5 Common Pitch Mistakes That Startups Make
I love working with startups and preparing them to present to investors. I’m inspired by their vision, their courage and their belief that they can change the world. However, I consistently see startups making the same mistakes in their pitches, and it hurts their chances of success. For a pitch to have impact, it needs 3 things: engagement, credibility and clarity. Get your audience’s attention, eliminate doubt from their minds and deliver a clear, easy-to-understand message. And these are precisely the areas where many pitches fall short. Let’s look at each in turn.
Mistake # 1: Not engaging your audience immediately.
The name of the game in any presentation is engagement. If you lose your audience’s engagement, you’ve lost the opportunity. So the criteria by which we judge every word we say and every slide we show should be: Is this likely to engage my audience or not?
The enemy of engagement is predictability. Hence the stock standard opening of “Hi. My name is X. I’m the CEO of Y Company and we do ABC” fails to engage. And worse, it is usually stated in vague, technical terms which confuse the audience. Each stage of a pitch should serve a purpose, and the purpose of introducing yourself and your company is not to get engagement. It’s to establish credibility and highlight your key advantage. So engage first and introduce yourself afterwards.
So how do we get engagement? Of course, energy and passion are essential. That doesn’t mean being loud or salesy. It means being authentic. If you’re excited about what you’re doing, then show that in your pitch. A sale is largely a transfer of confidence and enthusiasm from one mind to another.
Your opening needs a hook, something that grabs attention. Personally, I’m not a fan of gimmicks. If you have truly identified a gap in the market, then simply stating that clearly and succinctly can be highly engaging. Another way is to tell a story about how your idea began or how you solved a problem for a customer.
Let’s look at some examples from startups I’ve worked with:
Example 1: “About a year ago, I bought the best cryptocurrency security product on the market, and I hacked it - easily.”
Example 2: “Late last year, the servers of one of Europe’s largest banks came under attack from an unforeseen vector. All their other security systems failed to detect it, but our system picked it up, blocked it immediately and averted a near disaster.”
Example 3: “Most people think that data privacy is somewhat under control. In fact, it’s totally out of control. Lawsuits are on the rise, governments are closing in and companies have no real options to handle it.”
In each case, the problem, or a story surrounding it, is the hook.
Mistake # 2: Not establishing credibility from the outset.
As humans, our default position towards new ideas is often skepticism. If you don’t give your audience a reason to believe you from the start, they will likely filter your presentation through their questions and doubts. This works against you. The trick is to get them to believe in you before they hear about what you do. If they know from the outset that you have had some degree of success, or that you have industry experts on your team, they are likely to listen more closely. Then, instead of wondering whether or not your idea will work, they’ll be wondering what those customers or team members see in it that they don’t yet see. This is the purpose of your introduction. Note that technical expertise and academic qualifications by themselves do not establish credibility to the same extent as commercial qualifications. Being a graduate of the Technion or from Unit 8200 is not the same as having years of experience as a CEO or other executive, investor or advisor. So highlight any team members, clients or channel partners that fit this description.
It sounds something like:
“My name is X and together with Y, the former COO of [well-recognized company], we have developed a technology that solves this problem.”
Or “My name is X, and we’ve been solving this problem for the last 2 years for companies like A, B and C.”
Mistake # 3: Not establishing your competitive advantage early on.
Once you’ve got engagement and established your credibility, your audience is likely to be wondering about your competitors. Again, this creates a sense of doubt which can affect how they view the rest of your presentation.
At this point, there's no need for a full competitive analysis. If you just give a broad overview of how companies are addressing the problem and where they’re falling short, that's usually enough. A more complete overview can come towards the end of your pitch.
Mistake # 4: Not having a succinct, clear message.
Weak messages are filled with technical language and jargon, and they focus on the features of the product or service. For example:
“We provide best-in-class privacy protection for enterprises engaging with 3rd party providers whilst maintaining the data advantage.”
This sort of vague, jargon-filled statement is an engagement killer.
Strong messages, on the other hand, use simple, clear language and focus on the benefits. For example:
“One of the biggest sources of privacy leakage is 3rd party online services, like Facebook advertising and Google Analytics. We enable companies to use these 3rd party services without compromising their clients’ private data.”
When your core message is unclear, people feel confused and are likely to tune out.
Mistake # 5: Competing with their slides.
In the battle for your audience’s attention, we often create our own worst enemy. Your audience is constantly choosing what to focus on: you or your slides? Take it as given that your audience will read anything you put on a slide. They can’t help themselves. If you show 5 bullet points and start talking about the first, guaranteed they’ll be reading all 5 - and not listening to you. If you put up long sentences, they’ll tune you out while they read them. Same with complex graphs.
Your slides are there to serve you, to anchor your points and make your message easier to understand. This is done by controlling what your audience sees and when. Animate everything. Click to reveal each bullet in the list, or each part of the diagram, and limit the amount of information on each slide. A good general rule is 3 to 5 bullets per slide with 3 to 5 words per bullet.
Be sure to always use large, clear fonts. Think “freeway signs”. Dark backgrounds are preferable to plain white. A white background can be quite overwhelming on a big screen and tends to overpower the speaker. Dark backgrounds allow the speaker to stand out more and are easier on the audience’s eyes.
Rather than just delivering information, the elements of an effective pitch take the audience’s psychology into account. To have impact, it is essential to make sure that they are really listening, to remove any doubts they may have, and to make your message easy to understand. Engagement, credibility and clarity.
Entrepreneurs put an enormous amount of time and energy into their businesses, yet often neglect the one thing that can have the biggest impact on their success. Crafting an effective pitch is one of the most high-leverage activities that a startup can engage in. It should therefore be approached with the appropriate level of consideration, taking into account the specific effect of each element on its intended audience.
Eli Ezra is a consultant and communication coach to hi-tech and startup businesses both in Israel and around the world. He coaches entrepreneurs and executives on how to structure their message, pitch to investors, and sell to and negotiate with customers. Eli has mentored speakers for the TEDx stage, for keynote addresses and large international conventions in front of thousands of people. His clients have included Google, Facebook, IBM Alphazone, Check Point Software and EY, amongst others.