Behind every startup is a great pitch, that crucial conversation in which an aspiring entrepreneur explains their idea to potential funders. Adam Grant, Wharton School professor and author of Originals, sat down with LinkedIn co-founder Reid Hoffman to outline four key components of a strong pitch. Their tips are applicable for both the Silicon Valley crowd and for anyone who is trying to make their ideas heard.
- Pitch early and often.
“Instead of always be closing, always be pitching,” said Grant. While many entrepreneurs fear mimicry or theft of their next business venture, the risk of having an idea stolen is lower than one thinks. Truly original thinkers “test tons of ideas and fail more” in order to get to the good ideas. Instead of being a singular eureka moment, creativity is “actually a bunch of ideas you sort through.” The important learning curve happens when you’re constantly producing and evaluating new ideas instead of pinning your hopes to a singular dream.
- Have a problem to solve.
Before launching into an explanation of their business plan, model entrepreneurs explain the market need they’re addressing. A strong opening pitch involves the the investment thesis: three to seven “things that if you believe, I want to be a shareholder in this business.” Sure, your business might make the world a better place—but what is lacking from the world that necessitates your business in the first place? The best practice is to always “state the problem before you outline the opportunity.”
- Ask for feedback.
When it comes to pitching, blind confidence will only get you so far. Instead, asking for advice signals that you are a thoughtful entrepreneur. As Grant pointed out, many people buy into the myth popularized by Henry Ford’s famous quote: “If I had asked people what they wanted, they would have said faster horses.” This doesn’t mean asking for advice on what your product should be. “Instead, you want to ask people, ‘Does this version work? Would you buy it?’”
Who you turn to also matters. Seek out the disagreeable givers in your life, “the people who are gruff and tough on the surface, but underneath have your best interests at heart.” When Hoffman started LinkedIn, two thirds of his network called it a “valueless network” and said the idea was “crazy.” Instead of being deterred, he used their feedback to reshape his product. “That’s really thinking it through and caring about you.”
- Know your weak spots.
While pitching Opportunity at Work, a diversity-driven scholarship fund that would connect students to tech boot camps, Hoffman was quick to point out that scaling could present an issue down the line. Identifying the risks and potential pitfalls of your idea shows investors that you have thought through your options. It also sends the message that you are treating them as a partner, not just a source of funds. Hoffman spoke from his experience: “Which risk you’ve identified tells me how you are thinking about it.” That doesn’t mean that great entrepreneurs self-sabotage their pitches. Rather, they know when to acknowledge their shortcomings. “The most important thing,” added Grant, “is to maintain a healthy degree of self-doubt.”