What does your startup do, and why is that important? We look at how to hook investors in the first 15 seconds of your encounter.
Never forget, it’s your company!
This episode of centres on the importance of crafting a clear, compelling “So What” – a concise encapsulation of the problem a startup solves and why it matters. Founders have roughly 15 seconds to capture an investor’s attention, and the ability to articulate this succinctly is argued to be strongly correlated with startup success. A few formulaic starting points for elevator pitches are offered (such as “We do X for Y so that Z”), while cautioning against clichés. The broader point is that the “So What” should serve as a guiding principle for the entire business — a north star for decision-making and evaluating outside advice.
Homework: Define your “So What” and refine it into a tight, plain-language elevator pitch
Transcript:
Kia ora koutou, hello and welcome to Episode 6 of nzangels.com, a guide to raising Angel investment in Aotearoa New Zealand. I’m Dave Moskovitz, one of New Zealand’s most experienced angel investors.
This is the “So What” episode.
We’re now in the second section of this series – foundercraft – the art and science of being a founder. In the next set of episodes, we’ll talk about many of the aspects of your startup, how you think about it, build it, and structure it to be investable. We’ll go over some basic principles for building startups, and go through some of the resources at your disposal to help you out. We said it takes a village to build a startup, and we actually have an exceptionally helpful and supportive ecosystem here in Aotearoa that is ready to help you out, you only need to do your research, reach out, and find them.
But today, we’re going to dive into your “So What” – the little package that describes the problem you’re solving, the product you’ve developed to solve that problem, and why that’s important. So what.
There is nothing more important to attracting investors than articulating your “so what” in a really clear, succinct, and attractive way.
You literally have about 15 seconds to catch the attention of an investor, or anyone else you’re trying to pitch your company to. 15 seconds. You need to distil what you do into an attractive sound bite that encapsulates the essence of what you’re doing in a compelling way, and makes the listener want to hear more.
I have anecdotally observed a high correlation between startup success and the founder’s ability to articulate their “so what”.
Nail it in 15 seconds, in terms anyone can understand, and I’ll be eager to hear more. This is your elevator pitch.
If it takes you four slides and 10 minutes to describe the problem that your solving even before you get into any of the other aspects of your business, you’ve lost me, and probably for good. You’ve told me that not even you, the founder, understands your business well enough to explain it succinctly. How are you ever going to sell your product to a customer, or attract a great team, and why on earth would anyone want to invest?
There are some formulaic ways of building an elevator pitch. Here are some examples:
- We do X for Y so that Z
Doordash: “We help restaurants reach more customers so they can grow revenue without building their own delivery network” - We’re the X for Y
Peleton: “We’re the Netflix for fitness” - Leading with the problem
Swipesense: “Every year, 100,000 patients die because of a hospital-acquired infection in the US. This costs hospitals billions of dollars. Improving hand hygiene is the easiest way to reduce infections — but hospitals are still using pen and paper to track compliance.” - Leading with your vision
Publons: “We speed up science using the power of peer review.”
It’s likely that none of these formulas will be exactly right for your startup, and investors see so many pitches that it’s easy to spot overuse of clichés. But the point is this: you need to hook and catch people in the first 15 seconds of your pitch.
Think about the opening music in this episode – the lead-in to The Rolling Stones’ “Satisfaction”. It’s near perfect. Deliberately structured, simple, catches you, brings you in, and you’ll be humming it in your head for the next hour. You want your pitch to start with a similar hook. Zero in on what it is that’s compelling about what you’re doing, and why it’s important. We all want more of Mick Jagger’s Satisfaction, and less of Arlo Guthrie’s Alice’s Restaurant.
But this episode isn’t about your pitch, we’ll be going through your pitch deck in detail toward the end of this series. And it isn’t really about your hook either. It’s about your “so what”, which forms the basis for your pitch and your hook, and most importantly, for your startup.
I can’t work out your “so what” for you – this is something you need to do yourself.
Your homework for this episode is to work out your “so what”. Then, research elevator pitches online, and then whittle your “so what” down into an elevator pitch. The fewer and simpler the words, the better. This is critical to get right, from the start, and be ready to iterate it as your startup evolves. This is what is going to attract investors and customers to you. The longer you avoid doing this, the less progress you’re likely to make, as unclear goals almost invariably result in wasted time, effort, and investor cash.
Your “so what” is an important part of makes your startup yours. It’s a critical part of your DNA. Own it, and wear it with pride.
My final advice for you today is this: Never forget, it’s your company. As you go through your startup journey, you’ll be bombarded with unsolicited advice on every imaginable aspect of your business. Your “so what” should be your guiding light by which you evaluate this advice, and most decisions related to your business. Don’t get whiplashed by other voices, my own included. Let your “so what” be your guiding light, and never forget that it’s your company.
Our next episode will ask you to do a deep dive into your own motivations. We’ve worked out the “so what” for your startup, but what about you? Building a startup is one of the hardest things you’ll ever do. What’s going to keep you engaged over the long haul? Why are you the right person to be doing this? Investors will ask you this question, and it’s good to have figured this out and be confident well in advance.
Until then, ka kite!
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