The problem with Pitch

Over the past ten years I have had the opportunity (at times the misfortune) of being asked to sit on a number of investor panels. If you haven’t seen one, it’s not a particularly difficult thing to imagine. They are basically made up of a handful of investors and specialists who listen to business pitches, look at the presentations and ask some (hopefully) tough questions.

Contrary to popular belief, this isn’t designed to be painful for anyone standing in front of the panel with their hopes and their dreams on their sleeves. I like seeing people succeed. I like seeing passionate people pursue a dream. I like seeing potential. Everyone else I have sat on a panel with has been the same. Nobody wants to be a dick.

(Forget anything you’ve ever seen on Dragon’s Den. That’s tele. This is life)

Anyway back to my point. Last month I was asked to sit on another panel. This was a pretty mild panel with a pretty minimal gain – it was more of a PR stunt than anything else, but it was a good opportunity for the business hoping to get investment one day to try out their pitch.

Pitch.

That’s a word I’m starting to loath.

Let me explain why.

When someone thinks of a “salesperson”, most people will have negative connotations in their mind. After all, these are the people who hound you and pester you and talk at you in order to get you to buy shit you don’t want or don’t need. We think of slick talkers. We think of people who will say anything to get the sale.

We glorify this on the tele. Have you seen The Apprentice on the BBC? My god it’s full of people who are absolutely convinced that to be a good salesperson requires the ability to talk shit very fast and never let a prospect go. It’s hysterical, or rather it would be if it wasn’t so infuriating. But then again, as I said before, that’s tele.

Unfortunately tele often intrudes on real life. The business world is the same. You want to talk about Dragon’s Den? How many people have their understanding about the angel investor process from that bloody show? Way too many.

That brings me back to that horrible word. Pitch.

I am seriously starting to hate that word.

The trouble with “Pitch” is that it’s started to mean performance. It’s started to mean theatrics. It’s started to mean “high energy” and “wow factors”. And you know what? That’s fine…if the fundamentals of the business are strong.

And that’s where the problem is. We have a seen the development in Scotland of a start-up ecosystem that prefers stye to substance. Who think that a good pitch is more important than a solid strategy.

It’s maddening. These companies are, more often than not, led by very passionate and committed people. They had an idea and they decided to pursue it. I applaud them. I know how tough it is and I admire them for throwing their hat into the ring.

But let’s help them get the fundamentals right.

The last panel I was in solidified this for me. One of the chaps who stood up to present was clearly a favourite of the other young start-ups. They clearly admired him and were looking forward to his “pitch”. I got ready for a whopper. I was excited too.

But there was nothing really there. Sure he talked passionately and gave a polished and impassioned plea. And I can see why these other young businesses, who have been led to believe that the “pitch” is the most important part of their business, would look at him and see the person who was most accomplished of their group. But guess what? He wasn’t. His presentation was, but his business models had huge holes in it.

The problem with “pitch” is that’s it’s nonsense. And that’s speaking as someone who has been on both sides of the table and experience success and failure. An investor needs to buy into your authenticity as well. They need to feel like you’re real deal, and part of that is down to how serious your business proposition is. No amount of slick talking can make up for that, and it can come off as insincere and obfuscating.

In an small effort to be helpful, I thought I’d pull together a list of key points I tend to try to raise with any young business I mentor:

  1. Don’t talk shit about your market size.
    Don’t give me nonsense about how massive your market is. Do you know how stupid it looks when people say “This is a £6B a year market and if we can just get 1% of it…”. Yeah, yeah, yeah. talk to me about how you’re going to get traction with a sensible market. I’ve worked with companies launching new products and new brands and it’s not as easy as you think. Focus on how you’re going to go after the market and how you think you’ll get traction.
  2. Be realistic in your projections.
    95% of investors I’ve ever met aren’t stupid. They know something is too good to be true. Of course a lot of them (particularly in Scotland it seems) will look for a defined exit, but they also want a decent rate of return. Trying to guild the lily by painting impossible numbers isn’t really clever, it just makes you look like you don’t know what you’re doing.

  3. Look before you leap.
    Do you really need to go for investment right now? Can you wait? For some reason, the vast majority of new start-ups right now in Scotland are running towards investment as their first step. Why? Getting investment may be something you need. A lot of it depends on the business model you’re working on, but you should approach it with care. The earlier you get investment, the weaker your bargaining position is. Can you start to sell now? Can you produce a first version yourself? Investment shouldn’t be your first goal. That’s a real dumb way of looking at a business.
  4. Don’t Pitch.
    Convince. People tend to buy into sincerity and passion. Tell your story. Show your passion. Show your drive. But do it with a solid foundation. Do your research. Ask the hard questions of yourself. Questions everything and then do it again. If you sit in front of people with a hard-fought business plan and a passion in your heart, you’re much more likely to impress than someone who has a weak plan but a fancy set of slide and a slick talking presentation.
By | 2017-01-28T12:49:22+00:00 December 2nd, 2014|Business Growth, Strategy Development|0 Comments

About the Author:

Jordan started out life as a degenerate musician and, for his sins, ended up as a respectable businessman. He's still slightly confused, but a far happier man. Jordan brings a creative flair and an uncanny ability to spot new opportunities - which makes him a good candidate to invite out for lunch. As MD of Gamechangers, he leads a team of people developing innovative business systems for ambitious companies.

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