As an entrepreneur, the ability to clearly articulate in layman’s terms what your business does and how it makes money is a critical skill every entrepreneur needs in their toolbox.
While some might say the ultimate expression of this is the formal investor pitch, I would say that as an entrepreneur, you are always pitching your business. Every sales call, networking introduction, employee interview, and really, almost any first-contact communication is a type of pitch. If you can do those things well, you can probably pitch well, and conversely, if you improve your pitch, you probably improve your ability to communicate about your business in those other scenarios.
Why Practice My Pitch?
Honing your pitch can be a way to accelerate your business plan. Bunker Labs alumni Beth Fynbo participated in regional pitch competitions to fund her launch of her Busy Baby brand. This culminated with an appearance on the World Series of pitch competitions, Shark Tank. Not too many years back, Beth was sitting in a similar position you might find yourself in, she had a business idea and heard about a pitch competition. So how did she get from there to where she is today with a multi-million dollar revenue business?
Coincidentally, Bunker Labs has also joined forces with USAA to support their 100th Anniversary Pitch Competition which is accepting applications through July 2022. There’s never been a better time to review your current pitch and brush up on some pitching basics.
Learn how Beth Fynbo, founder of Busy Baby, used pitch competitions to kick start her multi million dollar company.
Bunker Labs Can Help
So, what we’ve done here at Bunker is build a series of articles to get you up to speed and ready to hone and give that pitch. Be sure to check back in with us over the next year, as we’ll be releasing the following articles:
- Pitching 101: The Pitch Lengths and Vocabulary
- Pitching 102: What Goes in the Pitch?
- Pitching 103: The Leave Behinds
Extra Credit: USAA 100th Anniversary pitching competition Pitching Coach Chris Carlson offers some pro-tips!
For more advice on pitching and building that all-important pitch deck, check in with the Transition Podcast Episode 31, where host Mike Steadman interviews William Lutz on the subject.
You’ve Gotta Pitch Your Business
There are all sorts of reasons why you might be called upon to pitch your business. Maybe you’re pitching to prospective investors to help you launch or expand your business. Maybe you’re pitching as part of a pitch competition, or maybe you’re pitching to another company hoping they’ll become a client or even a partner. You might even be at a networking event and get put on the spot to explain your business to a small group.
When’s the last time you did any real public speaking?
Fear of public speaking (or glossophobia) is common, and believed to affect anywhere from 40-75% of Americans according to various studies. Even if you wouldn’t consider it one of your top fears, there aren’t many people who find it enjoyable. So, if you’ve avoided it as much as possible, that’s entirely understandable. Unfortunately, if its time to pitch the business, you can’t keep hiding from it.
In my experience, the best way to overcome fear is a large serving of knowledge and practice, combined with having a well-rehearsed, but flexible plan.
Good News, You’re an Expert
While the idea of giving a formal pitch presentation might make some of us break out in a cold sweat, it’s important to remember that there is no one on the planet more qualified to pitch your business than you. There is no one who knows more about it, cares more about it, and wants it to succeed more than you. You are the best person to pitch your business.
The person or people you’re pitching to? They might know some things about business or even your business sector that you don’t, but I promise they don’t know more about your specific business venture than you do. You possess absolute mastery over that knowledge. So, it if helps to alleviate your nerves, just remember you’re the one source of truth and information, and you’re simply there to share your expertise with an interested, engaged audience.
What is a Pitch?
A pitch is a story you tell about your business that persuades listeners your business has a successful future.
Usually, this is done by telling a story in three parts. Part one illustrates the value proposition of your product or service. Part two shows the size of the market willing to spend money on your product or service. And finally, part three reassures the audience your business can capture and service that market. Need more information? Pitching 102 is going to expand on each of these parts in fine detail, so keep an eye out for our follow-up soon!
So before we talk about what goes in the pitch, I wanted to define the different types of pitches. Pitches are usually organized by length of time, and the elevator pitch, quick pitch, and full pitch describe the three most widely recognized pitch lengths. However, the reality is you’re going to have all sorts of lengths depending on the specific circumstances. And in some cases, you might start out with an elevator pitch that results in the audience asking to hear more, in which case you might transition straight into the quick pitch or even your full pitch.
So, while we label pitches by different lengths, understand pitching is a dynamic event that grows and changes with your business quarter to quarter and your audience minute to minute. That said, there are three recognized pitch lengths we talk about to give you a vocabulary for having discussions about your pitch.
