The hype around startups has been going on for a while now and Dubai is no exception to that. I have been mentoring teams here in the UAE and outside for a number of years now and I can see how quickly things are changing. The eco-system is evolving, infrastructures and investors are maturing and there are plenty of opportunities to present your ideas, to pitch your startup. An increasing problem today is that many startups are only pitching for the sake of pitching.
What I mean here, is that founder need to ask himself, on every occasion, why is it that you are you pitching your startup? What is it you want to get out of this, and is it the right time for you to pitch? Can you defend your startup and can you defend your ask? If not, maybe you should forget pitching for a while.
If you are pitching to a VC then you need to make sure you convince them:
- that the opportunity is worthwhile pursuing
- that you are the right team to find a solution to the problem,
- that you have a prototype or a solution that creates and unfair advantage
- that you have validated your assumptions and that you managed to create traction with your offering
Whatever the competition, the preparation for pitching is critical. It is not enough to download a nice pitch deck and throw in some numbers. You have to prepare and really think whether you are ready to pitch. Don’t forget the eco-system is not that big and if you fail to prepare and make a good first impression you might not get many more chances to rectify that initial impression you made.
Many many times have I met startups that are not clear on questions, which for many investors will be like red flags. Here are 10 red flag questions that I would like you to ask yourself before pitching:
- Why am I pitching? This might sound stupid, but what is it that you really want to get out of the competition you are joining? What does it mean for you and is it worthwhile? In your deck, in your pitch, make sure you are really really clear about what you are asking! And your ask does not always need to be money, it depends on the event or the competition, it might depend on the stage of your startup. Don’t ask for money when you are at idea stage. You could ask helping finding co-founders, technical advisors or other elements that could help you move forward. If you ask for money be crystal clear on what you will do with the money. Don’t ask money to pay your salaries… that has to come later. Show how you will use the money to acquire customers and how you improve the functionality of your product. The ask does not always need to be money, remember that, but it has to be clear.
- Is the problem big enough? Is it worthwhile solving? If you are pitching to VC’s then this is important, because they are interested in companies that can grow quickly and grow big. Clearly show the size of the opportunity and the market segments you are targeting.
- Do you have the right insights? This is an element that is often omitted or not well explained. If the problem you are solving is that big, then why has nobody else come up with a solution? Are there any consumer trends, or technology trends that you will leverage that makes the other solutions obsolete? How have you learned about these insights?
- Does your solution create or have an unfair advantage? This is often one of the weakest point in startup pitches. Founders often present their product, their solution, its benefits, but fail to present how it creates an unfair advantage over competition. An unfair advantage could be a patent, a change in business model, customer experience or innovations in multiple dimensions. An unfair advantage, means that it is difficult, expensive and time consuming to copy your solution, it maybe even is impossible to do it in near term.
- Are you and your team members committed? It is not uncommon to see founders pitching while themselves and most of their team members still have full time jobs. When that is the case, you need to ask yourself how can you convince anybody that you are really committed to this venture of yours. If you are not taking a chance on yourself why should anybody else do? I know this might be difficult to swallow, but once you start pitching to investors, that will be seen as a lack of commitment. It does not mean you should quit your job today, but it means that you need to do it once you are far enough with developing your product.
- Do you have enough skin in the game? Similar to the commitment, but I would like to separate this, because there is a difference between putting time in a company and putting in money. People usually are quick at joining a startup, because you will always manage to squeeze out a few more hours for this new project, but once you have to put your own money on the line, then it is a different thing. It is kind of hard to ask others to put money into your company if you are not doing it yourself, isn’t it?
- Can you execute on your plans? Commitment is not enough if you don’t have the right skills to execute. The combination of skills and commitment will demonstrate you capability to execute. This is where you show your previous experience, your domain expertise and the completeness of your team and advisors.
- Have you validated the product/services that you are offering? Similar to the capability to execute, judges and investors will want to know how mature your startup is. Depending on the stage of your startup, judges will expect you to be clearer and clearer about the depth of validation you have performed. From survey and interviews in initial stages, to downloads, active users and other type of traction metrics that have you managed to generate during pilots and since going live.
- How will you acquire customers? Traction is important, but that often leads to another question, and that is the question of scaling. How does your business scale? How much does it cost to acquire a new customer? How much does it cost to keep a customer?
- Do you have a good storyline? Last but not least, you have to realize that most of the decisions we make are made both on an logical and emotional basis. Good startups have a good story to tell, a story that the audience can relate too, a story that generates emotions. It is these emotions that you can generate that could make a difference in somebody take a chance on you and your team.
Having been part of many juries and seen many startup competitions, I would like to give you the following tip: if there any of these 10 questions that you cannot answer well, then maybe you should forget pitching… for a while.
I know that this recommendation might sound a bit drastic and you should probably do a few pitches to learn. If you can answer 7 or 8 of these questions that is already a good start, but the point I want to make is that you should not get distracted by all these competitions and do some of the homework, it will give you better results. Anyhow I am curious to hear your thoughts on this. Are there any questions you would like to add to this list? Is there anything I omitted? Let us know.
Jean-Luc Scherer is the founder of Innoopolis and is a startup coach at multiple incubators and accelerators in UAE. You can reach him at jls@innoopolis.com.