2. Why I don’t care about your technology!
I don’t care about your technology when you are pitching me as an angel investor.
At least I don’t care yet.
Leading with, and focusing on, technology is the biggest mistake I see many engineer entrepreneurs make. The technology is often what they are most passionate about and was the reason they created the company. Technology is also where they feel most comfortable and can speak most confidently. Unfortunately that comes at the expense of focus on customers and their pain points.
As a potential investor, I am much more interested in your business model than in the technology you use to create it. Who needs this thing? Why is the current solution not good enough?
Good enough is a huge barrier. Change is painful. A new solution not only needs to be better, it needs to be enough better that it is worth the trouble of transitioning, training, and integrating this new solution.
In some cases I have been pitched amazing technology for which there is no need at all. I see this particularly in security companies, but it also applies to others. As an example, a company might come to me with a new cryptosystem that is one thousand times harder to crack than the current standard 256 bit AES. However, nobody is being compromised because attackers are cracking their 256 bit keys. They are getting hacked every other way, but not that. So, why would anyone bother to implement this solution, even if it is better (which is unlikely)?
In your pitch, make sure you show that you actually remove a real and substantial pain, not just a theoretical aliment.
At the pitch stage, one of the only reasons I would want to hear about technology is when it is the basis for a barrier to entry. Your technology is either so well protected or so hard to build that other companies would have a hard time entering the market to compete with you. This is not easy to prove. You will need to show that they can’t simply engineer around your patents or the there is not a cheaper and easier “good enough” solution that they could deploy.
So, what is it about your technology that I, as an investor, absolutely need to know and understand? Don’t include anything more than that in your pitch.
Even when talking about the tech, tell me what it does more than how it works. I want to be able to picture your customer interacting with this technology. I need to believe that it will integrate into their workflow and that the transition will not be too painful for them.
We are just talking about the pitch at this point. In the pitch, your job is just to hook the investor. To get them interested enough to give you a second meeting. It is incredibly rare for an investor to feel a sense of FOMO (fear of missing out) from the details of the technology.
Once you get that second meeting and the investor is interested, you will certainly have an opportunity to talk tech. In fact the investor is likely to want a deep dive on the technology during the due diligence phase of the discussion. Just don’t push it up front.
If you were to give a short description of any recent unicorn company, you would realize that the details of the tech is not the story. Facebook, Uber, WeWork, Stripe, all have large engineering departments and use tons of technology, but an elevator pitch of those companies would not mention it.
Tell me your unicorn story. Then I will be hooked and want to understand the technology.
Please share the post unicorn elevator pitch for your company in the comments.
Till next time … Ciao
