Entrepreneurship
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Transcript Entrepreneurship
MBA – Business Model
Integrative course
How to pitch a new venture project ?
Bruno M. WATTENBERGH
March 2011
How to pitch a new venture project ?
• What is a pitch … an elevator pitch ?
• 8 key steps ?
• The essentials ?
• The mistakes ?
• What if you’ve been good ?
• Back to some basics
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Expected Outcome
• Give you an understanding of the purpose of an
elevator pitch.
• Provide a technical framework for how to give an
elevator pitch.
• Provide a context and intangible approach for a
successful elevator pitch.
• Highlight what not to do !
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Sources ?
• Entrepreneurship Development Program MIT Sloan
(the top school to learn how to pitch) …
• Own experience :
– As a pitcher …
– As a finance executive …
– As a client …
– As member of BP competition’s jury …
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What is really a PITCH ?
What’s an Elevator Pitch ?
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Where does the word comes from ?
• Marketing & Communication world …
• Presentation to sell something, to tease, to attract
the attention …
• To tell a story to sell something … (product, you,
your venture, …)
• Entrepreneurship, theatre, movie, …
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To sell or to attract finance ?
• Both … !
• Almost the same structure … !
• Not exactly the same composition / objective ...
• The same introduction hook
• The same conclusion appointment !
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In a few words ?
• Bare Essentials : Effectively conveys the essence
of your company in XX seconds – minutes (from
‘55 to 5 minutes).
• Pitch not Presentation : Not the complete story !
• Creates Action : Convinces the target to have a
follow-up meeting … binary result YES or NO !
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Outcome of a successful pitch ?
• Prepare the next stage appointment On – Off
(good control !)
• Create in the mind of the interlocutor a positive
mindset for future success !
• Avoid useless appointments are you in the range
($), scope (sector, stage, …) of the investor … or
for a sale pitch do we have some potential
interest to make business together ?
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What’s an Elevator Pitch then ?
• « Elevator » as your
message is supposed to
be delivered in the time
span of an elevator ride,
that is from ground floor
to exec level …
• … between 30’ to 55’
seconds, less than 220
words.
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Duration of the Pitch ?
•
•
•
•
2 minutes ?
4 minutes ?
10 minutes ?
Q&A ?
• Depends on the stage of the relationship … ?
• Depends on the country … ?
• Depends on the place … ?
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The Momentum ?
• If it is a real pitch :
– Mr BIG
– Preparation
Eminem …
– You own it, you better never let it go !
– You only get one shot !
– This opportunity comes only once in a lifetime !
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A pitch is NOT …
• A technical description of your product or
technology …
• A childish attempt to persuade …
• A process of seduction …
• An abstract thing …
• Is rather convincing than persuasive respect
• …
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Some key interdependencies ?
1. Customer Pain
2. Value proposition
3. Quantifying value proposition
4. Decision making unit (DMU)
5. Identification of targets (market vertical)
6. Finance
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8 key steps to succeed
your (elevator) pitch ?
8 key sentences !
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1st STEP : “A good Hook”
« The hook ! »
Ask a closed question
Known answer !
Clear customer pain
Get connected - Attract attention
Highlight the problem, pain, need that your enterprise wants
to solve or meet make it clear, obvious.
Your interlocutor will project himself in the problem and be
ready to understand the value of your proposition
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2nd STEP : “Your SOLUTION”
« The SOLUTION ! »
How you can solve the
customer pain !
A G.O.U.S.P
PPASX ?
What is your product, service description based on the
pain highlighted in the hook.
Describe briefly what exactly you’ll sell risk / value
No technical details !
The value must be understood Quantify ?
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3rd STEP : “Who’s your Customer”
« The chosen Customer ! »
Market vertical chosen !
Select and describe a
vertical … and explain why !
Who will be your customers ?
What is their activity sector or industy ?
Some indications on the market size
Known market – if possible – a market test
If possible show letters of intent
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4th STEP : “Where is the $$$$$$$$”
« How will you make
money ? »
Business Model ?
Briefly describe the business model chosen
How will you deliver the value to the customer ?
How will you capture the value from the customer ?
Recurrent revenue channel ?
Distribution, Sales, Test-case, … ?
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5th STEP : “Who are you ?”
« You & your team ? »
Explain who you are …
Expertise
Complementary team
A lonely wolf … or a team ?
An inventor, a manager, entrepreneur ?
Track records
Explain why you and your team are capable of solving
the announced problem and why you deserve to be
paid for that ?
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6th STEP : “Comparative Advantage ?”
« What is you U.C.A.? »
Explain why you are ≠
Explain why it is a competitive
advantage
You not a dreamer … you know what your are talking
about … you know the value for the customer
You know the customer & the competition Metrics ?
Take the angle of talking about the comparative assets
of your project, how you distinguish yourself from the
existing competition : distribution, partnership,
technology, …
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7th STEP : “Competition?”
« Who are the Competitors
?»
It there are competitors …
great ! … There is a market !
What are your main competitors (very figurative for the
investor) ? Why ? What is their market share ?
Competition is a good thing. It means there is a market!
