How to get relevant pitches from startups?
Spolier alert: be clear on what you ask for.
Issues shared by Anna Farberov, general manager of PepsiCo Labs, after having had 3500 meetings with startups are hardly unique:
No personalization. Most startups use a generic investor deck to pitch to VCs, corporate innovation teams, and experts. Market size and revenue potential aren't relevant to innovation experts. They want to know how you can help them solve their pain. Don't waste valuable time on irrelevant background information.
Lack of clarity. I was asked to review a startup. I read their deck and website and could only gather a connection to Last Mile delivery, but I had no idea WHAT problem you are addressing and HOW you will solve it.
React defensively to questions. When we raise questions about different scenarios in an attempt to understand how the solution actually works, some startups answer defensively.
BONUS tip: If you pay attention to the questions, you will get a vital and valuable preview of industry needs.
Underestimating corporate complexity. In their attempt to succeed and sell their solutions, some startups overpromise their ability to scale and integrate quickly with a large organization. They are unable to keep up with fast scaling, which may paralyze or even kill the startup since they direct most, if not all, their resources to one (big) client. It's tough to recover when you underdeliver and lose credibility and attention.
Not taking no for an answer. On the one hand, I admire their determination. On the other hand, these startups reach out to different executives after the experts already said no, which causes the executives to ask the same experts to assess the startups again. This only causes inefficiency, waste of time, and despair.
Here are specific things any corporate can do regarding each issue she brought up.
1. & 2. Regarding no personalisation & no clarity
Be clear on their agenda, expressed in a paragraph form, avoiding PR-speak. The latter has its place, but not in call-for-ideas.
Clearly state what are they looking for. For example: specific problem statements, interest areas, desired outcomes, change to be achieved, and so forth.
Internal investment thesis should be so clear that only relevant pitches end up in front of the evaluators/experts/decision makers.
3. Regarding defensive reactions to questioning
Prime the conversation.
"We are here to understand your idea, and how it could fit into our existing business. That means we might ask some difficult and potentially uncomfortable questions. We will do our best to do so in a respectful manner. Remember: we are questioning your idea, not you!"
I've evaluated thousands of pitches and used above framing countless times. Being defensive is a human reaction—after all ideas are often extension of ourselves.
Asking good questions is a skill. Invest in it.
4. Regarding underestimating corporate complexity
Provide a high-level overview of the vetting process.
"So, you pitched us? This is what happens next."
A simple process chart does wonders. Make sure to include decision points.
Also, provide a high-level take on how further collaboration might look like. "This is how we work with startups!"
Just a brief description of possible pathways, e.g. partnership, acquisition, joint venture, vendor...
5. Regarding not taking no for an answer
Clearly communicate a decision: Yes, No, Maybe (No but with a chance to review in X months or after Y has been changed).
Maintain an internal database to so the same idea doesn't have to be evaluated ten times.
None of the above points require significant investment. They do require some dedicated work though.
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