The Elevator Pitch
The elevator pitch is a thirty-second version of your business pitch, the idea being you could reasonably perform the entire pitch over the course of a ride on an elevator. The main feature of the elevator pitch is that it is simple, to the point, and easy to memorize.
Great elevator pitches can even work like icebreakers, and might serve as cold openers for your sales department. Your elevator pitch might find its way into the about section of your social media and web pages for the business. It might serve as a starting point for constructing ads. What I’m trying to say, is that the elevator pitch might be the most important paragraph of words you ever string together for your business. Draft it, practice it, and hone it over time so it delivers most effectively.
The average human can clearly speak and comprehend about 70 spoken words in thirty seconds without rushing. That means the elevator pitch has about three to four sentences to sell your business. The best way to formulate this is to have one sentence each about your problem, solution, and product, or basically outlining the first part of your quick or full pitch, illustrating the value proposition of your product or service.
For instance. “Have you ever gone to leave the house and your phone has less than a 5% charge? What if there was a way to always be charging your phone without constantly plugging and unplugging it as you move around the house? We’ve developed a universal magnetic charging countertop surface, with aesthetic options priced comparable to granite! Set your phone down on our counter, and it’ll automatically start to charge!”
That’s all there is to an elevator pitch.
Sentence 1: Ask a “Have you ever” question.
This question needs to clearly outline the problem your product solves in a way the audience can empathize with or relate to.
The more universal you can make this question, the better, but if your audience just isn’t a representative of a target customer, you can change “have you ever” question to a “have you ever seen” question, removing them one step from the equation. Or, you can just make a statement of fact instead. Another option is to use a personal story where this problem happened to you. Any of these variations can work to tailor the elevator pitch to a specific audience.
For instance, if your company makes a product for infants spitting-up after feeding, and you know your audience is a potential angel investor that doesn’t have kids, instead of saying “Have you ever taken your baby out only to have them spit-up all over your shirt”, you might instead say “Have you ever seen a parent rushing to get their children organized to have the baby spit-up all over their shirt”, or “Babies spit-up constantly, and any parent will tell you, it always seems to be all over their last clean shirt right before they need to make their best impression”. Making it personal might be “Two years ago, I was watching my son Jack and getting ready for my most important meeting of the year. I was holding him and wouldn’t you know it, he spit-up all over my best shirt.”
Sentence 2: Give a “What if” statement about your solution.
The second sentence presents how you want to solve the problem brought up in the first sentence. This sentence shouldn’t bring up your product yet. Having a low phone battery when you’re about to leave the house might get solved in any number of ways. We might have made a longer-lasting battery, a portable battery, a charging placemat, a rapid charger, or any other number of other ways to approach the problem. This statement informs the audience which of those approaches your product is going to take.
Sentence 3: Sell your product or service with a “We’ve developed a” statement.
Finally, you introduce how your business has a product or service that solves the initial problem in the way your solution statement outlines. Take a sentence or two to outline your company’s flagship product or service, and how it works at a high level.
If this seems familiar to you, it’s because every single infomercial uses this formula.
“Have you ever struggled with X? What if there was a way to stop Y? Now you can with product Z!” has been used to sell anything from housewares, lawn care, exercise equipment, and just about anything else you can imagine. While the delivery in infomercials might have a cheesier tone than you want to use to represent your business, the fundamentals are sound, and it’s one of the most effective ways to construct an elevator pitch or a 30-second ad.
The Quick Pitch
The quick pitch is usually about 5-10 minutes long. You’re getting into some details, but you can probably still do the pitch without a slide deck. The quick pitch is a common pitch length for pitch competitions or early meetings with potential investors screening a lot of candidates. It’s also the sort of pitch you might do over the phone or in a video conference. You’re sticking to the most important points, spending 1-3 minutes each on the following categories (which are explored in more depth in Pitching 102, coming soon!):
Part 1: The problem, solution, and product/service (your elevator pitch, effectively)
Part 2: Your ideal customer, market, and competition
Part 3: Your business plan and team, your go to market plan, any recent traction, and your ask of the audience
It’s a lot to cover in a short time, and you want to refine your quick pitch so you’re hitting the most important and most simplified versions of each of these categories without rushing your rhythm of speaking. The most important things to consider for a quick pitch are clarity and simplicity. If something is too complex to explain in the time given, zoom out a little and talk about it from a bigger picture perspective. Save the serious nuts and bolts minutiae for the full pitch and for answering audience questions.
