Tech firms preparing their pitch to analysts spend too much time crafting the story about their own solution, and nowhere near enough time thinking about how to build a relationship with the analyst. As one of the CMOs I work with put it to me: “my spokespeople know our plan, but they don’t know their audience”. That doesn’t seem to be generally the case with start-ups. Indeed, there’s a lot tech giants can earn from start-ups.
Luckily, I’ve had the opportunity to witness more pitches than most people. I’ve bought and sold a few businesses and been in the audience for hundreds of different pitches. Over the last four years at the University of Edinburgh, I’ve tutored dozens of teams of student entrepreneurs through courses I help run for entrepreneurs completing our MSc and MA degrees. At the end of the academic year, they pitch their businesses to investors with experience in the Motley Fool everlasting portfolio. I’ve worked my way through the investors’ feedback forms to get their perspectives on those pitches.
It’s fascinating to compare those entrepreneurial pitches with the pitches to analysts I recorded for my PhD fieldwork. You’d imagine that senior executives would be better, and certainly more practised, at these pitches than our (admittedly talented) entrepreneurs. Some of the differences I notice are surprising.
What start-ups get right in the pitch
These entrepreneurs typically will often:
- say up front that they want connections and help from the pitch, not just insight;
- try to blur the lines between themselves and their audience. When one of them is speaking: they pay attention and emit the sounds and body language of an audience;
- pick out the sort of supporting evidence that their audience will be responsive to;
- explain not only their solution, but the value they create all through the cycle of supply, consumption and transformation;
- admit go-to-market limitations, for example, focusing the initial distribution of a globally-valuable produce to a modest market;
- personalise and humanise themselves, with humour and context;
- as a team, design flow of talk-time between them frequently and smoothly; and
- address not only their customers’ need but also the needs of their investors and channel partners.
Of course, some of this can be taught, and things like the Kea development workshop can give spokespeople a huge life. However, the key difference is motivation. The young entrepreneurs I am working with have big stakes riding on their pitches, and their hope is that long-term relationships will result. So, they need to not only create a win for their audience but also show that they create value for their whole supply chain.
What the tech spokespeople can get wrong
Some spokespeople also know the stakes are similarly high with industry analysts, and some of the slip-ups and many potential pitfalls are well known. Often, however, the motivation just isn’t there to go beyond a solution sales pitch and to really create value for the analysts. That’s not their fault completely. It reflects the way that AR people don’t get spokespeople and salespeople to really use analysts as much as they could do. As a result, many spokespeople don’t seem to really value the analysts beyond the content that might be produced. So, that means that often important things get missed, including discussions on categories.
Ironically, even though the entrepreneurial pitch is really about a transaction (selling equity) it seems to be vendor spokespeople who are often the more transactional.