Ahh, the demo day. The arbitrary day the accelerator decides it is time to throw its babies to the world of investors. The number of accelerator directors I have asked the question “why is your program 3 or 4 months” is probably in the 50’s and the number of times I have not heard a thoughtful response is 100%. It is almost as if “that’s what everyone else does”.
This post though is not about being cynical, but more about what I have learned over the years and on what entrepreneurs can gain from my experiences of managing and running 12 demo days and helping close to 150 companies pitch, position and excite audiences.
First, it is important to set context. I am assuming you have a mix of investors and some non investors as well at your demo day. You have been through a 3-4 month program and have been practicing your “pitch” for a few months once or twice a month at least. I am also assuming that your pitch is about 3-5 minutes and your goal is to get investors interested enough to setup a follow on meeting to understand your company in more detail to express interest in investing.
I know that YC demo days have people in a frenzy with some investors texting they are “in” a round, even before the entrepreneur finishes their pitch, but for most parts I am going to assume that’s a rarity. For the rest of us, mere mortals, the pitch is an opportunity to prevent the audience from going to their smartphones distracted or otherwise bored by listening to pitch after pitch.
Here are the 10 things I have learned, in no particular order.
1. Show energy and passion – always be selling
You are in the spotlight, so if you dont wear your passion on your sleeve, you will likely get no attention. Even if you are a mellow person and tend not get excited much, find a way to show as much excitement you can about your company, the market and the opportunity. Investors are judging you and if “you dont seem excited about the opportunity”, they dont believe they should be either. You have been given an opportunity to sell your vision and this is one of the biggest opportunities you can get.
2. Visuals are only a prop – You should be able to tell your story without slides as well
Things have gone wrong with the deck or the projector only 2 times during the entire demo day for the 10 times we have done them, but those 2 times resulted in a meltdown for our founders. They were among the best in the cohort, but they forgot their pitch, got distracted and flustered when their slides went “blank”. Investors went believing that if they were to react this way if their pitch went dark, how would they react when sh*t hits the fan at their startup. Be cool. Use the Pitch deck as a prop alone.
3. Your goal is to a) get people’s interest to have a follow on discussion and b) to prevent them from getting distracted by their smart phones and c) ensure you are memorable enough for them to “tweet” about it, or make a note to email you for a follow up meeting
Dont imagine that someone will walk up after the pitch and give you a check. That would set you up for a high bar in terms of goal for your demo day pitch. You only goal should be to be memorable enough to get a follow on meeting.
4. Show traction – quickly after the problem and solution
Traction trumps all evils in a startup. Not a complete team, but have great traction – the investors think they can help you build the management team. Market sizing is still relatively small – the investors will try and help you expand to adjacent markets. But no traction? You cannot manufacture that.
5. Be specific about the total market, and addressable market
Most entrepreneurs have the time to only show the largest number possible and hope investors bite. Be more thoughtful than that. Over 60% of the folks that “went one level deeper” about addressable market, I have found, got a follow on meeting. The ones that showed a large gazillion dollar market, found investors ignored that number largely.
6. Tell stories that your day in the life has shown you, avoiding using phrases like – big problem, painful, etc.
If you generically use statements like “the problem is massive” for our customers, without being specific about the pain points, you are likely going to be dismissed. I’d highly recommend you use your “day in the life” scenarios to showcase what your user actually goes through as problems and how they are handling this right now.
7. Answer the question – why are you the best team to execute this problem
Many investors will tell you they invested only because they felt this was a great team and nothing else. That’s a lie. A big lie, but nonetheless, the team is one of the most critical aspects of any software opportunity. Just telling the audience who is in your team and letting them make the inferences as to why the team is uniquely suited to execute this problem is poor judgement on your part. Ensure that you let them know about your experiences, the fact that you have worked together, or that you have each unique learning that together helps build a great company.
8. Be clear about why and how you are different
In the absence of having something different to say, most customers (and investors) assume you dont have anything different, so you will compete on price. Competing on price is okay, but that usually signals a race to the bottom. The important thing I have learned about differentiation is that you have do something different in all aspects of your pitch – why is your team different, why is your product different, why is the market you are targeting different, why is your go-to-market different etc.
9. Your positioning forces people to figure out quickly if they are interested – get it right.
The first single line positioning is the thing almost everyone will listen to, which should be 5-15 seconds, when they are deciding if your pitch is worth listening to. Get it right and do it by A/B testing your startup’s positioning over time. Tweet-ready positioning is the best way to get some attention from the audience online.
10. Work your audience – Focus, 10 sec pause, Connect, Sweep 2 sec, Repeat. Make eye contact with as many people as possible. Engage your audience with a rhetorical question if you can.
These are tips for the folks that want to be a better public speaker. If your accelerator offers an opportunity to avail the services of a pitch coach, use it. As often as you can. While it wont make or break your company, the best public speakers generate more interest (not necessarily better, but more) for their companies than the ones who “show up and throw up”.