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How to Pitch Your Company

• vyrotek 10y ago
  "4. What’s your unique insight?" I particularly liked this section. It felt like a new way to ask "what is your competitive advantage?" while generating a bit more insight into how the founders perceive the problem their solving.
• ScottBurson 10y ago
  > 2. How big is the market? "If you know how big the market is, you're too late." -- quote I saw somewhere Now, that's probably an exaggeration. You can probably have some idea of the size of the market before you get into it. Is it a small niche, a medium-sized niche, or potentially huge? But I wonder if you can really be much more precise than that.
  • logicallee 10y ago
    >"If you know how big the market is, you're too late." -- quote I saw somewhere I absolutely love this! Thanks so much for sharing. I've always hated size-of-market analysis. It always rings hollow. Your quote is a pretty good reason for why....
    • gumby 10y ago
      Yes, but... Your answer to this single question actually addresses a bunch of other question (i.e. it's a signifier for a question cluster): - Are you creating a new market or entering one with existing players? - Are you taking an $YB market and growing it or taking revenue from others (presumably by undercutting them) - Do you understand the motivations of your buyers (i.e. if you're selling motorbikes your customer base isn't all who need powered transport). I raised $20M for Talima without any market size projection -- but I did understand the market (aging baby boomers with disposable income who, as they aged, would need the product). The macro numbers were enough.
      • ScottBurson 10y ago
        What's Talima? All Google is giving me is a resort in the Philippines. Since I'm an aging boomer, maybe it's something I need :-)
        • a_small_island 10y ago
          I searched "Talima crunchbase" and came up with this: https://www.crunchbase.com/organization/talima-therapeutics#/entity https://www.crunchbase.com/organization/talima-therapeutics#... Not sure if that's accurate, but they have received ~20M in funding.
      • danieltillett 10y ago
        Sounds like it did not go so well. What was the postmortem.
  • endymi0n 10y ago
    Sounds like a lame-ass excuse for not even trying. Granted, if you're creating a market like Google or Facebook, it's hard to impossible. If you're doing the next AirBnB or Uber, it's pretty much on the table. If people can't come up with a realistic Market size and their reasoning behind it, 90% of the time they simply didn't do their basic homework (and usually the realistic market size is minuscule).
    • ScottBurson 10y ago
      You really think the market size for AirBnB could have been reasonably estimated when it was just getting started? Even if the founders had had some clue -- and I doubt they foresaw it getting anywhere near as big as it has gotten -- could they really have produced a convincing argument to support their estimate? We know, in fact, that there were investors who passed on the opportunity (I forget who, but I'm sure I've read this); so they, at least, weren't convinced. I do agree that the question is important to think about. And I think you should at least be able to say broadly how big you think the market might be, and explain your reasoning. And I also agree that it depends somewhat on the situation. If you're trying to create a whole new market, as you say, it's pretty much impossible; if you're trying to displace an existing player in a mature market, you should be able to narrow it down pretty well.
      • CPLX 10y ago
        Of course it could have been. Look at the amount of money spent on hotels, look at the existing VRBO type options, look at how many people travel to places, try to take a guess at trends in airfares and travel preferences. You could certainly get some sort of order of magnitude guesses together. In this case you'd quickly get to "very big" and "global" and would have a nice answer.
      • jonwachob91 10y ago
        Travel didn't suddenly increase because AirBnB, it just made it more affordable by taking from the existing pie.
        • 10y ago
  • skewart 10y ago
    I get where that quote is coming from. And there is some truth to it. But having no idea how big the market is doesn't necessarily imply that you timed things well and have a great opportunity. Market sizing should be done to set rough upper and lower bounds on who might want to buy your product. If potentially all parents of toddlers might want your product then that's awesome. But if only parents of toddlers who also have a pet fox would be interested, well, it's probably a much smaller opportunity (unless, of course, you can make the case that foxes are about to become incredibly popular as pets).
  • kriro 10y ago
    I think market sizing is a fairly valuable activity. Worst case you are forced to think about it and write down assumptions you can test. The initial guesstimate might as well be throwing a dart but you can use it as an orientation to see what direction you are way off in. Even if you feel like you're creating a new market segment (blue ocean) it can't hurt to think through it. What might the structure look like, what other market segment could be similar etc. etc. At the end of the day you're thinking about aggregated customers. Even if you think market sizing is a waste of time you still need to think about reaching customers and how they interact with one another (feedback loops, word of mouth).
• skewart 10y ago
  This is good advice not just for how to pitch a startup but also for how to pitch anything - say, a project within a company, or even yourself for a job. Obviously the market size would be more about quantifying the potential return on whatever it is you're pitching. And the one about the founding team might be more about focusing on just the most relevant factors for why the people involved are well-suited for the task. But overall these are great recomendations for making compelling pitches for any business decision.
