Pitching your Prototype
You’ve founded your first company, FashionFindr, and built a prototype for your first app, which uses machine learning and AI to identify the items of clothing from images and allow you to purchase them easily.
The prototype is the first pass of your solution. It's not pretty, nor complete, and often not tested. Frank Robinson said when he coined the MVP term:
... think big for the long term but small for the short term. Think big enough that the first product is a sound launching pad for it and its next generation and the road map that follows, but not so small that you leave room for a competitor to get the jump on you.
So the next step is to get your app in front of potential investors and customers to enable you to grow it into a full-fledged product. Your prototype isn’t complete, so you need to wrap your core concepts into a story that showcases what you have now and what your goals are for the app. Let's look at how to construct that message.
Before you create your pitch, you should answer three questions:
- What's my mission?
- Who am I talking to and why would they care? Or sometimes: what do they want?
- What do I want?
Let's break these questions down and see how each of these questions could be articulated as slides in a potential pitch deck.
Note: This pitch is heavily skewed towards a product-based pitch. But it will hopefully provoke ideas for other types of offerings. It is also somewhat opinionated and is designed to be adapted or spark ideas that meet your needs.
Start with the mission
At the core of your prototype is the mission: the problem you're solving. You need to be able to articulate that mission quickly and concisely and leave a hook to engage whomever you are pitching. This is often described as your "elevator pitch": a pitch given in the time it takes you to ride an elevator.
Hi, I'm Jane Smith, the CEO of FashionFindr. Last year, I went to a friend's wedding, and I was really taken with one of my fellow guest's outfit. I forgot to ask her where she got the outfit at the wedding, but when I got home, I realized I had a photo of the outfit. I tried to use the picture to find the outfit but found the experience frustrating and ultimately unsuccessful. That inspired me to build FashionFindr, an app which uses machine learning and AI to identify fashion brands from photographs and makes it easier for you to find and buy the clothes you love. Our users convert 16x times more often than traditional sales techniques. We're seeking investment, and I'd love to demo our product for you.
A prototype pitch is an extension of your elevator pitch, with the bonus of having something to show your audience beyond the story in your elevator pitch. You can turn your mission into some key opening slides for your pitch deck.
Since you hopefully have slightly longer than an elevator ride to explain your product, your story is just the start, the initial hook for your audience. You also want to make clear the problem you're solving.
What's the problem
State the problem you're trying to solve. This should be at the heart of your prototype. In our example, identifying a clothing item and its brand from an image is hard and time-consuming. Even if you can, it's often difficult to track the item down to a store to buy it.
Here's the solution
Once you've articulated the problem, you need to share the solution you've built to solve the problem. This should include any unique properties or competitive advantages your product brings to the problem. In our case, our FashionFindr app makes it easier to identify who makes the clothes you want using machine learning and AI and allows you to buy those clothes without leaving the app.
Why are we the right people
Lastly, we need to tell the audience why you and your team are the right people to solve this problem. This could be based on experience, specialized knowledge, or empathy for the customer. If you don't have relevant experience, then articulating prior success is a good substitute.
Know your audience
When you're pitching to a specific person or group of people, investors, potential new customers, a conference or event audience, you need to tailor your message to that audience.
Every audience has a different focus, let's look at the two audiences you'll likely most frequently pitch to: investors and customers.
Investors are focused on your product, plans, and your potential to make money. They want to be sure the money they invest with you gives them a return.
Investors also want to know the mechanics of your business. It's not just your product, it's also the go-to-market strategy that explains how you will acquire customers for your product and make money. When pitching to investors, it is crucial to research them and what they are interested in. You should review their prior work history, their other investments, and their interests.
Pay particular attention to those prior investments and their investment thesis. There are some critical questions to answer, that might help understand if this investor is going to be interested in you?
- Have they invested in other companies like you? Is there an overlap between your company and another of their investments? If there is, then you'll need to differentiate yourself from that other investment.
- Do they invest in companies in your industry?
- Do they invest in companies with your business model, for example, some investors are only interested in software-as-service companies, or companies who are business-to-consumer (B2C) or business-to-business (B2B).
You'll need the answers to these questions, and the insights into the investor, to either incorporate into your pitch or be ready to address them if the investor asks.
Customers are focused on your product and how it helps them. They want to ensure choosing your product is the right solution that will deliver them benefits like more sales, cost savings, productivity increases, or other benefits.
For FashionFindr, maybe you're pitching to a fashion or retail company to add their products to your app. The customer will want to understand:
- Why they benefit from being part of your ecosystem.
- How any integration will work, and most importantly,
- How much money they will get from the deal.
For customers, you need to understand their products, markets, current competitors, their business model and be able to articulate how you fit into their world.
