Too many pitches are boring.
Boring pitches are the weak link in Startup communication.
I applaud anyone who listens to pitches full time. They’ve got to have a special talent for staying awake. I attend all kinds of startup Pitching Events, from competitions, to demo days and investor pitching sessions and, even though I train people to pitch well, I sometimes have an irresistible urge to check my email while a startup is pitching…
What would happen if we raised the bar and started making interesting pitches?
The best pitches discuss three elements: the Problem (P), the Solution (S) and the Benefits (B) derived from that solution.
For a startup, that could mean the following. Your customers (also known as the market) have a Problem (P). Your company offers a Solution (S) to that problem, and thereby creates Benefits (B) for the customers.
One reasonable way to start putting together a pitch, then, is to assemble these three elements into what I call the “PSB” form.
Once upon a time in pitching land…
Here’s an example using a classic children’s story:
P: “Many pigs are having problems keeping wolves out of their houses.”
S: “We’ve developed a quick new way of getting bricks to pigs.”
B: “As a result, many more pigs are alive, safe and comfortable in brick houses.”
It’s pretty straightforward and shows promise of being interesting, right?
Where it usually goes wrong.
Many startups spend most of their time describing their Solution in great detail: all the features, technology and advances that they are spending most of their waking hours making.
This is completely logical, because that’s where their focus always has been.
But, as a listener, I’m just not as interested in your solution as you are.
I am interested in how your solution makes my life better, however. I am very interested in hearing that you’ve discovered a problem worth solving.
And, if I’m an investor, I really want to know if people will buy it.
Pitch the Problem and the Benefits, with, at least initially, only a quick overview of your solution. It really should be PsB.
(And a quick tip, when you tell us about the problem, include the magnitude of the problem. It keeps us interested.)
Your audience probably has different motivations than you do. A great pitch has to make a connection between the pitcher and the catcher; you need to connect to their motivations. Without that connection, you’re just throwing words in the air.
The 3 problems in an investment pitch
Now that we’ve evolved to audience awareness, it is important to realize that there are at least 3 sets of PSB’s in
every investor pitch. I like to think of them as foreground, middle-ground, and background.
- Foreground: Your market (the customers) has a problem. You provide a solution that generates a benefit for the customers.
- Middle-ground: Your company has a problem (you need money, for example). The investor has a solution (money), your company gets a benefit (the ability to grow).
- Background: The investor has a problem (needs to invest to generate return). The market has a solution to that problem (buying lots of your stuff), and the investor derives benefit (a return).
In its most simplistic form, it’s a triangle. The investor can only get the money out of the customers via your company.
Your company can only grow via the investment. The market can only derive benefit through your company. There are 3 stories happening simultaneously.
Wait a minute
Now, stop for a second and think about who you are pitching to.
If you’re talking to investors and you haven’t addressed their problems and benefits even a little, why should they even bother to continue to listen?
That’s right, they’re going to get bored.
Pitch to the audience in front of you. (Remember in an investor pitch, the customer is the only one in the triangle who isn’t there!)
Yes, investors are interested in your product or service, but really they are interested in your business and how they are going to benefit from working with you. This is the lens through which they are looking at your pitch – the filter through which they process everything.
The primary reason that investors are even sitting in the room with you is that they have money that they want to grow. That’s the crucial background PSB to your pitch: investors are looking for a return on their investment.
You need to demonstrate your value to them, as investors. But, please don’t do it blatantly. That’ll just scare them off.
You’re going to have to flirt with them, to tempt them, to entice them.
Make the investor the hero
You do this by making it clear that the customer’s (aka the market’s) Problem and Benefits are big enough to buy lots of your Solution. This is the foreground story.
At the same time, tell the middle-ground story. Let the investors know that you have a Problem that only they can supply the Solution to. This makes them the hero in the story.
Finally, hint, and only hint, at some of the potential benefits they will get if they invest in your company. They will want to think up the other benefits themselves. Supply them with enough information to engage their imaginations.
The 3 Problems in action
Back to our example:
We start in the foreground by making the problem, and the size of the problem, clear.
P1: “In our region, 100,000 pigs per year have a problem. They can’t keep wolves out of their houses. In fact, more than 5000 pigs were eaten by wolves just last year. In order to address this, the Pig Zoning Council has changed the building code to decrease the number of straw and wooden houses. Obviously, the entire pig community needs to start building more with bricks, but the current brick distribution system is ridiculous. It takes, on average, 4 weeks from order to delivery. Imagine how many wolf attacks can happen in 4 weeks.”
S1: “It doesn’t have to be this way. We’ve developed a platform that streamlines the entire brick distribution system, potentially reducing the time to 2 days. And it’s cheaper, even with our 1% commission per brick added in.”
(Notice that we just gave a taste of the business model, as well. That’s subtly telling the investors that they are going to get the information they need.)
Now move to the middle ground, Problem number 2.
P2: “But we have a problem. We’re in beta right now, and in order to fully test and correct the platform, and in order to get it into the hands of the users, we need to hire 10 new team members.”
S2: “In order to do that, we’re going to need some money.”
You’ve already introduced the background P and S the minute you mentioned money. Hit the investors with enough of their Benefit that they can start doing some multiplication.
B3: “The average pig’s house takes around 10,000 bricks. The Pig Zoning Council estimates that 2/3 of the current houses are not solid enough to withstand a sustained wolf attack. There are also three new pig housing developments planned. Further, we’re doing market research with the Rabbit Zoning Council. They’re slightly less intelligent, but their numbers are increasing exponentially.”
Recapitulate the foreground and give us a taste of all the Benefits.
P1: “Many pigs are dying because they can’t keep wolves out of their houses.”
S1: “We’ve developed a quick new way of getting bricks to pigs.”
B1,2,3: “With your help, we can build many more brick houses, keeping thousands of pigs alive, safe and comfortable.”
“I’d be happy to show you our demo, if you’d like, and after that I’d be glad to show you our marketing plan…”
The end of boring
There is no reason to give boring pitches anymore, and listeners have no reason to tolerate having boring pitches thrown at them. (Those are the kind that knock them out from sheer tedium.)
Let’s start focusing on our audiences and what they need to hear in order to make it possible for all parties to achieve their goals.
Let’s make it so our pitches don’t have problems, but that they solve problems and benefit everyone.
Jonathan Talbott is a communications advisor for small and multinational companies, non-profits, start-ups and investment funds. He founded TIP (Talbott International Presentations) in 2012 with the ambition to make the world more interesting, one presentation at a time. Since then he has helped hundreds of people and companies improve their pitches (small presentations), which has led to a direct increase in their bottom line. He advises these same clients on communications strategy. Based in The Hague in the Netherlands, Jonathan Talbott is also the head speakers’ coach for TEDxDelft. TEDx speakers he has coached have achieved over 1 million online views.
Copyright © 2016, Jonathan Talbott