A startup pitch is usually your five minutes of glory that can help you attract the investors. Pitching your startup to them is often the only time you get when you are a first time founder and the investors don’t know you. They, on the other hand, hear a lot of pitches and you are “only” one of the many founders they have seen. It’s not a good starting position. But if you avoid making the mistakes that most less experienced entrepreneurs make, you increase your chances with the investors significantly.
I’ve pitched to the investors directly or on the pitch contests, on hackathons or to get to a startup accelerator. The follow up questions are often very similar, especially if you make the usual mistakes that almost everyone else makes. Don’t forget that your pitch is a very powerful tool that can make it for you as well as break your neck. So even when product is really good and has a good potential, show that you understand it very well. In order to do so, avoid the following mistakes when pitch:
1 – No validation with potential customers.
Don’t consider yourself (and maybe friends and family) as a good sample group for feedback on your idea. Don’t believe that if you like something, everyone else would. You need to validate with the real potential customers that don’t have any relationship with you. Your startup pitch needs to be about your customers, their problems and your solution for them.
2 – Speaking too much about the solution instead of the problem that the startup is solving.
Don’t speak too much about the product and its features. Instead, focusing on explaining the problem that you are solving and the value you are providing to the customers. Think of something like “we allow people to quickly and easily find a ride or taxi” instead of “we have a mobile app that tracks your location, allows you to enter a place where you want to go and then pick a car that takes you there”.
3 – Not understanding the industry and business case.
Many founders start the startups in the industries that they don’t know anything about. Many founders don’t even bother to find advisors or mentors who help them better understand. Because they are focused on their particular solution, they don’t do almost any research on what the potential customers really need and therefore what are they going to pay for. Eating at a restaurant doesn’t make you a specialist in gastronomy and loyalty programs. You get what I mean? One or two simple questions from the investors and they know that you have almost no idea about the industry you are entering.
4 – Not practicing the startup pitch well enough.
If you address all of the above, there is still a chance that you lose your chance fairly easily. I’ve seen so many founders pitched so poorly that the audience (investors and everyone else) was getting bored 30 seconds after they started. Don’t think that you are an exception. Keynote speakers prepare their presentations for days and practice for hours. You sometimes don’t have that much time, especially when you are on a hackathon. But you should still find at least one hour for practicing the pitch delivery and either take video of yourself while practicing or have someone to give you feedback. Or, ideally, both.
BONUS: Focusing on wrong goals with your pitch.
What do you think happens when your five minutes of glory are over and the investors ask you some questions? No, they aren’t going to give you a check and invest in you. They often forget about you because there were many people before and many people after you. With this short initial pitch, you should have only one goal and it’s to attract the investors to my idea. I want them to know more about it and ask for the second meeting.
I was guilty of each of them before. How about you?