The purpose of the pitch (NEF workshop)
Last week I attended an NEF workshop on pitching, or rather the work that needs to go in before you even get to try pitching! The workshop was held at London Business School and presented by Dr Jeff Skinner.
Depending on who you spoke to, the title of the workshop was either “Timing your Pitch” or “The Purpose of the Pitch” – so I went along expecting to hear about how to pitch and make a good pitch in front of an audience etc. Actually, the day was more focused around the idea of “Premature Pitching”, and we took a step back to look at the work that needs to go in beforehand, to make sure your idea is ready to pitch and that you’re positioned as best you can be in the run up. This was much better! I don’t really want to hear about timing techniques, presentation skills and tricks just yet thanks, I’m still at the stage of working out what the heck my idea is and what my next steps are going to be!
So, some of my notes:
In the beginning, all Entrepreneurs have – an idea! We may have many, or maybe just the one. Is it any good? Time is precious to us and we really can’t afford to be wasting it developing half-baked ideas. If it’s a fundamentally bad idea – kill it quickly and move on. There’s always another idea lurking in your head somewhere. I try not to get too hung up on any one single idea, at least not until it’s seems to have legs and other people are validating it or pushing me to “get on with it!”
What is a pitch anyway?! It seems everyone has this pre-conviction that it has to be all about selling your idea, as fast and as aggressively as you can. Oh no no, that’s a dangerous misconception! The purpose of the pitch is not to sell, but to communicate! Communicate your idea, what your product or service is about, where it offers value and improves people’s lives. If you’re ‘pitching’ in the traditional sense, to investors or potential business partners and the like; then you need to also be communicating your business plan – the way in which you are going to build this product/service, bring it to market, and ultimately your revenue or business model.
Two things to Pitch:
- Product / Service
- Plan (Business Plan)
“A venture evolves, conversation by conversation.”
We then took some time to delve into where your offering is positioned within your target market. This kind of analysis is key to identifying the strengths and weaknesses of your product/service, where it sits in an existing market, and can really tease out fundamental issues before you take your idea in front of an investment panel! It’s much better to face into these things now, rather than let one of those dragons pin you down and pull you apart with it later on!
One interesting trail of thought, and one which I’ve heard before – is that it’s better to be the market leader in a smaller / more specific market segment – than trying to cater to too broad a market (segment).
Are you “connected with a channel to market?” – this is an impressive attribute in the eyes of an investor. By this we’re talking about whether or not you/your founding team has already identified and built relationships within your target market – with distributors, partners, customers etc. which will prove critical to bringing your product to market. Doing this well, and doing this early is often a vital to your success.
How do you find out the value / importance of a brand? – By Analogy – look at other similar companies in the market (and compare to their successes) etc.
“Four Faults of the Venture”. This is a graphical means of mapping out strengths and weaknesses of your idea by looking at micro, macro, market and industry trends:
1) Market Attractiveness:
- Size (of best segment)
- Current growth
- Future growth (trends)
- >> “Why, & Why Now?”
2) Will they really buy it:
- Itch or pain?
- Behaviour change?
- Decision making
- >> “What did customers tell you?”
3) Industry Attractiveness:
- Scarcity (of your ‘bit’)
- >> “What’s the margin?”
4) Competitive Advantage:
- Market research for others?
- Retain margin?
- Maintain lead?
- >> “Why won’t Google kill you?”
“3 Faults of the Team”. As per ‘4 faults of the Venture’ – but for mapping out strengths/failings of a business according to its core team:
1) Is there a strong mission, work ethic within the team and an appetite for risk?
2) How well connected is the team? Will they be able to leverage their existing network to aid in the successful development and launch of this product?
3) Are the team able to execute and deliver upon key factors of success?
- Every opportunity is a hypothesis
- “Test rather than sell”
- “Defining & Testing the Hypothesis” > A.K.A. > “Market Research”
- “Learn fast, learn cheap – as well as; fail fast, fail cheap”.
- Look for / develop an SCA: “Sustainable Competitive Advantage”
(Market research) – “Why do it?”
- To predict whether customers will buy your product (perceive the same value as you)
- Fresh, informed insights on features/design
- Discovering new sources of value(s) (applications, revenue etc.)
- Question to pose to investors: “What would need to happen for you to invest in this?” “Why wouldn’t you invest in it now?”
- Proof of concept – that you can make the thing work, not that you can package/market it.
An Entrepreneur Is:
Someone who jumps off a cliff, hoping to assemble a parachute on the way down!