The Full Pitch
The full pitch isn’t structurally all that different from your quick pitch, you just get to spend a lot more time on each subject. Full pitches can run from 20-60 minutes, and are usually reserved for meeting with potential investors who have already heard an elevator or quick pitch and want you to elaborate on the details of how your business works.
You should try to tailor your full pitch to the audience. That means doing some research on the person or people you’re pitching to ahead of time. The easiest way to tailor your message to a specific investor is to find ways to compare your business with a previous successful investment they’ve had. You might also reach out to the entrepreneur that led that successful venture and ask them what worked in their pitch to that investor. There might be some specific thing that investor really looks for or asks about that you’ll want to have in your back pocket.
The full pitch should almost always have an accompanying slide deck to give some support in the form of bullets, graphics, and charts. Just make sure you don’t fall into the trap of reading the text of your slides aloud and calling that a pitch. A good slide should summarize the key points and provide supporting evidence, but it shouldn’t be a wall of text you read aloud.
It’s also a good idea to have scripted answers on-hand for frequently asked or expected questions. Some investors have the same 2-3 questions they always ask, and you can prepare ahead of time. Sometimes you can even craft a pitch to lead an investor to ask the exact question you want them to ask. Having a series of questions and answers printed out in a quick-reference format ahead of time can be helpful.
The world of pitching is almost its own subculture, complete with its own vocabulary you might not be entirely familiar with. Below are some of the basics.
- Angel Investor: Also known as seed investors or angel funders, these are usually high net-worth individuals looking to invest in business ventures in the early stages, often in exchange for part ownership equity.
- Business Plan: This document outlines how your business is organized and operates. It shows market research, outlines chosen strategies for going to market, lists products and services, costs, profits, and more.
- Competition: Other businesses that currently have a market share in products purchased to solve the same problem your business solves are your competition. Note that the competition might not sell the exact same type of product or service your business does. Competition is good, though, it shows investors there is a viable market.
- Elevator Pitch: A 30-second version of your business pitch
- Executive Summary: A 1-2 page document summarizing the content in your business plan. Usually the first couple pages of your business plan.
- Full Pitch: A 20-60 minute pitch that explains your business operations in great detail.
- Go To Market: A marketing and/or sales strategy, complete with significant levels of detail beyond “social media advertising” or “cold calling”.
- Ideal Customer: A hyper-specific type of individual that you and your business can reach with its go to market strategy. For pitches, the more narrow and specific this person is, the better. The ideal customer might have a specific age range, gender, profession, geographic location, hobby, eating habits, or any other imaginable demographic. The more you can narrow it down, the better your go to market strategy can target customers and find success.
- Investor: Someone willing to give your company money to grow or launch in exchange for stake in equity/ownership.
- Leave Behind: A physical thing (or perhaps a digital thing) left behind with audience members after a pitch. Often just a business card, but it can include business plans, executive summaries, slide decks, and more.
- Pitch Competition: An entertainment event where business owners give their pitches to a panel of judges to either earn an investment offer from a judge or win grant money. There are countless pitch competitions nationwide every year, from small local events to massive national competitions.
- Quick Pitch: A 5-10 minute version of your pitch, common to pitch competitions.
- Serviceable/Obtainable Market (SOM): Sometimes abbreviated SOM, this is the smallest subsection of the Total Available Market (TAM), and is also a subset of the Total Serviceable/Addressable Market (SAM). The SOM is the market share you can realistically capture within the SAM during a projected period of time.
- Slide Deck: The digital slideshow that accompanies most pitches. Slide decks can also get printed out as pamphlets, binders/folders, or posters.
- Total Available Market (TAM): Often abbreviated TAM, this is the biggest market number that estimates how big the entire industry is. So, if you were selling orange juice, you would give the total annual market size for all orange juice products, fresh, frozen, powdered, all of it, all over the world.
- Total Serviceable/Addressable Market (SAM): Sometimes abbreviated SAM, this is a smaller sub-section of the Total Available Market. The SAM is the segment of the market targeted by products and services currently offered by your company, in the geographic area you can presently reach, as if you had captured 100% of what that market is. The realistic subset of this market your company is hoping to capture is known as the Serviceable/Obtainable Market (SOM).
- Traction: In terms of pitching, traction refers to any big wins your business has recently enjoyed. This might include reaching milestones, customer testimonials, key hires, or any impressive growth or statistics that show business is headed in a positive direction.
Practice Your Pitch
The next step is to apply this knowledge to your pitch, and perhaps sign up for a pitch competition. One great option is the USAA 100th anniversary pitch competition, where one business will take home $100,000 in funding. Apply today and hone that pitch!