Great Pitches Don't Start with the Problem
You've been told to start your pitch to investors by naming the problem.
Do you know why?
Because for early stage companies this is all that really matters. This is why you exist.
It’s the foundation of your entire business. It’s how you position your product.
It’s the ‘why’. And it can trigger powerful human emotions.
As one of our clients, the CEO of Modumate, Richman Neuman, explained it to me upon successfully completing his oversubscribed Seed round, "Idea is 10x more important than Team, which is 10x more important than Traction, which is 10x more important than Funding."
The fundamental point of discussing the problem is to illustrate that you are able to solve a huge problem that will be supported by customers with the money to pay for your solution.
However great pitches don’t start with the Problem.
When you start with a problem, you offer zero context for why solving that problem matters.
Great pitches start by naming a change in the world.
This can even be your first slide!
Because no matter what you’re pitching, your most formidable obstacle is adherence to the status quo — that voice inside your audience’s head that goes, "We’ve gotten along just fine without it, and we’ll always be fine without it."
Savvy investors understand the stickiness of status quo. They want to hear how you’ll combat it. More importantly, a change in the world helps them detect the scent of opportunity.
By credibly asserting that the world has changed in a fundamental way, you offer a credible reason to challenge the voice.
The change that starts your pitch cannot be a change that you are bringing about, that you want to bring about, or that you think should be brought about.
Rather, it is a change that has already happened (or happening and unstoppable). It is not the result of your company, product, or idea.
Example: “Customers today, they don’t want to buy products. Why buy a CD if you can get any song you want from Spotify? …Why buy a car if you can get from point A to point B with services like Uber? It’s what we call the “subscription economy.”
The change you name must, in other words, spark recognition. Your audience should think, “Hmm, I do subscribe to a lot of things.” You’re not trying to persuade them (yet) about some future you think they should want.
Don’t Proceed Until Your Audience Validates the Change!
This may seem like a small thing, but it’s huge. In validating the change, your audience signals agreement with how you see the world.
And this leads to them wanting to know how you propose to solve this problem.
Now your audience is engaged and wants to learn more.
Now you can present your Problem.
And when you present the Problem you want to answer the following questions as simple and concise as you can be:
What is the problem?
How do you know if it’s a problem? Do you have primary or secondary research to back this up?
Who are you solving this problem for?
Virtual Incubator: “More Than a Pitch Deck”
We discuss how to position the problem in our virtual incubator program. This incubator will guide entrepreneurs step-by-step through the best methods for building a fundamentally sound company that a VC would want to invest in.
Learn more about what's included in the virtual incubator program, plus details on the bonus material you'll receive.