by Nicholas Benavides
High School students have been making headlines recently. More specifically, for the March For Our Lives protests that took place across the United States two weekends ago. Thousands of students gathered in Washington D.C. and at other major cities across the country to have their voices heard while advocating for stricter gun control. These protests were also largely organized by these same high school students. Although they’re better known for being addicted to their smart phones and seeking instant gratification, high school students are the next wave of leaders, innovators, and problem solvers, and they’re putting the world on notice. They’re passionate, determined, technologically savvy, and eager to take on some of society’s biggest challenges.
I founded the Blue Ocean Entrepreneurship Competition five years ago out of frustration with the existing high school business education programs and with the belief that that high school students are the next generation of CEO’s, entrepreneurs, and innovators. I hoped exposure to entrepreneurship earlier in their education would excite students about entrepreneurship as a potential career path.
Over the past five years, hundreds of teams of high school students have shared their original business ideas with us, and we’ve seen everything from innovative consumer products to urban farming, more effective bulletproof material to smart tampons, Internet of Things (IoT) devices to sharing economy apps. Each and every year, our judges are blown away by students’ creativity, poise, passion for their ideas, and quality of their presentations. Having watched and judged many of these pitches myself, I’ve learned a lot about what makes a compelling pitch. Regardless if you’re starting a for-profit startup or nonprofit organization in any industry, great pitches share the same key aspects. The rest of this post summarizes the key takeaways I’ve drawn from these pitches — I hope they’re helpful and feel free to let me know what you think in the comments.
1. Start With the Problem, Not the Solution
The most successful companies offer products or services that solve problems for many customers in a unique and valuable manner. Being unique allows these companies to capture a large percentage of potential customers and being valuable turns customers of your product or service into loyal fans. Over the years, we’ve seen that the most compelling pitches begin by defining the scope and significance of the problem they’re solving before introducing their solution. By starting with the problem, investors will be able to determine if the problem you’re tackling is significant for potential customers and if the potential market is large (i.e. if potential demand is large), which are often some of the most important factors in investment decisions. If the problem isn’t significant enough, customers won’t bother to buy your product or service. If the problem isn’t widespread enough, venture capital investors won’t be interested in the opportunity because their potential return is limited.
Starting with the problem also allows you to juxtapose the value of your solution with the pain points customers are currently facing, facilitating a more convincing argument. If you can clearly articulate the current challenges customers are facing and follow that with how various features of your product or service solve some of all of these pain points, the value proposition of your offering will be very clear to investors. While this won’t guarantee you’ll receive funding, clearly communicating the value of your product or service by starting with the problem will enable investors to make an informed decision on your idea.
2. Get User Feedback
One of the biggest mistakes we see in pitches is a lack of user feedback. Depending on the industry you’re targeting, it may not be so easy to get feedback from potential customers, but it’s always possible and extremely valuable. Getting feedback from potential customers can help you determine if you’re solving the right problem and if you’re adequately solving pain points for customers. Feedback can also give you more concrete evidence of demand to include in your pitch.
There are a lot of ways that you can collect user feedback, but you need to be careful because many methods can give you biased results. When we encourage students to collect user feedback, often their first instinct is to run a survey, but SURVEYS ARE BAD. The way you word the questions can significantly bias the answers, and the answer choices you provide project your own perception of the problem onto users. Surveys can be helpful, but they shouldn’t be your primary method of collecting feedback. Instead, we recommend conducting ethnographic interviews with potential users, which are very open-ended, less scripted, and allow users to carry the conversation in a direction that they see fit. This type of data collection provides much more valuable insights into user behavior and the problems they see as significant, which you can use to frame and develop your product or service.
If you already have a prototype, put it in the hands of potential users! It can be scary to put your idea out in the open because there’s a good chance the feedback won’t be as positive as you’d hoped, but the only way to improve your idea is to give it to potential users and see what they think.
3. Know Your Competition (or even better, don’t have any)
Most new products and services will face some direct competition from other offerings, and it’s critical that you understand how your product or service is different from the competition because investors will want to know what makes your offering better than existing products and services. Being knowledgeable about the current state of the market boosts your credibility with potential investors, and not being able to explain how your product differs from current solutions is an obvious red flag for investors.
Your product or service can be differentiated on many possible factors, including but not limited to price, ease of use, target customer, distribution channel, reliability/safety, or by incorporating features that competitors’ products or services do not have, developing something for the mass market. However, the key thing to note is that you want the factors that differentiate your offering to be significant to the customer — often times the ways in which companies or products/services are differentiated are not relevant to the customer, which limits the attractiveness of your solution in the eyes of customers.
