Here are a couple of pitching ideas that I have recently rediscovered by listening to entrepreneurs – it is remarkably easier to see the mote in a brother’s eye - and while occasionally pitching myself. Please let me know if you see things differently.
01. Economic value remains sexier then social value – in the eye of most investors.
An idea for social entrepreneurs
If your business model creates both economic and social value, it may be wiser to discuss profit first and purpose second. This idea goes against the advice of many starry-eyed dreamers who start with “why” instead of “how much”. I should know, I am one of them. But not everyone subscribes to the same value system. You may occasionally encounter a starry-eyed investor who will resonate with your focus on “why”. But don’t count on it.
So, in most cases you will be talking to a typical investor, and if you spend the better part of your pitch on how you will create a better world, each statement you make will generate skepticism regarding your claims of social value and concerns regarding economic sustainability. By the time you get to the economic feasibility of the idea, the investor will have accumulated enough question marks to enter a resistance mode. Skepticism is a healthy attitude in an investor – but why should you add more barriers to those that will be there anyway?
So, when you next pitch an investor, try to reflect your understanding of their priorities in the structure of your narrative, particularly in the sequence of presenting your value propositions.
02. Incremental value will usually be easier to explain than a game-changing innovation
An idea for business model innovators.
So, you think you found that game-changing idea and you want to make sure the investor understands how utterly original you are. Unmatched clarity of thought and presentation skills that are second to none will surely help you convey your message. But anything less than that and your message does not get through. Assuming there is actual merit to your business idea, it may be precisely its originality that makes it difficult to grasp. So here’s an approach that I found remarkably effective as a communication tactic:
Find a conventional business model that has similarities with your idea and present your innovations as incremental improvements on that proven model.
Yes, you will sacrifice some hubris. Sure, you will forsake much of the glitz. But in exchange, you will anchor your audience in a familiar concept they can easily visualize. That establishes a common basis for understanding and makes your presentation much easier to digest. By drawing on a pool of knowledge available to them independent of your presentation, you will now be able to spend your most valuable resource (hic: their limited attention!) where it truly matters: to convey the essence of what makes your approach so distinctive.
Questions? Comments? Snide remarks? I would love to get your feedback.
I think it’s been more than thirteen years since I have become obsessed with understanding how the world works. I expect I will spend the rest of my life trying to get a clearer picture – but here is, in a nutshell, one thing I have learned.