I'm going to deviate from our small business economy posts for one post because I think it will help many of you focus your pitch about your business, whether that's a new business you're designing or one you have up and running. Last night in my graduate tech feasibility course at USC, my VC in residence, Scott Lenet (DFJ Frontier Fund), brought his partner David Cremin to give the students a lesson in pitching to the needs of the investor. Needless to say, it was eye-opening for many.
Scott and David gave the students, who were presenting early stage concepts for new technology businesses, a simple formula for success. Tell us
- What your business does
- Why we should care
- How you will win
What makes these three questions so powerful is that they get you to think about the most important factors you need to get across when you have 30 seconds to make an impression and, what's better, they're easily remembered. You see, when time is of the essence (you've run into a VC at a networking event), you have no time to hem and haw about what you do and why that's important. You have to get to the point or you'll lose the opportunity. And what is the opportunity? If you successfully pitch your value proposition in 30 seconds, you may just get an invitation for further discussion and that's when you'll get to give them more information and detail your business model. For the 30 second pitch, it's all about getting their interest. It was fun to watch Scott and David respond to the students' pitches, cajoling them into modifying what was usually a very wordy, long, and often incomprehensible pitch into a finely honed pitch that got your attention.
"What your business does" takes a noun and a verb, according to Scott. Think in terms your grandmother could understand (in other words, someone not familiar with technical terms--unless, of course, your grandmother is a nuclear physicist). So, for example, "we develop and sell software for..." It's as simple as that.
"Why we should care" speaks to the compelling problem or need you're solving. Who has the pain? Why is it an important pain? Does the pain address a big market, in other words, do lots of people have this pain? One sentence will do it. "X million people suffer from life-threatening obesity and we can reach this market by..."
"How you will win" addresses the issue of why people will buy from you; in other words, how are you differentiating yourself from the crowd. What's your unfair advantage and how do you prove that? "Dr. Oz endorses our product, which will give us access to all the people who watch him on TV.." Or, 'We just signed a deal to do a test market in Best Buy's Southern California stores."
Every entrepreneur should practice the 30 second pitch. It is one of the best secrets to getting an investor, a partner, or a customer.
