When I first was getting into the startup ecosystem, there wasn’t a blog I valued more than Kathy Sierra’s “Creating Passionate Users.” With posts like Helping users “feel the fear and do it anyway” and Sometimes the magic is in the imperfections, I became a fan of the idea of thinking about your user as the driving force for every action you make. The concept of thinking about your user for every part of your product, or user-centered design, was still new. It was a huge change from the flawed methodology that most technologists have with their first product — they think the user cares about them.
Similar to thinking about users during product design, think about investors during your product pitch. Present your story in a way the investors will hear you. I think it is important to understand that when you make a pitch, you have to walk the line of it being about you and more importantly, not about you. Let’s think about it this way:
Your product is all about how your users are going to say “I kick ass by using this.”
Your investor pitch is all about saying “I can kick ass and help my users kick ass with your help.” The way you communicate this — and get your investor on board — is to help them understand what core problem you are solving for your user. If you can convey this, you are doing better than 90% of the pitches I’ve seen.
What is the problem? Your solution doesn’t matter, as the problem you are solving generally won’t ever change, but your solution will.
Your chances of getting funding increase if you can get others to understand how you solve a problem (and make them kick ass).
You can simplify that even more — or take that in more than one direction — but I’m going to challenge you to think about designing a pitch with the core purpose of setting up an ask — the part where you ask them to come onboard— throughout the problem. You are raising money — that is your main purpose, while the investor’s main purpose is to not miss the billion-dollar deal they are always thinking about. Use this to your advantage. Think of your product, or your classmates project, and define it in terms of a problem / ask.
See the difference between a hype statement and a problem statement:
Hype: “With over a $2 BILLION dollar market, we just need to capture 1% to become the world’s leading change-maker of dog fashion. People spend hundreds on their dogs.”
Problem: “Do you have a pet? Our team has been playing around with making leashes that don’t have any toxic chemicals in them in case your dog uses it as a chew toy. Do you see this problem?”
If you set them up knowing the problem, the solution becomes easier. Get the buy-in for the problem, and make them part of the solution. Not every pitch is going to get an investment due to numerous valid reasons (market history, team dynamics and ability to produce are the top three that come to mind), but if you match the problem statement with an ask, you are setting yourself up for the best outcome. It’s obvious that you want investors to get onboard, but if you don’t flat out ask them to, they never will. It feels super aggressive, and in many ways it is — but, in the pitch or follow up, you need to say, “We are raising a round of $500k to make (whatever problem you are solving) happen, and we want you in.”
How do you communicate your product story to an investor? Get them to understand the problem, and make the ask. Design it around that.