• balls187 10y ago
  > If you’re creating a new product or space (like Slack) Weird example. Slack didn't create a new space. They created a new product that entered a supersaturated space. Pretty much any VC would balk at a company creating yet another chat application. > You don’t need to mention your GPA or that you once worked at Google. You don't need to, but it helps. ... Here is all you really need: build a good [great] product, get [paying] customers, get a little lucky. Other than the guy who got nixed from YCs HN Crowd selected funding program, it's pretty rare to have those three components and not get funding. My cynical side reads this piece as an investor giving out, what appears on the surface helpful advice, but in actuality mostly benefits the investor by making their jobs easier by streamline the pitch process, so they can more quickly evaluate deals.
  • danielmorozoff 10y ago
    Totally agree with your comment. Literally my first thought when I read the slack reference
  • vonnik 10y ago
    Streamlining the pitch process benefits everyone, because both investors and startups seeking funding have a lot of pitch sessions to wade through. Fund-raising is a long matching process, and the more you can make it like speed dating for the first pass, the better. GPA and Google on your resume is good for VCs who want to cover their butt, but it probably isn't a compelling argument for the VCs you want on your side.
    • balls187 10y ago
      By GPA, the author likely meant "name of prestigious university." Before dimissing a VC for choosing to use or not use it, I wonder what the data shows regarding whether pedigree is a good proxy for selecting founding teams for funding?
      • vonnik 10y ago
        The data may show a correlation, but it would show the same correlation to everyone, which means that the advantage of investing in Ivy Leaguers/4.0 GPA students is priced out. Anecdotally, I've seen a lot of excellent academics and skilled corporate bureaucrats from top companies have trouble adjusting to the chaos of startup life, and the demands of the product development cycle, even after they raise a great deal of money. Pedigree and entrepreneurial skills are in some ways orthogonal. In any case, GPA/Ivy League/resume trophies are a weak substitute for a product that works and appeals to people, which is the main point.
• rl3 10y ago
  >What is the ratio between what you’ve done and how long you’ve been working on it? >I want to feel impressed with how much you’ve done in the period of time you’ve had to do it. This can apply to a company that’s one week old or ten years old. You can't sustain the same ratio of work-to-time over the long-term. Barring superhuman attributes, that ratio will decrease significantly.
  • brianwawok 10y ago
    I guess it helps weed the 6 year old product that is just a landing page?
    • rl3 10y ago
      Of course. I'm talking more about cases where exceptional products are born out of early failure. There's usually a transition phase in between failure and success that doesn't involve tangible work. Sometimes it takes months just to figure out where to go next. It's much easier to refine an idea when you've been immersed in a particular problem space. Longer time frames also allow for taking a step back to think and reflect—both of which are hard to do when your head is down and you're constantly working.
• josh_carterPDX 10y ago
  Kind of piggy backing on the business model, you may not be thinking about how to monetize your business today, but investors want to see you have a theory around it. If not, you won't get their attention. We're in Techstars right now and it's something we're hearing constantly. We know we don't want to worry about monetizing the platform for the next 18-24 months, but we have to show a path to get there. Whether it's for the individual developer or small dev shops, we had to come up with some sort of answer that shows we're thinking about it today. Super helpful and it should be included in this blog post. Otherwise, spot on post!
• scosman 10y ago
  The first one, "What do you do?", should potentially be renamed "What do you do for your customers?". It took me a while to realize the importance of the distinction when pitching. Using the Google example from the article, the bad one answers "What does Google do?" and the good one answers "What does Google do for its customers?".
  • danieltillett 10y ago
    I would even refine this down more to "What do you do for your profitable customers?". Using google the answer would be "We bring targeted and motivated leads to your website".
    • pedalpete 10y ago
      At Google's early stage, would that have brought investment? At the time they would not have had distribution/market penetration, which is what the search engine does for them.
      • danieltillett 10y ago
        When Google started they didn’t really have a plan for how they were going to make money or get customers (as apposed to users)[1]. This is fine, but just be aware of this when you pitch investors. If you don’t have a plan for how you are going to make money be explicit about it. 1. Personally I doubt that Google was that clueless early on as how to make money. A better search engine is inherently valuable because of the ability to direct traffic flow to favoured sites.
    • morgante 10y ago
      No, that is a poor refinement. That statement could just as easily describe Yelp or Thumbtack. Just because Google makes its money from advertisers doesn't mean users don't matter.
      • danieltillett 10y ago
        I am not sure where I said users don’t matter, but users are not customers. Google sells users to their customers the advertisers so of course users are important to Google. If happy users gets you more customers then creating happy users is a good strategy.
• wfoweoi 10y ago
  > I want to feel impressed with how much you’ve done in the period of time you’ve had to do it. If your startup doesn't pass this test, is there any good advice on how to fix it (either for this startup or future startups)?
  • balls187 10y ago
    What is causing your productivity to be so low? Fix whatever that is, get productivity back up.