Metrics
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8th STEP : “Closing”
« Follow-up Action ? »
Goal of the pitch is to induce a
follow-up !
Explain what you expect from your interlocutor …
What is the next step for you ?
How to induce a follow-up concretely ?
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Yes …
it is possible
in 55 seconds
…
!
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The Essentials ?
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5 essentials for your (elevator) Pitch ?
1. A good catchphrase the Hook
2. +- 150 to 225 words
3. Value (for the customer)
4. Passion
5. A clear request (value for the investor)
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The hook ? We talked about it …
Captivate immediately the attention of the investor
with a catchphrase, a teaser, a « hook » …
Get physically and mentally connected …
Set the playingfield … the battleground …
Ideally a question or affirmation that will raise his
curiosity so that he will want to hear more ...
Work to find a good one !
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Duration ?
Basis of 150 to 225 words … Maximum 60 seconds
Your time is valuable. So is his, if he is an important
investor (Mr BIG)
Allows you to reach a lot of people in a small room …
(Cocktail Strategy)
Must be « finished » … within this lapse of time
Must allow an immediate follow-up (if there was some
affinity) Answering questions
May be longer but if U able to do it in ’55 …
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Value ?
Investors will be attracted by the existing value and
the potential value :
Potential Value : the UCA, the model, …?
Existing Value : what has been done so far ?
Be CLEAR : Investors must understand the value
created, delivered, captured by your business
model
They also need to know what you do and don’t do
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Passion ?
Investors love passion … that lead to ambition,
engagement, investment, …
Clients too …
Make your pitch interesting for them …
Show them your passion …
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Don’t forget the clear demand !
No interest to pitch if it doesn’t open the door for the
next step
Next phase is :
a meeting,
with a clear agenda,
with the right people, …
… with the objective to raise $$$$
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The Fault ?
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You’ll head of a crash if … ?
1. Talk about technology
2. Talk about yourself
3. Lack empathy
4. Do not prepare enough
5. Don’t know the interlocutor
6. Waste time disrespectful
7. Lack of confidence
8. Fishing expedition
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Fault 1 : Too much Technology ?
☹
☹
☹
☹
Don’t talk too much about technology
Technology is not a the means to an end !
Technology is a way to create value
We are talking about a venture, not a research
project
Mention technology once but be ready to answer
question or to offer a demo
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Fault 2 : Talking about yourself ?
☹ Don’t talk about yourself all the time
☹ Pitch must be focused on them, not on you
☹ Dialogue must be focused on their interest for the
venture
You = Team + stock of competencies and skills,
stock of experience, …
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Fault 3 : Lack of Empathy ?
☹ Don’t be self-centered
☹ Investors & clients do business with people they
have a relation with … People think they have
such a relation when they feel they are understood
(need, situation, pro / private / CP)
☹ Listen and keep your concentration on their
questions ?
☹ Too much preparation on the form (2muchtraining)
?
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Fault 4 : Lack of preparation ?
☹ Vague … no logic … no red line
☹ Lack of knowledge about the product, … or the
customer pain
☹ Unable to play with the VP
☹ Don’t know the target or less knowledge of the market
than the target
☹ No BM
☹ Basic questions without answer
☹ Nothing to ask
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Fault 5 : Don’t know the target ?
☹ Lack of respect
☹ Lack of preparation
☹ Unable to adapt the Customer Pain
☹ Impossible to know what to ask
☹…
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Fault 6 : Too long ?
☹ Lack of respect
☹ Lack of empathy
☹ Lack of preparation
☹ Unclear Value creation and/or Business model too
complex
☹…
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Fault 7 : Lack of confidence ?
☹ Lack of preparation ?
☹ Lack of knowledge of the market ?
☹ Weak BM …
☹ Don’t know what you want ?
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Fault 8 : Fishing expedition ?
☹ No clear objectives
☹ Nothing to ask
☹ Don’t do that with Mr BIG !
☹ Change you training program !
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What to do if my model is complex ?
Try to use mind mapping
Tell a nice interesting story
Think about the media tools
…
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What you have been good ?
You have convinced and documented the right
person … and he will convince other (appointment,
…) … OR … You convinced the right person to give
you a longer appointment, probably with other
important people
Next time you will meet the right guy …
You have created a good context to develop the
business with you …
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What you have been good ?
You have been sincere … You “touched” the guy …
You have shared your values, your empathy, you
took advantage of the momentum !
You convinced about your knowledge of the market
…
They want to know more about your venture and
probably about you …
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Reminder : Some key interdependencies ?
1. Customer Pain
2. Value proposition
3. Quantifying value proposition
4. Decision making unit (DMU)
5. Identification of targets (market vertical)
6. Finance
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1. Customer Pain ?
Notion of customer pain
Identifying current pain
Developing latent pain
Quantifying the pain
Understand needs, situation, vision, constraints, …
Create relationship when you sell
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1. Customer Pain (2) ?
Market segmentation indispensable
Choose a vertical market subset
In relation to your offer (resources & competencies)
In relation to the market interest (customer pain,
tendency, wave, …)
Do some questioning
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2. Value Proposition ?
