Is This a Business? Questions About Your Pitch – and How to Prepare for Them

By: Elizabeth Usovicz, Principal of WhiteSpace Consulting, as part of a series she writes for ACA aimed at entrepreneurs, "Your Pitch is Just the Beginning." 

Former British Prime Minister Margaret Thatcher once quipped, “Power is like being a lady... if you have to tell people you are, you aren't.” The same could be said about a startup. If people have to ask if it’s a business, it isn’t one - yet.

I recently heard two different founders pitch their concepts for the first time. One spoke at an open pitch event, describing a broad social media platform that would unite people of different backgrounds and tell their stories. The second founder presented a next-generation technology/entertainment concept to a small advisory group, in preparation for approaching investors.

Both entrepreneurs were passionate about their ideas. After their pitches, they also shared the same first, perplexed question from their listeners: “Is this a business?”

Preparing a pitch isn’t just about sharing your big idea and your passion for it. Pitching requires thinking through the “hard candy shell” that shapes and stabilizes your ideas as a business with revenue potential. Here’s a short list of some essential questions to answer in your pitch:

1. What business are you in? Describe the products, services or software that your business will produce, based on your concept. Make it easy for your listeners to grasp the business potential of your idea.  One of the most effective business descriptions I’ve heard came from an entrepreneur who described his company as “where farm equipment meets Big Data.”

2. How are you different? Whether you acknowledge them or not, there are very likely competitors to your concept, and your listeners are going to make comparisons to those big players. Some may even search online for competitors while you’re pitching. Know who your competitors are before you pitch, and explain your significant points of difference.

3. Can you describe a use case? Describe how your product, service or software works, and how a user or customer interacts with it. Investors are listening for evidence of a simple and enjoyable customer experience. This follows the logic of Margaret Thatcher’s quote. If you can’t describe the user experience in simple terms, it probably isn’t a business.

4. How are you going to make money? A startup that cannot or does not make money isn’t a business. It’s an idea. Spend quality thought time on revenue generation – who will pay, how much they will pay, and why they would pay. When asked, both of these entrepreneurs suggested an advertising revenue model, but had not identified the target advertisers, pricing models or purchase motivations.

5. How will you generate customers/site traffic/content?  This is the companion question to #4. You need to have a clear vision and description of the target users, customers and/or advertisers. What are their characteristics, demographics, behaviors and values? How will your product, service or software meet a need or solve an issue for them? 

Even if it’s your first pitch, advisors and potential investors are listening for answers. Don’t make them ask. Incorporate these basic questions into your pitch and demonstrate that you’re building a business around an idea.