By Patrick Riley, GAN
Posted March 14, 2018
Your Other Job
Like it or not, most of us reading this are salespeople. Your title just may not say it.
Daniel Pink is one of my favorite authors. In his book, To Sell is Human, he repeatedly makes the case that 89% of the U.S. workforce isn’t in sales, but it is their job to sell.
Brandi, GAN’s Director of Community and Brand, sells me weekly on something we need to spend on in order to help the GAN brand. She will never have “sales” in her title, but in order to be effective, she has to be able to share her ideas effectively.
As CEOs, you’re required to sell your vision to investors and your team. As Account Managers, you’re required to sell your customers’ needs to upper management. And as Directors of Marketing, you’re required to get the rest of your company bought into spending money to generate excitement for your company.
This is particularly true for those running startups. You’re a small team and on any given day, you’re doing everything we just described, by yourself.
We’re all selling.
Birth of a Salesperson
Unfortunately, so few of us know how to pitch well, especially when it comes to pitching for investment. Whether you’re pitching your boss, team, potential investor, or spouse, here are the ways I’ve found to craft the perfect pitch:
Start off with the problem, and keep talking about it.
If you’re pitching for 15 minutes, talking about the problem should be the first eight minutes of your chat. If you’re pitching for 10 minutes, this should be 6 minutes of your chat. Meaning, the problem should be at least 50% of your discussion. The reason: Most people hate conflict. Hearing the problem (and all of the facts associated with that problem) will make people want to hear the solution as soon as possible. They want their anxiety to go away, and you want to set yourself up to be the one that resolves it. Plus, when it comes to pitching to investors or upper management, the more time you spend on the problem, the more they’ll actually believe it’s a real issue.
Share the solution like you were talking to one of your parents.
Once you’ve pitched the problem, you want to provide the easiest solution to fix the issue at hand. And if there’s one area where startups get things particularly wrong, it’s this. They feel as if they need to create a complex solution to a complex problem. That’s incorrect. Everyone wants to hear the simplest possible solution to a big problem. One test I have when startups pitch me is, “Would my mom understand this?” If not, I actually stop them and ask, “How do you explain what you do to one of your parents?” So don’t overestimate your audience and, instead, just keep it simple. Oscar Ramos at Chinaccelerator says this so well: “Lack of clarity is the single most common point of failure for most pitches. If the audience doesn’t understand your core idea, anything else is almost irrelevant.”
What will the world look like now?
You’ve shared the problem and the solution. Now, everyone wants to know what’s going to happen next. What will the world look like after I invest in you or buy your product? This is critical. It helps generate the ultimate buy-in. Will you be able to hire two more salespeople that each generate $500K in revenue, decrease attrition by 75% because your customers love you now, or something else that will make a real dent once you’ve received funding? Chenoa Farnsworth runs Blue Startups and shared that she wants to hear, “What your customers will say, feel, and want about your product because you’ve actually talked to them. Not because you read a report, or think you know what they want.”
So you should show what benefits will be gained and be super specific. A ton of startups tell me that—after investing—they’ll “hire two programmers and use the money for operations,” but tend to stop there. I want to hear what happens after you do that—What will your company look like and how will it perform after you make those hires? Once you’ve done this, investors should realize that this is an opportunity they need to jump on now, or else they’ll miss out. As Timothy O’Connell, head of H-Farm, says, “Make the moment hot! Investors all have a strong sense of FOMO so you need to make it clear that the startup you are pitching is in its groove and there are a number of investors looking to jump on board.”
Do all of this in 15 minutes or less to generate buy-in.
A pitch that lasts more than 15 minutes is like a resume that spans more than one page. You could do it, but people are more interested in hearing the primary points and then getting to the important part—the conversation that comes next. That’s where people really get bought into you and your idea. Think about it like creating a movie. If you just showed someone a movie and then asked them what they thought, they may or may not like it. But if you brought them in while you were in production and had a dialogue about your choices, why you believe in it, and your vision for how it should look, there’s actually a solid chance they’ll become a fan. That’s because they were “at the table” early on, engaging with you in the process.
Which brings up another point. Are you selling or are you getting people to buy-in to your vision? There’s a subtle but notable difference here. You’ll notice that one way is making it all about you (i.e. your pitch) and the other way is making it all about them (i.e. you do the pitch to get the other person’s buy-in and feedback). Not to mention, investors hear hundreds of pitches a year; there’s a good chance they’ve heard an idea like yours before. And that’s okay; it’s exactly why your particular vision is often more important than a revolutionary idea. Lloyd Waldo over at StartupYard just posted a blog that makes this point. “We choose startups based on their vision, and how that vision makes sense for that team, that technology, and the problem they want to solve. It is mostly about people.”
Look good while doing it.
One of the easiest ways to get turned down is when the medium you’re delivering your message through kills your actual message. Said simply…your presentation sucks. Reilly and I hear pitches from startups who just joined an accelerator, and they’ll tell us that they put the presentation together the day before for showing it to us. This isn’t good because, unsurprisingly, it’s horrible and we have to spend mental energy making sense of slides when all we want to do is get to know the startup.
So just don’t give a pitch until it looks solid. Have a designer check out your deck before you ever have your first conversation with an investor. I’d much rather hear that you need to wait a bit until we sit down. Which also creates the added benefit of increasing FOMO for investors (see Tim’s comment above).
Don’t oversell and stay confident.
As I’m just about to hang up the phone with a startup, the CEO will do something like share some random customer fact, or the idea that they’re willing to lower their valuation to work with us. What that tells me is that they’re not confident in the pitch they just shared. Have confidence in your pitch because I’m sure that you don’t need to sell it any more than you already have, especially if you followed the script above.
