“Be prepared for fundraising to be another full time job.”
People warned me about this, but it only hit home just recently. I was sitting by myself in a restaurant a short walk from the law firm where I was about to pitch a group of potential investors. As the meeting time drew near, I was aghast to realize that I’d spent six hours assembling a single chart in our deck. (Long story.)
Seriously, six f—ing hours? Extrapolate from there and you can see how weeks at a time seem to disappear.
Despite the time suck, pitching investors is mostly time well spent. Stress-testing your assumptions and putting the business under a microscope is important. It’s okay to not have every answer, but if your ideas crumble under scrutiny it’s time to go back to the drawing board.
The critiques may sometimes sting, but they highlight vulnerabilities while also helping you sharpen your pitch. Any product manager would benefit from the exercise. If nothing else, pitching investors is a good reminder that while solving problems is important, you’re still in business to make money.
Building a better mousetrap isn’t a business plan. As zealous as we are at UserMuse about solving customers’ problems, solving problems isn’t a business plan on its own either. Investors want returns. Your bosses do too, if you work for a company. And so should you.
You’ve Identified the Problem. Now What?
I’ll admit I was caught me off-guard the first time a potential investor asked me to get to the business opportunity and stop talking about the market need. As product people trained to be advocates for the user and buyer, that sounds almost sacrilegious – until you remember why we do this in the first place.
If you’ve done your homework, you should be able to convincingly demonstrate how your new product/service/feature addresses a real pain point for your market. Once accomplished, you have to put that to the side and in equally convincing fashion show a path to high return on investment. That requires doing a few things that give most product managers pause, in my experience:
- Setting a price on the new product/service/feature
- Setting customer adoption targets
- Projecting future revenue
- Committing other people’s time to ensure success
You can’t have a serious conversation about a product’s success without these things. If you want to sit at the big kid’s table you’ve got to be able to put together a business case that shows not just the market opportunity but also the potential return on investment for the company. If you have entrepreneurial ambitions, writing a good business case is good practice for putting together a compelling investor deck.
Three Lessons from Investor Pitches that Apply to Internal Presentations
If you work for company, you can’t exactly shop around for a team that buys into your vision the way you can with investors — you’re stuck with the executive team you’ve got for better or worse. But there are things about pitching investors that you can directly apply to winning your colleagues and managers over.
Other than compiling an effective business case, here are a few things to keep in mind as you shepherd your ideas through acceptance and approval internally:
- Proof talks. Don’t underestimate your ability to generate proof, even traction for an idea even if you don’t the authority to implement an idea yourself. Data from surveys and qualitative feedback from the market are likely to be far more convincing than anything you can say. If you can hack a prototype or even share screen mock-ups with potential customers for feedback, that’s even better. You don’t need permission to learn about the market.
- “Hockey sticks” are good. Don’t get me wrong: not everything can be a grand slam, and realism is a virtue. Few people can think big, and even fewer are comfortable sharing it. If you can envision a path to making your thing a smash hit that you really believe in, then say so. Remember, ideas tend to get less bold over time, not more. Don’t chop your legs off at the knees before you even get going.
- You’re selling you. For all the rigor that investors and executives put into making big decisions, there’s always some uncertainty. In the end, everything is partially a gut decision. Convincing your audience that you’re the person who can see the idea through goes a long way toward an idea’s acceptance.
Remember, everyone else’s excitement about your idea will at most equal your own.