I recently witnessed an utter disaster when I helped a startup make a pitch to an established multinational firm.
Members of the startup team thought they knew what the corporation wanted but they didn’t. They delivered a generic presentation, a rather canned pitch to a room of company executives. There was no indication they understood the audience.
Even worse, the startup team couldn’t think outside their own box, their own business strategy. One of the corporate executives tried to explain that his firm had a market that the startup couldn’t address alone. The executive suggested that his company's sales force could quickly drive more revenue for the product through a reseller agreement.
The startup players failed to understand the concerns and needs of the executives and that deal became a casualty of miscommunication. It didn't need to be that way
If a venture capital firm offers to introduce you to a potential business customer, make sure you do these eight things before going to the meeting:
1. Prepare for your meeting. Global 2000 companies are not likely to spend money if they feel you don’t understand what keeps them up at night. Put yourself in their shoes. Anticipate the difficult questions and come prepared with answers. At a minimum, you should:
2. Understand the targeted industry. The metrics used to measure innovation vary among different businesses. For example, enterprise IT businesses, tend to prioritize efficiency, so niche products are OK. For financial services organizations, a product has to support millions of customers; if yours can’t scale, they aren’t interested. And before a pharmaceutical company even considers your product, you’ll have to prove it can function in a highly regulated environment.
3. Comprehend the players involved. Venture capitalists focus on executive relationships. Tailor your pitch to the audience. For example, C-suite executives will focus on strategic issues. So unless you want them to tune out immediately, don’t get into the technical details of your software. Save that discussion for the engineering teams.
4. Be familiar with the adoption cycle. Too many startups pitch everybody. Be selective. Understand how the industry views innovation and the appetite for risk. Ask your investors for help with the right alpha and beta customer engagements. Prequalify those who are disposed to buy early and can help build momentum. When your product has matured, have that list of late adopters ready.
Related: Closing My First Big Deal
5. Request feedback early on. You may have a great product but it might not be the right fit. Or it might be better if you prioritize certain features. Don’t be afraid to ask for feedback and don’t wait until the end of the pitch. After a preliminary sketch of your roadmap, stop and ask for feedback. If you’re willing to make some adjustments, you might close a deal.
6. Be ready to shift gears. Just like the quarterback who calls out a new play when the opposing team changes its stance, be prepared to discard the slides and shift the discussion. Have a genuine conversation. It could open up opportunities you hadn’t considered.
7. Have your credentials ready. When a venture capital firm introduces you to a potential business customer, it is largely based on your startup's credibility. Understand how a customer expects you to prove your credibility. For example, financial services firms will want to see that your product has worked at a large bank. Be ready with references who will sing your praises.
8. Plan ahead. Ask for a nondisclosure agreement before the second meeting. The formality of the document will acknowledge that the procurement team sees this as a solid opportunity. Before leaving, identify the owner of the next meeting and continue to take this proactive approach throughout the sales cycle.