I am often approached by early-stage entrepreneurs who want something from me, whether they are looking for quick advice, mentoring or an investment. I noticed that I was writing similar emails again and again. Eventually I copied and pasted the emails into a Google doc. When someone would contact me, I would send them a link to the Google doc. This helped clear up a lot of misperceptions. I also noticed that the quality of the pitches I was hearing was going up. So, I decided to turn this advice into a blog post (you’re reading it).
Social Entrepreneurship Ideas
If your business has a strong social or environmental impact, I’m more than happy to meet. I primarily work with social entrepreneurs. For a description of social entrepreneurship, you can grab this infographic.
If you would like to be prepared for a meeting with me, the questions that I might ask are below. Obviously I reserve the right to ask other questions, but these are the most likely to come up. If you would like to clarify your thinking, I would suggest that you read the books Business Model Generation and Value Proposition Design. Other resources I regularly recommend include The Next Step, The Lean Startup and Work on Purpose. If you want to arrange some time with me, feel free to email me.
Below I will describe what I will be looking for in three types of pitches:
- The Elevator Pitch
- The First Meeting
- The Second Meeting
Let’s start with the elevator pitch.
The Elevator pitch:
Not all elevator pitches happen on an elevator. I often take ten minute meetings just to find out how I can best help. Think of an elevator pitch as somewhere between 30 seconds and ten minutes, depending on how things go. You should be able to encapsulate your business in 30 seconds or less. Ten seconds would be better. If you’re riding the proverbial elevator with me, and you want to pitch me, here’s what I will want to know:
- What is your business?
- What social / environmental impact do you want to have on the world?
- What is the problem you are solving?
- What is your solution?
If it is a really, really long elevator ride, add the following:
- Who is it for?
- What is the size of this opportunity?
- Why is it likely to work?
- Why is it important and urgent?
- Who is on your team? Why are you the ones to build it?
If I follow you off of the elevator in order to hear the rest of your story, this is what I’m likely to ask:
- Where are you on the journey?
- How are you funded?
- Have you been able to measure your impact? What have you measured?
- What is “rare” about your solution? Rare is your “why this is the best X in the world” story.
How will I assess your business?
If you are going to try to achieve your goal with the meeting, it’s only fair that you understand how I assess any early-stage business when I’m looking at it. [spp-tweet tweet=”I judge any company by four factors: the dream, team, scream and steam. @TonyLoyd”]
- Dream: I look for impact first. What is the better world that you dream of? What impact do you dream of having on the greatest challenges of our times?
- Team: I am looking for founders that are competent, passionate and understand the needs of the market.
- Scream: How loudly is the market screaming for this product / service? How do you know? Do you have product-market fit? If you don’t know, how will you quickly determine that?
- Steam: How quickly are you going to market? Are you ready to execute? Are you currently taking massive action within your limited resources?
If you seem to be on track and we both decide to keep talking, I’m likely to set a short meeting with you.
Ten Questions for our First Short Meeting
If we move past the elevator pitch, here’s what I’m going to want to know. You can answer these questions in any order that you think makes sense, but these are the most important questions in ten minutes:
- Ten minutes from now, what are you going to ask me for?
- If I know what the ask is, I know how to listen. Hint: Don’t propose marriage at the first meeting. The purpose of the first meeting is simply to ask for the next date.
- Who are you?
- I’d like to know something about you personally. This is not a resume. It’s a human connection. Don’t try to wow me, just be your authentic self. If there’s more than one person, I want to know who each of you is.
- What is important to you in the world?
- What do you stand for? Tell me about your values. Tell me what issue, problem or opportunity evokes strong emotion in you. What causes you to feel love, empathy, anger, or a sense of injustice? I want to have a sense of your life’s purpose. No small ask, I know.
- What problem are you trying to solve with your offering and how do you solve that problem?
- What problem does your customer have?
- Is there a greater challenge that you’re going after with this solution? Examples include:
- Extreme poverty
- Hunger
- Health / well-being
- Equitable, quality education
- Equality / Opportunities for women and minorities
- Water & sanitation
- Clean energy / climate change / sustainability
- Economic opportunities
- Safety
- Peace and justice
- Income inequality
- What is your solution?
- What are you building? What is your “offering?” What product or service are you creating? If you have many offerings, then what is your core offering, the main thing that you’re making for the world?
- How will you test your solution through minimal viable products to make sure of product-market fit?
- How will you make money?
- What is your business model? How big is the opportunity? What size of business are you building? Is this scalable or are you building a lifestyle business? What are your goals and objectives for the next day, week, month and year?
- Who is it for?
- Who is your customer?
- What pains are they trying to avoid? What keeps them awake at night? What is the pebble in their shoe?
- What gains are they trying to acquire? What are their hopes, dreams and ambitions?
- Why Now?
- Why must this product come to market right now? How loudly is the market screaming for your product? How big is the market?
- What are you measuring?
- How will you know you won? Does the measure include a social / environmental impact?
