Your success as an entrepreneur lives and dies by your ability to pitch your ideas. At the earliest stages of a company, this story may be all you have and will dictate whether you are able to move forward or not.
There are three key elements to crafting a great pitch: the Problem, the Solution and the Market Size. Ideally, you should be able to communicate all three elements in a few sentences. If you are unable to do so, you must work harder in distilling your company's value proposition.
State the Problem
- The first and most important part of a great pitch is to identify a painful problem. If you do not get across how painful the problem is, your company will not be a compelling campaign — no matter how elegant the solution. Make sure your campaign communicates how pressing the problem is for the consumer before proposing the solution.
- For example, if you were pitching the idea for Facebook at inception, you may have started with something along the lines of "The average person has 150 friends who are nearly impossible to stay in touch with at all times."
The problem should be something people can easily relate to, and more importantly, actively want to be solved.
Introduce the Solution
- Once people can identify the problem, you can present a solution that addresses the problem beautifully. Your solution should be clear and concise, focusing on how it solves the problem, rather than describing every feature of your solution.
- In our Facebook example, we might say "The average person has 150 friends who are nearly impossible to stay in touch with at all times. Facebook creates a social network that generates a single feed of information about the status of every person you know."
- Does Facebook do 50 other things? Sure. But all you care about in your pitch is the heart of the problem and the most important part of the solution. In sales, this is known as selling benefits (the benefit of the solution) as opposed to features.
Define the Market Size
- Once you've convinced people that you're solving a painful problem, the last step is to put the size of the problem in perspective. This is also known as your Market Size.
- This part of your pitch is often more important to equity investors than it is to people who will simply back your project for rewards. Investors want to know that your company is serving a big enough market to grow in. The bigger the market, the bigger the potential value of the company in the future, and therefore the bigger the payback on their investment. Some investors will only invest in companies they believe have the potential to be the next Google.
If we were to explain the market size using the example of Facebook above, we might just tie it to the Problem Statement. For example, "Over 300 billion people worldwide have an average of 150 friends who are nearly impossible to stay in touch with at all times." With that small addition, we can quickly give prospective investors a good sense of how big this problem is.
Put it all together
- Now that you have each of the components for your perfect pitch, it's time to pull them all together. Your pitch should be concise and just a few sentences long.
Our example pitch would read like this:
- "Over 300 million people worldwide have an average of 150 friends who are nearly impossible to stay in touch with at all times. Facebook creates a social network that generates a single feed of information about the status of every person you know."
- The rest of your company profile may explain all the details of your idea, but should always lead and center around a strong, well-articulated pitch that anyone can immediately grasp and get excited about.
- This pitch could be used as a leading statement in your profile to catch the attention of backers and investors and inspire them to read more.