On the weekend I attended the inaugural Startcon in Sydney – the largest Start-up conference in Australia.
It had speakers from Alibaba, Uber, Twilio and more. Kind of a big deal for all us start-up nerds. The one presentation that stood out from the rest was by the Silicon Valley VC Bill Reichert. So thought I’d provide a quick summary of his talk.
After being pitched thousands of times over the years, Bill believes most pitches suck. Not because they are inherently bad businesses, teams or ideas, but because their value proposition isn’t communicated succinctly.
According to Bill, the elevator pitch is dead. Reciting a block of text that details the what, how, why, who and where of your business is just too mechanical and won’t draw interest. Instead, focus on introducing your business within 20 seconds and engage three parts of the person you are talking to:
1) The brain
Most pitches typically revolve around engaging just the brain of investors. They think ‘”if I present all data logically, provide projections based on a sound business model and use the latest market research to validate the size of the market, surely everything will just click in the investors mind and they will hand over the cash?” Wrong.
While using data and logic is necessary for any successful pitch, according to Bill, it’s not the most important element. Humans are not logical creatures, we are governed by emotions – even the most stone cold VCs are deep-down emotional beings. Therefore to really cut through the clutter you have to activate emotions. The brain is typically used retrospectively to rationalise why you like a business and to convince others to get onboard. However, Bill advocates using one or two numbers to convey value proposition and are punchy and memorable.
2) The heart
Bill believes the heart is the most crucial part to activate when communicating your idea or business. This is the deep visceral force that drives many of our decisions. The heart makes a pitch compelling, tells a good story and gets the listener to empathise. A perfect example is the winning pitch from Startcon, Uprise – which is a platform for mental wellness programs. The pitch started with the current inaccessibility and plight many mental health suffers have to endure. It resonated deeply. There were no stats, or graphs, just the mission to lend a hand to real human suffering that made the pitch so effective.
You’re probably wondering how you can fit all in this in 20secs? Well, you need one sentence that encapsulates the pain point or frustration that really pulls at the heart strings. One tactic Bill mentioned was starting with “imagine if…” when explaining your concept.
3) The gut
The final part that must be targeted is the gut. This is whether you are perceived as credible or trustworthy. Bill was not subtle on that fact that most entrepreneurs embellish their projections and capability. One memorable moment Bill recalled, was when a he sat through an hour of a relatively dry pitch, on to find out at the end that the founder was a Noble Prize winner! If it was known at the start that a Nobel Prize winner was pitching, this would have added much more gravitas to the rest of the presentation.
Bill strongly urges that you highlight any credentials, big partnerships or renowned team members at the start. If you’re teaming up with a massive brand, tell people earlier. The social proof this brings will help reassure any investors.
After going through the three elements of human decision-making, Bill went on to outline his framework of effectively communicating your business in three steps.
Step 1 – Provide a clear statement of what you do better than anyone else. Bill emphasised using ‘simple techcrunch language’ – which means minimise jargon but don’t patronise.
Step 2 – Outline your compelling benefit (cue heart strings!) and who do you offer it to? This is the big idea behind your business. Bill recommends only having 1 clear thing you do amazingly better than everyone else
Step 3 – Clarify differentiation. Specifically say how you differ from your competitors to shut down any hesitations or alternatives the investors might be thinking.
By adopting this mindset and framework, you’ll have a great response to “so what do you do?” at your next seminar and conference. And remember you only have 20 seconds to make an impression.