Connect with the audience
You'll need this information about your audience to both set the stage and to answer questions they will have for you. For FashionFindr, it could also be essential to find an entry point: a resonance that allows the investor to see the problem in light of their own experiences, empathize with the customer or engages their economic interests. This entry point will enable us to share, to a more receptive audience, why our solution solves the problem.
Explain your business
Once you have articulated your extended elevator pitch and identified what your audience wants to be addressed, then you can share the operational details of your business.
The most brilliant, beautiful, or useful product is only as good as the go-to-market strategy you adopt. If no one uses your product, then you've failed. A go-to-market strategy, the story of how you'll acquire users and generally how you'll make money, is crucial to demonstrate to your audience.
Explain how you will get customers
You need to explain your go-to-market plan, starting with the size of the market opportunity.
Then explain how you will acquire customers. This should include the channels you plan to use, for example, advertising, influencer outreach, content, or the like. If there are unique or specific marketing techniques or channels that make your go-to-market stand out this is the place to highlight them.
As well as any techniques planned, you should indicate your targets for customer acquisition and the time frame over which you intend to acquire them.
Explain your revenue model
The other side of your go-to-market plan is how you plan to make money: your business model or monetization strategy. Some investors are open to a strategy of building a product and growing its customer base and monetizing later, but even those investors are usually interested in your future plans to make money.
For a pitch, you generally don't need to go deep into numbers, although you should have that data available because you're going to be asked if the investment proceeds. You should identify the specific revenue model, for example, subscriptions, per unit, and your rough expectations on revenue.
Note: Some people are okay with not having a fully explored business model. The Field of Dreams approach of "build it and they will come" is often cited as an alternative approach. You gather a dedicated, large scale user base and then identify how to monetize the product using that captive audience.
Bring people into the product
Show, don't tell.
You’ve already gotten a story going in the FashionFindr pitch deck. Now you need to think about a demo. A demo should be compelling and reflect the story you’re telling, with an emphasis on the solution your product provides. It should hit points of innovation, disruption, and differentiation in your product.
Have a plan
Firstly, don't run through the prototype without a plan. You want to carefully map out each aspect of the prototype you want to demonstrate and ensure you have documented the perfect flow through it. For FashionFindr we might:
- Launch the app.
- Select an image to use as a search source.
- Search the image and return the items of clothing in it.
- Select an item and purchase it.
This shows the typical journey of a user through the product.
What to show
You should ensure the demo shows the key user flows in your product. You need to coordinate what you demonstrate with the solution you've articulated to the problem. It should call out the unique features of your product or its differentiation from other products.
It's also important to think about a live demo versus a "canned demo". A "canned demo" is prerecorded or staged. If you're worried about the product crashing or failing then a "canned demo" is an option but remember it's not likely to inspire confidence in your audience. It's always best to show a normal user's experience.
You should conclude your demonstration with a quick walk through of your product road map. This is especially true if your prototype lacks a key feature that represents product differentiation, for example if you haven't built it yet.
The last component of a pitch is the ask. This might be a call to action to use the product, to buy it, or frequently, to raise money to develop the product further. For FashionFindr, they are seeking 2 million dollars in investment that they will use to develop the prototype into a fully-fledged product.
In some regards, the ask is the easiest part of the pitch. You only need to articulate:
- What you want.
- What you are going to do with the results of that ask.
In FashionFindr's case, they are looking for 2 million dollars in seed funding.
They are going to spend it on customer acquisition and growing their team.
One way to wrap up your ask is to explain, if you succeed with the product, what your proposed exit strategy is. This might be going public, growing a private company, or being acquired.
With our successful seed funding we aim to grow our customer base to 3 million users by 2022, producing 90 million dollars in revenue and thus be an attractive target for an acquisition or merger with a large retail company.
In wrapping up our module on pitching a prototype, there are some broad tips that are also important to share.
Firstly, be passionate in your pitch. A sense of genuine enthusiasm and passion for your mission and your product will be apparent to your audience and sends the message that you're committed.
Secondly, think through what your audience might ask. Identify a "frequently asked questions" list of things you've been asked or expect to be asked. Have answers to those questions. Looking and acting like you have everything at your fingertips and are the subject matter expert will make you appear confident and help earn the respect of the audience.
Thirdly, be authentic and honest. If, you don't know the answer to a question or you get asked something you haven't prepared for, don't wing it. Instead, explain that you don't have the answer right now and that you'll get back to them. This is a far better approach than answering a question unprepared or disingenuously.
Lastly, practice does make perfect. Have your pitch down cold. Repetition will make you comfortable and appear confident. Pitching is a stressful process, knowing your material inside and out, is one way to reduce the overall stress of the situation.
James Turnbull leads Startup Advocacy for Microsoft Azure.