- When will you be ready?
If you’ve covered these ten questions, go ahead. What’s the ask?
If I Take a Second Meeting
In the event that there is a second meeting, here are other questions that I’m likely to ask:
Your business:
- What is the hard part of your business?
- Being known? Being trusted? Creating something that people cannot live without?
- What have you done, or what are your plans to do the hard bits up front?
- Can you create something that is both hard and rare? Rarity creates value.
- What legal form will your business take?
Your Business Model:
- How will you make money? What is the value proposition that you offer? How much is that value worth to your customers?
- What channels will you use to reach and serve the customers?
- What is your marketing plan? What is the cost per customer to acquire customers? What is the lifetime value of an acquired customer?
- How will you create relationships with customers? How will customers learn about you? How will they learn to know, like and trust you?
- What key resources are required to acquire and serve customers?
- What are your key activities?
- What are the operating costs?
You and your team:
- Do you want / need cofounders? What would you look for in a cofounder?
- What makes you uniquely qualified to pull off this business? Why are you the authority for this niche? What is your unique message? Why are you the one to bring the solution? Do you have or can you develop the authority to provide this solution? Can you be the world’s leading authority in this niche? If not, can you narrow your niche even more? Why would anyone trust you? What are your competencies?
- Why are you passionate about serving this particular niche? Are you passionate enough to do whatever it takes? Anything? Even the boring stuff?
- What is the source of your passion? Who are you in the marketplace? What are your values? What is your purpose? What is the vision of your company (your true north)?
- What impact will you have on the world (or what dent do you want to put in the universe)?
- Have you started other businesses? What happened to them? What did you learn?
Your competition:
- Who is your competition?
- How are you (you personally, your company and your brand) significantly different than your competition? Will your target customer care about that differentiation?
- How is your offering clearly differentiated from your competition?
Your offering:
- How do you help remove the stone from your perfect customers’ shoe? What is your solution? What products and services will you provide? What are the high-level specifications of your solution? What will your first paid offering be? What is next?
- What is unique about your offering? [spp-tweet tweet=”I will push you hard on how you differentiate your products and services. @TonyLoyd”]
- Every successful business has a monopoly on what they make. They have niched the market so narrowly, they are the “best in the world” at something – perhaps something tiny. No one else can make it the way they make it.
- Is your offering so special, that people will cross the street in order to get it?
- How will you price? How does your price compare to similar offerings in the marketplace? What revenue do you expect from your value offerings, by when? How much profit do you expect to make by when?
- What benefits will the customer gain from your solution? What is the value your business creates (back to the business model and value proposition)?
- Is the solution to the grand challenge baked into your product / service? For example, Ben & Jerry’s Ice Cream creates an impact, but it is not a part of their products / services.
Customers:
- Is this niche commercially viable? What is the total addressable market size for your solution? How many customers? How much profit potential?
- What do you know about your customers? What have you done to specifically learn from them? What do they believe about the world?
- Are there subgroups? What is their world view?
- Who are the key customers?
- Can you create an avatar (model) of your perfect customer including their name, age, gender, education, profession, hobbies, income, automobile, family circumstances, favorite reads, favorite social media platforms, favorite websites, and favorite movies or TV programs?
- Have your target customers ever paid for something like this before? (First-time buyers can be harder to sell to)
- Does this group or subgroup know that you exist? Do they know about you?
- Of the people who know about you, do they trust you?
- What is your story? Your story must match your customer’s world view. What is it you’re going to build? Why is it important? Why are you the one to build it? Why is it likely to work? What is scarce? What is hard? Why must it happen right now?
- Will they listen to your story? Does your story resonate with them enough that they’re willing to give it a try?
- The people who pay, do they pay with money, trust, attention or referral? Are they paying with their own money (a consumer) or with their boss’ money (business)?
- How does your perfect customer make decisions? Whom do they trust for advice?
Community:
- Who are your tribe members (potential future fans)? Where do they hang out? What would be a “wow” for them? How do you currently reach them or what are your plans?
- How will your product or service connect people to a greater idea and to one another? By building relationships, you create lock-in. You make your product valuable by making it social. So, how will you build a tribe?
- In the industrial economy, value is created by making an object better, faster and cheaper. In the connection economy, value is created by connecting people to one another.
- Does use of your solution make it more valuable?
- Exclusivity can create value (you are one of the 1%). Connecting with the rare individuals who are like you is valuable, therefore more people makes your solution more valuable.
- Once you have a good idea, how will it travel? What virus will you attach it to?
- (See the books The Idea Virus and Positioning).
Financing the Business:
- How will you finance your business? Can you finance it yourself? Will you need a loan? Will you want / need investors? How will you share equity?
My Ask of You
If you’ve read this far, you must be really, really interested in getting your pitch right. Here’s what I would ask of you. Starting a company is hard. If you’re going to go through the trouble of starting a company, choose to make an impact. The world needs your unique gifts. Go for it. And if you need some help, pitch me.