A common confusion I find amongst entrepreneurs is about the audience for their pitch. Many create a generic pitch which they then try to use for business plan competitions, investors, partners, customers and anyone else who may be interested in their company.
The article Why your investor pitch is ruining your sales pitch by April Dunford on HackerMoon.com does an excellent job of explicating the important differences between the two pitches a startup needs: the customer pitch and the investor pitch.
….. some founders start seeing their pitch contest pitch as “THE pitch” — a general-purpose sales story for any audience. But customers are very, very different and they are looking for very, very different things. In a customer pitch the starting point positioning is different, the value they are looking for is different, and the call to action is different.
Here’s the three major differences she lists. Read her article for important detail on each one.
1/ The Set-up: Positioning is completely different for Customers vs Investors
2/ Why you: Investors and customers look for different kinds of “proof”
3/ The Ask: Selling your company vs selling a solution
April Dunford and I agree that there are a lot of problems with pitch contests – and I’ll post about that at a later date – but one of them is that “they reward a particular kind of pitch that doesn’t work in any other circumstances.” As she states: Customers hate your pitch contest pitch.
The core reason for this problem, however, is never made explicit: the first rule of any presentation or any communication for that matter is: who is the audience? The second is what is your goal in communicating with this audience? Once you apply these two rules it becomes painfully obvious that investors and customers are two radically different audiences – though both may give you money and your “ask” is also radically different.
So once you have completed your business plan competition pitch, pitch it out! Start over again tabula rasa with your customer pitch. And the same rule applies to both: practice, practice, practice! And learn from your feedback. Unlike investors, who hate to say “no,” on the off chance your venture may actually be successful and they will want in at a later date, customers have no problem saying “no”! They are a much tougher audience! What might have worked in your B-school contest will probably not work with real customers.
The bottom line is start talking to customers before your start developing your pitches! Nothing impresses an investor more than a venture that has real customers, customer engagement, and real growth in the customer base. And if you are too early stage for those accomplishments there is still no substitute for primary market research – talking to real customers instead of relying on analyst reports and other secondary research sources.