Ever wanted to be a fly on the wall at an accelerator program? firma.de snuck into one of the pitch days of the eBay Startup Cup to show you what it’s like to be a team in a startup competition. As a bonus, we decided to use the opportunity to deconstruct what makes a good startup pitch.
The eBay StartUP Cup’s accelerator program
The eBay StartUp Cup’s mission is to foster entrepreneurship, create jobs by creating startups, and develop entrepreneurs by connecting them with valuable resources.
Startup teams that progress through the accelerator program receive mentoring and coaching sessions and many opportunities to refine their pitching skills in front of a panel of expert judges.
All teams accepted into the program walk away with a better business model. The top three teams that make it all the way to the end, get a cash prize and company incorporation package from firma.de.
Pitch Day #2 @ firma.de HQ: The top 12 teams pitch
The first pitch days were filled with 25 teams eagerly pitching their business ideas to get to the next round to receive expert mentoring to develop their business models.
A total of 12 teams made it into the next round and the second pitch day is all about showcasing what they’ve been up to since the last time they pitched.
Pitch, pitch, baby
In the startup world, pitching is everything. And, when attempting to materialise your business idea, you’ll have to pitch to investors – a lot!
Creating and refining your pitch is fundamental to your startup game, so that’s why the eBay StartUp Cup is all about pitching.
We sat in one of the teams, Himmlisch, pitching for their lives in the competition which we used to deconstruct what actually makes a good pitch?
Remember, you’re not just selling your business idea, you’re also selling yourself as a business person. Do you have what it takes to create a massive business? Your pitch must answer this with a definite YES!
Investors will be analysing you as much as your product. You’re not just pitching a business idea; you’re pitching your ability to execute that idea.
There is a lot of good content out there about how to structure your pitch and what it should contain. But, what makes a good pitch boils down to you. You need to signal to the reviewers that YOU have what it takes – this is what makes a good pitch.
Start with Why
Every startup pitch should have a narrative that shows potential investors that your personal motivation for starting a business is more than just money.
You won’t go the distance as a business person if money is your only motivation. Passion for what you’re doing is the only thing that’s going to keep your business running day in and day out.
Himmlisch’s founders Caleb Landis and Caleb Yates did this perfectly. They began their pitch by telling a story about starting a business to fill a void in their lives.
The product that Himmlisch produces, kombucha, is made by fermenting a mixture of tea, sugar (natural or refined), and an active starter culture. Like its fermented food peers (kefir, sauerkraut, kimchi) the drink promotes good gut health with its high probiotic content.
Kombucha has inspired a cult-like following around the world. However, an authentic version of the drink cannot be found in Berlin (and certainly not greater Germany). A fact which is quite strange considering Berlin is fast becoming the vegan food capital of the world; not to mention the many hipster cafes catering for the health conscious popping up everywhere in inner city Berlin.
Not being able to have their daily dose of the kind of kombucha they enjoyed back home (i.e. produced in a way that preserves all the health benefits), Himmlisch’s founders felt their lives were lacking and set out to do something about it.
Watch the video to hear the story of what inspired Caleb and Caleb to start Himmlisch:
The devil is in the details
In any pitch, you’ve got to demonstrate that you’ve left no stone unturned when it comes to the details of the business. Startups live or die by the details of their business. Missing crucial details can lead to disastrous results.
Why would investors give money to someone who doesn’t pay attention to detail? Not doing your homework when it comes to your startup speaks volumes about what kind of business person you are and will be.
Before you get yourself into any kind pitching situation, make it your business to know your business! This is what the Startup Cup accelerator program is all about – showing founders where their skill and knowledge gaps are.
Knowing every detail of your business is not only the backbone of a good pitch but also being a good business person. Below we sketch out what knowing your business entails.
Know your business
Devise strategies in every area of your business. As the founder, you need to have a helicopter view of your business – even in the early stages – which you need to demonstrate to investors (again, this is about selling yourself as a business person).
The Himmlisch founders were thrown questions about all aspects of their business, including, crucially, how they will build their brand. Watch their answer here:
They know the tight, well-defined customer segment they are targeting – CrossFitters. And, are communicating to them directly by marketing Himmlisch Kombucha as an integrated part of this lifestyle.
By doing this Himmlisch shows the panel that they really do know their business and instead of going for mass appeal (which is almost impossible in the saturated beverage market particularly for a small startup), they’re focusing on winning a customer segment that is well known to them.
Crunch your numbers
Knowing the details of your startup most definitely includes your business financials. When pitching you need to know your business’s stats back to front because you’ve got to be ready for anything!
During Himmlisch’s pitch, one of the StartUp Cup’s judges (and firma.de CTO/Vorstand) Christian Kedzierski asked them about the cost of crates for distribution. This is not part of the product but essential to the business’s profit margins.
Often founders are so laser focussed on their product they lose sight of the bigger picture. There is a vast difference between being a business person and a product manager. And, investors want to see that you are the former and not the later. So crunch the numbers and get to know your financials back to front!
Fortunately, Himmlisch had given this some thought and were ready to answer the questions thrown at them:
Share your unique insight
You have to show that you know the space that your startup occupies like the back of your hand. What can you tell your audience that is not widely known?
In Himmlisch’s domain of kombucha, it’s not widely known that not all kombucha is created equal. Many kombucha brands destroy its health-promoting USP by pasteurising away the probiotics or loading the drinks with refined sugar.
In their intro, Himmlisch’s founders demonstrated their unique insight in a unique way – by presenting all the kombucha that can be found in Berlin and highlighting their inadequacies.
Growth, growth, baby
Most importantly, any pitch you make to investors must demonstrate that your business has the potential for growth.
Himmlisch’s founders have thought about this in detail. Targeting the gym junkie/CrossFit subcultures with the aim of making it the sports drink for this market could mean strong (and even explosive) growth. But, most importantly, it means there’ll be demand for their beverage all year round.
As the clip shows, one of the Calebs reveals that he is a CrossFit coach and fitness trainer and thus has in-depth knowledge of this scene. This shows Himmlisch isn’t attempting to break into this market blindly.
Put yourself in the reviewers’ shoes
Optimise your pitch for the investor’s/reviewer’s state of mind.
He or she will most likely have heard pitch after pitch to the point they’ll all blur into one. Your job then as a pitcher is to help your reviewer see what makes your company exceptional. Make it as easy for them as possible.
If you can’t articulate what makes your business exceptional, then you shouldn’t become a business person at all.
We think that Himmlisch did this! Their beverage has a unique selling point (it’s delicious and contains magical bacterial that makes you healthy) with a tightly defined fanatical customer segment (CrossFitters). And, they brought their drink along for the judges to sample – making the pitch a multi-sensory experience.
When two become one: You are your startup
In the end, what makes a good pitch depends on you. Because whether or not your business idea can be realised starts and ends with you. You as the founder must actively signal in your pitch that you are indeed a good business person.
The Himmlisch founder’s made a pitch for a drink product far more compelling because of what they packed into their pitch to sell themselves as successful founders. They know their product because they make it themselves, they know the details of their business because they’ve done their homework, and they know their customer segment because they’re part of it too.
Want to know more? Get all the details about the eBay StartUp Cup:
Craving some tasty authentic kombucha? Follow Himmlisch:
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