The Two Worst Pitching Mistakes
As a frequent business plan contest judge, angel investor and sponsor of local efforts to encourage startups, I've seen a lot of pitches. Every startup and most ongoing businesses should be able to deliver a decent pitch -- a few minutes and a few slides -- at a moment's notice.
There's a lot of good advice available on how to do a pitch. However, there is a dearth of information about how not to pitch. Aside from the obvious warnings about boring bullet points, there are two fatal errors I'm seeing pretty frequently these days.
Here are some things to consider to avoid making the two worst pitching mistakes:
- It's not about you.
Understand the pitch as a medium. You do it for the viewing pleasure of the audience, not for yourself. It's about what they want, not what you want. You have to be inside their head, not your own. Call it empathy. Call it walking in their shoes or seeing things through their eyes.
When you pitch investors, for example, see it from their side. They're trying to guess the odds that a check they write tomorrow will generate lots of money in the near future. They want to know that you understand that. You talk about your management team because experience reduces risk. You talk about exit strategies because investors make nothing without the exit. You talk about market size, defensibility and scalability because that generates more money on exit. Way too many pitches just summarize the business, proudly, without focusing on what investors look for.
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Apply the same principle to pitching for a strategic partner, a customer, a bank or a business plan contest. Figure out what the audience wants to know. Customize for the listener. Focus. Answer the right questions, the ones your audience wants answered, not the ones you want asked.
- Never pitch without a plan.
Pitch and plan are like movie and script: You don't do one without the other. The pitch summarizes the plan in a different medium. It's an output of the plan, optimized for the medium and the audience.
One of the biggest crocks in the business buzz lately is the idea that people do a business pitch instead of a plan. This seems obvious to me, if it weren’t for the flow of "pitch, don't plan" suggestions from people who ought to know better. In most cases, they're misunderstanding what a plan is, confusing it with a different output -- the plan document. The plan is what's going to happen, not the pitch or the document. It's a collection of related concepts and numbers, including strategy, milestones, target market, business offering, business model, sales forecast, expense budgets, cash flow, milestones, tasks, responsibilities and metrics.
Don't kid yourself: You can't describe your business without knowing how much money you need, what you're going to spend it on and why. You have to define a target market and explain your rationale. You have to estimate sales and the cost of sales. You have to develop a strategic focus. You have to know the milestones you need to hit and the important metrics behind them. And all of that, whether you have it printed out as a document or not, is the plan.
Ironically, where pitching without a plan hurts the worst is when your pitch is successful, because at that point, two things happen:
- When the pitch works, most (not all, perhaps, but most) investors then want to see the plan it was built for. We want to see the summary numbers, such as unit, headcount and expenses. We want to look at the reasoning behind the strategy, the lay of the land, the metrics. What the pitch summarizes, we want to see in detail.
- Investors will almost always suggest changes. What would you do to have faster growth, and what would happen if it went slower instead? Could you do it with fewer people or less money? Can you accelerate the pace of reaching the major milestones? And if you don't have a plan to run back to, tweak, and then review with changes, you're not credible.
In the end, it’s about understanding the medium and the context. Pitch presentations have a special purpose: to summarize your business plan. Show the highlights. Optimize the tool for the medium and the audience -- busy people who want to get the heart of it quick and easily.