and he moved out of his parking space for him. So now he has validate his price of Php 40! Remember, the best form of validation is revenue from real customers.
Well, that’s my advice for you startupers out there. I was starting to feel like a broken record so I decided to write all this down. Hope the next group I advise reads this ahead so I can have a different conversation next time. :-)
Originally posted at: Top Three Missing Pieces with Startup Pitches I’ve Seen