Pitching your startup idea can be very easy and straightforward if you know what the investors want to hear and what you need to try and avoid. As with all startups you need to begin with the problem and not the solution. Your problem should be pretty large and there must be an urgent need to solve this problem.
Kevin Hale was a Partner at YC and cofounder of Wufoo, which was funded by Y Combinator in 2006 and acquired by SurveyMonkey in 2011. He was responsible for Wufoo’s much-admired design and did a talk on how to pitch your startup, but from the investor’s point of view. Knowing this is very important because you can understand what the investors are looking for and how to get them interested in your idea.
The biggest mistake most startups make when pitching their idea is they try to sell their startup to the investor. Investors are really good at selling themselves and all they are looking for when hearing about your idea is, do I understand it? Am I excited about it? Do I like the team and do I want to work with them?
Your goal is to be clear. The investor will do everything else. The main reason you need to be clear is that a clear idea is a foundation for growth. Another reason is all good startups grow by word of mouth. Word of mouth means people who have heard about your company start telling other people about your company and it starts to spread. This is only possible if you make your idea easy to understand. The way you make your idea easy to understand when pitching it is to make it legible, make it simple, and make it obvious.
There are a few things that you need to try to avoid which will make your pitch unclear to listeners and your idea hard to understand. They are ambiguity, complexity, and mystery.
These will cause people to have to ask questions about your startup and your idea. If investors have to start asking questions it causes them to be unable to start thinking ahead and get excited about your idea because they don’t fully understand it.
What you wanna do is be conversational. A great pitch is one where you can tell it to someone who has no idea about the industry and they get it and understand it. This allows you to present your idea to the largest possible audience and also helps with growing your business through word of mouth.
The last thing you need to make sure of is a big one. Your idea must be reproducible. This means the investor must be able to imagine it in their mind. They need to have a picture in their head of what your company does so that they can start asking the right questions and vision of how your company is going to grow. To make your pitch reproducible, there need to be 3 nouns present in the pitch. The first one is what are you making? Second, what is the problem? And then the last one is who is the customer. If you can answer these 3 three questions while still being clear and concise, you are on your way to a very good startup pitch.
Important stuff:
Do’s
- Begin with the problem
- Be clear and concise
- Make your idea easy to understand
- Make it legible
- Make it simple
- Make it obvious
- Make it conversational
- Make it reproducible
Don’ts
- Don’t try to sell your idea to the investor
- Avoid ambiguity
- Avoid complexity
- Avoid mystery