The Startup Podcast has a show on 10 Fatal Pitch Style Mistakes. As far as I know, no VC has never killed an entrepreneur during a pitch session*. However the session is very information and provides a lot of useful, practical advice. I want to build on some of the comments.
“Our target market is everyone”. For a small business, if your target is everyone then your target is no one. Who are your current customers? Do they have anything in common (besides being your customers)? How about the prospects you are talking to or trying to reach. What do they have in common? Geoffrey Moore defines a market “as a set of actual or potential customers for a given set of products or services who have a common set of needs or wants, and who reference each other when making a buying decision.” The critical thing about a market is that customers reference each other. A global investment bank will rarely reference a kebab shop in Parramatta. From a buying perspective, customers define the market that they are in.
“We have no competitors”. BS. You don’t get to decide who is your competition. Your customers do. And your biggest competitor is often “Nothing”. If customers do not see the problem you solve as relevant then then they will do nothing. If you don’t know who your competitors are then you haven’t done enough customer research.
I agree with the Discovery is very important. Firstly it shows that you are serious. You’ve actually got out of the building and talked to people who might be customers. You are showing that you understand that you are building a business not just a technology. I also like hearing when your hypotheses have proved to be incorrect. If everything you suspect to be the case turns out to be correct then it is likely to be because you are either overly confident or you haven’t done enough research. No business plan survives first contact with the market. And for a startup, the question is less about position than velocity. How quickly can you test your hypotheses? Time is money and the clock is ticking.
Finally, I would note that a pitch deck for investors will be very different to a sales deck for customers. About a decade ago, I was at a conference in Singapore. Some guys from a software company had just got off a plane from San Fran where they had been pitching to VCs. So the CEO came in and started talking to the attendees about how revolutionary his product was. Only the attendees were potential customers, not investors. They didn’t want to hear about something revolutionary and disruptive. They wanted something that would just fix their problem. So he scared the bejesus out them. Everyone smiled and nodded and ignored him. What a missed opportunity.
Customers and investors want different things from a company. Know your audience.
*If this has happened then I want to know about it.
When I Google search for VC deaths, it seems more likely to occur with either Victoria Cross award winners or the Viet Cong. So I'm going to guess it hasn't happened in the Venture Capital space.