The 5 Biggest Startup Pitch Mistakes (and how to avoid them)
THE MIAMI TECH SCENE IS OBSCENE
Tech investors, early stage startup founders, Pitbull, Shark Tank’s Kevin O’Leary, and the Mayor of Miami were among the attendees of the eMerge Americas conference in Miami Beach this month. This conference has grown at least 5x since I first attended in 2017 when there was zero buzz and they were actually giving away tickets to get people to come.
In 2022, Miami is pitching itself as the new “Capital of Capital”, the Mayor’s tweets are going viral, and billboards in San Francisco and New York City invite tax-burdened businesses and tech people to Miami.
Aside from getting to say OG Miami expat (moved here in 2016), one of the biggest benefits for me and other business owners was getting to see the pitches. Over the two day conference, my wife (and business partner) and I heard 30 pitches from startups that were selected out of 1,000+ original entries.
THE MOST COMMON MISTAKES
1) Sharing the product without sharing the story
One founder raved that with their savvy app, users without any editing or design skills could craft professional looking, interactive social media content in minutes. The company boasted 20 million active users and was growing by the day.
Despite the number of users, however, the judges and audience didn’t seem to connect with the idea. The reason why became very apparent with the next speaker, who devoted half of his pitch sharing the story of his mentally challenged son and why he was inspired to create a special education teaching robot.
The crowd was deeply touched, and his company made it to the final round.
At our core, humans are deeply emotional creatures. When you’re able to arouse powerful and positive emotions in people, they will then associate those emotions with you and what you offer. You cannot skip this step.
Takeaway: Get people to connect with your story, then they will connect with your product.
2) Sharing the solution without sharing the problem
One proud founder of a task-delegation app dove right into the features and positive market feedback he’s received so far. The app seemed useful and the feedback was great, but the judges didn’t seem impressed.
They were missing the big “WHY”. Why do we care?
What’s the pain in the ass problem that lots and lots of people will pay to have it solved?
THIS NEEDS TO BE SHARED FIRST because your audience will be distracted thinking about this while you are busy discussing your solution. Sharing the problem later in the pitch won’t work either. This founder attempted that after the judges asked, but he had unfortunately already lost his shot. That’s why they call it an elevator pitch, you have to nail it the first time.
Takeaway: Sell the importance of the problem, then sell your product.
3) Sharing in the wrong order of importance
Investors aren’t going to care about your “industry leading” founder and advisor team until they believe your product will be successful. They won’t know if your product will be successful until they believe it’ll solve a valuable problem.
When crafting your pitch, it’s critical to ask yourself WHAT DECISIONS DOES MY TARGET AUDIENCE NEED TO MAKE AND IN WHAT ORDER? They’re going to be asking themselves questions during your pitch, and if you answer all of them, but out of order, that can hurt your chances.
Spend too much time on the product features without appropriately proving the problem is valuable and worthy of solving first? You’re toast.
Talk about your impressive sales before convincing them that the TAM (Total Attainable Market) is big enough to sustain long term growth? Game over.
Share how many investors are interested in your product without first sharing your intellectual property patents that will protect you from being copied and squashed by the massive competition? No chance.
The third pitch sadly did not have a patent, and Mr. Wonderful said the huge competitors in his market would take his concept and “squash him like the cockroach he is”. Remember what happened to Snapchat after Instagram stories launched?
The truth will make you feel like shit, but then it will set you free.
You have to nail the order, otherwise the lingering unanswered questions will distract the investors from hearing anything else you have to say.
Takeaway: Know what your audience cares about most, then deliver your pitch in that order.
4) Trying to solve many problems without solving one
Your product can actually solve many problems, but you need to focus your pitch on one problem first. If you come out of the gate talking about all the markets your product can serve and the multitude of problems it can solve, it can come across as unfocused and spread too thin.
One company pitched a financial education platform for Hispanic people living in the US. It offered debit cards, 101 courses on budgeting, insurance products, books, learning events, and cryptocurrency investing. The founders had a great mission to help immigrants and first generation Hispanic people learn and thrive in the US, but unfortunately they seemed to overwhelm from the very start.
It can be effective and inspiring to paint a picture of the future world that is positively impacted by your product and mission, but it’s also important to survive long enough until you can get there.
The way to survive is by solving one pain point at a time.
This isn’t just early stage startups by the way, remember when Wework bought into the wave pool industry in 2016? In an interview on Adam Grant’s podcast WorkLife, entrepreneur and investor Dan Martell said “companies don't die from starvation, they die from indigestion.” As with larger companies, startups should beware not to bite off more than they can chew.
Takeaway: Keep your problem and solution simple, then dominate the larger niche.
5) Being too serious
Many founders seemed to believe that pitching their product in a serious demeanor would give them an edge. Some people get serious when nervous, that’s understandable. But if I’m an investor evaluating a company, I want to see that the founders enjoy what they’re doing, a lot.
There are undoubtedly times when founders get stressed out, worry about the future of the company, and/or begin to question their life choices (anyone relate?). That’s a given, so how are they going to respond in those situations? I want to know that they smile, find a way to have fun along with the craziness, and keep going.
I tell my coaching clients this all the time, “you can get serious shit done without being so serious all the time.”
When they realize that growing their business can not only be fun, but is also a competitive advantage, the entire game changes. Imagine if your next business breakthrough came from your attitude, not from grinding harder? I see it all the time.
Finally, the founders are not only building a product, they are also building a company culture. What kind of culture will their attitude create? There’s the Steve Jobs “benevolent asshole” approach and there’s the Gary Vaynerchuk “candor with kindness” approach. Culture massively determines the talent you attract and retain. Where would you want to work?
Takeaway: Have fun and enjoy delivering your pitch, then go in for the kill.
What would you add to this list? If you’re stuck with anything related to your business drop me a comment or an email and I’ll answer you right away.
That’s all for now, let’s go!
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