• dyarosla 10y ago
  Very similar to the general pitch process we emphasize for startups coming out of UWaterloo, just this article was a little too vague on the details. I summarized our pitch formula (with some overlap but more concrete tips) here: https://medium.com/@dannyyaroslavski/perfecting-the-3-minute-pitch-410285d971ce https://medium.com/@dannyyaroslavski/perfecting-the-3-minute...
• snissn 10y ago
  It seems like this article is written for a small group of people that recently pitched him!
• jonwachob91 10y ago
  >I also tend to value product development and customers first and other things such as fundraising or biz dev deals a distant second. Can you walk me through the difference between customers first and biz dev deals?
  • andyjsong 10y ago
    Generally, customers are a direct source of revenue. BD deals is creating channels that might result in customers/revenue. Both are important, but revenue is more important than the potential to get revenue.
• danieltillett 10y ago
  I am surprised that anyone would be against hearing genius ideas unless they mean ideas that are not really genius ideas. True genius ideas are so rare that they inherently interesting to hear about even if you don't want to invest in the startup.
• j45 10y ago
  What I like about the list is how it forces focus on how value is being created and added. Often when you have selected an idea you start looking for reasons why it will work, rather than looking for reasons to shut it down by testing that it doesn't work and instead it just keeps growing.
• agentgt 10y ago
  Somewhat analogous I believe to previous post I have seen from a YCombinator investor is basically: "Why You, Why This and Why Now?". I'm paraphrasing. I can't find the original as there are lots of copy cats (including Seth Godin [1]... intentional or not). Even ATDC [2] the very startup booster organization that did not accept us (I laugh at this because our startup is still around and successful unlike all the others they did accept). Which brings me to a great segue... you don't need a pitch if your company makes money. [1]: http://sethgodin.typepad.com/seths_blog/2010/01/why-you-why-now.html http://sethgodin.typepad.com/seths_blog/2010/01/why-you-why-... [2]: http://atdc.org/atdc-news/why-this-why-now-why-you/ http://atdc.org/atdc-news/why-this-why-now-why-you/
  • lpolovets 10y ago
    Any chance the original post you're talking about was http://codingvc.com/why-this-why-now-why-you/ http://codingvc.com/why-this-why-now-why-you/ or http://blog.asmartbear.com/five-whys.html http://blog.asmartbear.com/five-whys.html?
    • agentgt 10y ago
      No it was like 2-3 years ago. I thought it was by one of the ycombinator folks but I can't seem to google. I'm sure it wasn't the first but it was the first time I have seen the questions (since then I have seen similar things reposted a dozen or so times).
    • agentgt 10y ago
      Aha I think I have found one of the originals: http://altos.vc/2013/05/why-big-why-now-why-you/ http://altos.vc/2013/05/why-big-why-now-why-you/ IMO the above is very good.
      • lpolovets 10y ago
        Great article. Thanks for sharing it after you found it!
• apathy 10y ago
  This advice applies to a lot more than just startups. Any time you're asking someone for (real) money -- grants, etc -- the evaluation will be like this: 1) What are you proposing to do? (proposal) 2) Will it make any difference? (market/impact) 3) Can you get it done? (personnel/environment) That's it. If you can't knock every one of these out of the park in a few short sentences, you are unlikely to be funded by either the private or public sector. And before anyone remarks on how different the two are, note that the SBIR/STTR program is mandated by Congress to pay out every penny of their granting budget each year to try and turn publicly-funded research into privately successful companies.
• bettyx1138 10y ago
  i like how the article is simple and to the point. thanks.
• namanyayg 10y ago
  > "7. What do you want?" What would be a good way to ask something specific, without coming off as too arrogant or needy?
  • erichocean 10y ago
    General outline: To achieve X, we are looking for Y and thought you might be in a position to help us out with that. X = A goal you are working on achieving. It should follow naturally from the description of your business. Example: We are looking to demo our product to attendees at SXSW next year, like Twitter did originally. Y = What you are asking for (investment, introduction, etc.). Should be obviously beneficial towards achieving X. Example: Who should we be talking to at SXSW to make that happen? We've already spoken to…
• hoodoof 10y ago
  All you need to do is bring us a guaranteed globally successful viral mega product that no one has ever thought of before, be perfect is all ways with no risk to us and we will graciously back you with terms that are crushing and ensure you as the entrepreneur get next to nothing in the event of a liquidity event.
  • cmbailey 10y ago
    What I found most valuable: what he tells entrepreneurs they don't need to spend a lot of time on, in building the company and in presenting it. I've seen so many decks and pitches devoted to the team's credentials and past work experience, and about deals they've done or are doing. So Michael is saying something useful: we're willing to invest in a team with no credentials, no deals, no business development. Other things are more important. Things that are democratically available to us: building product, iterating with small customers, clarity of communication.
• outdooricon 10y ago
  Anyone else have trouble figuring out how to determine market size? Do I have to spend thousands of dollars for independent research online or is there another way that I'm just too naive as a developer to be aware of?