At Big Fish, we hold the subject of entrepreneurship very dearly. As small businesses certainly drive the future of our economy, there’s just a certain special feeling we get when we help a small company successfully pitch to an investor or large client. There’s a certain magic that needs to be applied to startup pitches. It takes real research, focus, and strategy to make that first big sale.
One of our favorite large organizations that works hard to educate others on startup presentations is none other than Dell. The company is currently hosting Dell World, one of the nation’s largest annual conferences that celebrates the latest developments in innovation, entrepreneurship, and technology.
For this month’s guest post, we have chosen to feature special guest Blake Menefee co-founder of the Dell Center for Entrepreneurs sharing his tips on how to pitch your startup. As a special bonus, Menefee shares his six-startup mistakes to avoid.
If your startup has an amazing platform, product, or software, you’re probably in the process of staking out big enterprise clients to target.
Everyone loves your product, but that’s not enough.
Too many pitches to big brands result in an executive saying he or she can’t be sure the startup will be around in the future. In most cases, that’s the end of the conversation, but it doesn’t have to be.
To strike a deal with a big company, you have to get its attention, find the “trigger,” and determine the best way to sell.
Step 1: Lock Down Your Value Proposition.
Let’s get back to that amazing product your company makes. Before you approach any big brand, ask yourself what problem it’s solving.
Take Flickr, for example. The website started as an online role-playing game, which included a photo-sharing tool. The game’s reception was lukewarm, but the photo-sharing tool was popular. Once the company recognized its value, it changed the product and the way it was marketed.
Before you get your product in front of people, ask, “Does this solve a problem for a target market, or am I acting on a hunch?” Who cares enough about this problem to give you money?
A good value proposition is targeted at the customer’s main decision-making drivers and communicates your value clearly and concisely. Identify the people who need this product the most, explain the value, and use this as your foundation for applying the next steps.
Step 2: Get Their Attention.
Ask yourself this question: “Who are my target’s customers?” One of the first passes in is through its customers — your target is spending a large amount of time marketing to and networking with them.
Get off your butt and get in front of these people. Ideally, you should spend 50 percent of your time at the office and 50 percent meeting and networking with the right people.
One of the most common excuses I hear is that people would rather make contact through email, but if you aren’t networking face-to-face, you’re doing it wrong.
Step 3: Find the Trigger.
Before you can make a deal, you need to understand what would motivate a brand to change. The most effective way is to find a trigger — such as new industry regulations, a change in leadership, or a merger — to fuel a company’s appetite for change.
Services like The List do this well. Through these types of programs, you can monitor companies for staff changes, get predictive insights on mergers and agency changes, and keep up-to-date on industry trends.
Step 4: Decide How to Sell.
Once you’ve identified the trigger to activate a brand’s desire for your product, you need a sales strategy. Will you sell through its customers or sell to the key people who influence your decision maker?
If users are your best champions, selling through them is a solid move. I’ve seen situations where a proof of concept filled such a huge void that when it was taken away, all hell broke loose. Selling through can take more time and work, but you’ll prove this product is important to your target’s customers.
In other cases, someone who influences your target could be a better way in. This could be anyone in this person’s sphere, from a co-worker to a friend. Your target trusts this person’s insight and values his or her opinion above that of others’.
6 Startup Mistakes to Avoid.
When progressing toward the action stage, you need to instill confidence in the company. The period between desire and action is what I call the “chasm of death” for enterprise deals, but it doesn’t have to be if you avoid these blunders.
- You look/act small.Act like a Fortune 500 company, regardless of size or culture. Be polished, crisp, and prepared for questions.
- Take personal ownership. The Escape Pod, a creative agency, signed OfficeMax as an early client. Founder Norm Bilow managed the strategy personally, demonstrating his commitment.
- Demonstrate your ability to scale.If you can’t, find a partner to help develop the proof of concept.
- Have references.Ask your largest clients to be references; ideally, ensure they’re willing to do this up front.
- Get your finances in order.Have your current books ready, as well as two- to five-year projections.
- Be persistent.Large companies have very long sales cycles. If you can’t strike a deal immediately, get your foot in the door with a smaller pact, and continue negotiating.
Making an enterprise deal is tough, but if your startup offers real value and something the brand needs, you can play ball with the big guys. It’s a different sales approach, but you have to be smart, professional, and — above all — persistent.
While we hope to spread this magic to entrepreneurs all over the world, we know we can’t do it alone. We need help from incredible organizations like Dell that recognize the impact of powerful presentations.
Are there any other tips you would like to share on pitching your startup? Please share below or follow our blog to keep updated with the latest in presentation trends and tips.
To learn more about Dell’s commitment to startup pitches and entrepreneurship, join the Dell World conversation with @Dellinnovators on Twitter at #DellWorld or tune in Thursday November 6, 2014 at 10am CT here on Channel 2 to watch the Tech Innovation Day Series: Pitch Slam, a showcase of 7 startups demoing their businesses to Michael Dell and other judges.
About our guest poster: Blake Menefee is a co-founder of the Dell Center for Entrepreneurs. He brings 15 years of emerging technologies and marketing experience to the program. Blake comes from a long line of entrepreneurs and, prior to Dell, he had a nonprofit startup and was the founder of a talent agency. Connect with Blake on LinkedIn.