Occasionally, new products or services are blue ocean ideas, meaning that they create new a new market, offer a radically different solution, and face no direct competition. These tend to be the most attractive opportunities for investors, as the chance of success is higher relative to a new product or service that faces significant competition. If you’re curious to learn more about creating blue oceans, I recommend that you read Blue Ocean Strategy and/or Blue Ocean Shift. These books include tools and frameworks to develop a blue ocean idea and many examples of companies that have applied this sort of thinking to create new markets.
4. Don’t Sell to Everyone
Another common mistake that we’ve seen with the student pitches is identifying the target market as “everyone.” While your product or service may have mass appeal, it’s not going to be adopted by the masses right away, and claiming that everyone is your target customer will make you seem foolish in front of investors. If there’s a particular type of person that your product or service is tailed towards, you want to learn as much as you can about these people in order to ensure that your product or service solves a problem that these potential customers are facing in a meaningful way.
If you think your product or service will have mass appeal, you still want to start by focusing on a particular user group that you think will be early adopters. By targeting a particular group, you’ll be able to more easily obtain feedback and refine your offering before rolling it out to the mass market, making it more valuable to customers by the time you do launch it widely. These people will also become loyal fans of your product or service and will prove valuable in word-of-mouth marketing when you do expand.
5. Pitch With Passion & Conviction
One of the strongest aspects of the high school students’ pitches is their passion for their idea or for the problem they’re tackling with their product or service. They’re typically very invested in their idea, and when that passion shows through in their presentations, it is contagious. Investors want to invest in entrepreneurs who are passionate about their idea or problem because there will inevitably be difficult times in the life of a startup, and passion for the problem or idea are critical in helping entrepreneurs stay focused, determined, and hopeful in trying times. So, I think the biggest lesson we can learn from these students is to let your emotions show through in your pitch because it’s an asset, not a liability.
I also believe conviction is a critical element of the delivery of your pitch. As a soccer player, I had a tendency to spend too much time trying to decide what to do instead of just reacting as the play developed. My coach used to always tell me “It’s ok if you’re wrong. Just whatever you do, do it with conviction.” That lesson has stuck with me, and I think it’s very relevant with regards to entrepreneurship. It’s important to act quickly, testing your hypotheses and obtaining results so that you can iterate on your idea. But more than that, it’s critical to believe wholeheartedly in your idea even if you’re wrong, because investors won’t believe in your idea if you don’t believe in it yourself. Elon Musk didn’t develop a fully electric sports car by questioning if it was possible. Steve Jobs didn’t create a device to store “1000 songs in your pocket” by doubting its feasibility. Successful entrepreneurs (and many unsuccessful ones, too) fully believe in their ideas, and you need to as well if you want to have a chance at succeeding.
I’m not sure if it’s a result of naïveté or something else, but high school students do an excellent job of pitching with conviction. Like Walter Wintle’s poem Thinking,
If you think you’ll lose, you’re lost
For out of the world we find,
Success begins with a fellow’s will
It’s all in the state of mind.
6. Skip the Financials (For Now)
One final recommendation — leave financial projections out of your initial pitch. Giving unreasonable projections will hurt your credibility with investors, and it’s so hard to project user adoption, revenue, etc.. For an early stage startup, projections are pretty much guaranteed to be wrong. As a result, it’s best to not include them in your pitch. You definitely will want to know about the financial conditions of the market (the total addressable market size (TAM), purchasing habits of potential customers, etc.), but projecting that you’ll break even in 24 months is likely inaccurate. If you insist on including financials in your pitch, put them into an appendix that you can show if investors ask questions with respect to finances. However, as a general rule, it’s best to leave them out of the initial pitch. As your company grows, the financials will become increasingly more important, but they’ll often do more harm for you than good at such an early stage.
From my experience listening to all of these pitches, I’ve derived 6 key takeaways:
1. Start With the Problem, Not the Solution — you need to prove you’re tackling an interesting and significant problem before investors will take any interest in your idea.
2. Get User Feedback — hustle if you have to, because this information is invaluable to you as your refine and iterate on your idea.
3. Know Your Competition (or even better, don’t have any) — know your competition inside and out, or be in a blue ocean.
4. Don’t Sell to Everyone — pick a target user group first and learn as much about them as you can before you launch to the mass market. They even might become your biggest fans.
5. Pitch With Passion & Conviction — passionate entrepreneurs whether the storm. “It’s ok if you’re wrong. Just whatever you do, do it with conviction.”
6. Skip the Financials (For Now) — projections are almost always wrong, so don’t worry about this part of the pitch so much.
There’s a lot more that goes into a great pitch, but following these 6 suggestions will get you well on your way to making a compelling argument about why your idea is unique and necessary.