• A value proposition is generally a clear and succinct
statement (e.g., 2-4 sentences) that outlines to potential
clients and stakeholders a company's (or individual's or
group's) unique value-creating features.
• A value proposition is a clear statement of the tangible
results a customer gets from using your products or
services.
• A value proposition is an offer to some entity or target in
which they (the possessor) get more than they give up (merit
or utility), as perceived by them.
• A value proposition is the basic reasoning for why people
should consider your product or service.
• Describes what you do in terms of tangible business results.
It draws interest and shares a success story within a few
words.
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2. Value Proposition (2) ?
Some questions / issues about the VP ?
P.P.A.S.X. ?
Product / service / Levitt ?
Business model ?
Pay attention to Swiss knife syndrome !
Make choices !!!!!
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2. Value Proposition (3) ?
P.P.A.S.X. ?
Product characteristics ?
Price more than costs only strategy ?
Access distribution PoC with client / CR ?
Service Levitt / whole product ?
eXperience feelings, emotions ?
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2. Value Proposition (4) ?
The challenge of the Value Proposition ?
Identify & compose the characteristics …
… identified clients are ready to pay for …
… with a clear differentiation …
… while making a minimum / maximum profit …
… being able to present it attractively / value
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2. Value Proposition (5) ?
USP Unique Selling Proposition ?
One value that distinguishes your from others
One value that lets you dominate the offer
The other values must meet the standards of the
competition
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2. Value Proposition (6)
Value proposition can be synthetized …
–Domino’s Pizza : Fresh, hot pizza delivered to your door in
30 minutes or less, or it’s free
–FedEx : When your package absolutely, positively has to get
there overnight
–IBM : Global solutions for a small planet
–Intel : Intel inside
–Lexus : Passionate pursuit of perfection
–Visa : It is everywhere you want to be
–M&M’s : the milk chocolate melts in your mouth, not in your
hand
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2. Value Proposition (4) ?
Test you VP 4C’s check :
Consistent / Logical / Durable
Concise
Clear
Credible
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2. Value Proposition (4) ?
How to look for a VP ? :
Step 1: Use your biggest benefits
Step 2: Be unique
Step 3: Solve an industry “pain point” or “performance
gap”
Step 4: Be specific and offer proof
Step 5: Condense into one clear and concise sentence
Step 6: Integrate your USP into all marketing materials
Step 7: Deliver on your USP’s promise
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3. Quantify the Value Proposition ?
Value Proposition must be quantified ?
Measure clearly the economic & social benefits
Move from burden / cost to return on investment
Imposes to know the client weel Study / prepare
Ideally a well documented test case
Ideally you need to focus on a specific vertical
market Focus
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3. Quantify the Value Proposition (2) ?
Get into your client’s mind
Try to understand how your client currently solves
his problem
Assess the impact of your value proposition on his
processes
Calculate – Estimate the change you need to
give a good return on investment
Be better, faster, cheaper !
Pay attention to NIH
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3. Quantify the Value Proposition (3) ?
NIH : In-house competition is a trap you need to manage
Be capable of evaluating the option of in-house development
rather than evaluating your value proposition
Economic redemption
Learning and scale curves
Maintenance
Synergies
…
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3. Quantify the Value Proposition (4) ?
How to fix prices ?
Cost + hmmm, not so good
Vs competition not so good
Rather a benefit for the client good
Ideally : integrated approach of all these options
Be creative
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4. Decision Maker Unit – DMU ?
Who will you pitch to sell ? Why ?
You might have some choices ? Do you ?
Choose the good / right interlocutor regarding your
quantified value proposal …
The pitch must fit the DMU …
Prepare, prepare (identification, quantification, …)
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5. Decision Maker Unit – DMU ?
Focus on ONE market subset
Startup lack of resources (time, money, …)
Credibility <-> capacities
Need to validate the BM quickly
Know a vertical market very well, test your VP
quickly, adapt your VP, test again, validate, explain,
scale up
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Some basics to remind ?
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Building the competitive advantage ?
VISION
MISSION STATEMENT
VALUE PROPOSITION
QUANTIFIED VALUE PROPOSAL
BUSINESS MODEL
DMU
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Somes movies ?
The classical video on Elevator Pitch (380.000 views) :
http://www.youtube.com/watch?v=Tq0tan49rmc
Some examples + feed-back from judges
http://www.youtube.com/watch?v=vAvErchnM_w
A finalist at the 100K$ BP Competition at MIT
http://www.youtube.com/watch?v=-ddSp71oIno&feature=related
10 things to know when you pitch a VC – HBR
http://www.youtube.com/watch?v=lzDBrMisLm0&playnext=1&list=PL836838
DACEB39198
Some good advices …
http://www.youtube.com/watch?v=q0EWScOXFpA&playnext=1&list=PLFC6
C881B6B313D64
Some students pitching
http://www.youtube.com/watch?v=Bh5TA6S4X24&feature=related
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Some books ?
• Elevator Pitch Essentials:
How to Get Your Point
Across in Two Minutes or
Less The 9C’s
• The Art of the Start: The
Time-Tested, BattleHardened Guide for Anyone
Starting Anything
• Made to stick or the Art of
making ideas unforgettable !
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