Start and End Your Pitch with the Vision to Raise at a Premium, Creator Strategy Vs Challenger Strategy - Tactician: #0078

"You gotta start with the vision and end with it, too. It's like when you're watching those infomercials at 3 AM. They start with, 'This is going to change your life,' and they end with, 'So, are you ready to change your life or what?' And you're sitting there thinking, 'I guess I do need a blender that can also vacuum my house.'"

14/03/24

Start and End Your Pitch with the Vision to Raise at a Premium

Why Read:

• The article offers a strategic framework to craft a compelling story that balances emotional and rational appeals to secure funding.

Author:

• Scott Hartley, Co-Founder & Managing Partner at Everywhere Ventures

Link: 

• “Selling Vision vs. Traction”

Key Concepts and Tactics:

• Introduction to the "Hourglass" Narrative Structure:

  • "The advice I most often give is what I call the 'hourglass' narrative structure, or storytelling framework... The difference between acting on Broadway, or landing that Series A, is storytelling."

• The Importance of Storytelling in Pitching:

  • "It’s not about getting the script or having the words; it’s about how well you tell the story... The reason also is because buying vision is emotional, and buying traction is rational."

• First Gating Factor: The Size of the Opportunity:

  • "As a founder, you must therefore communicate the size of this opportunity... This is how you start your pitch, namely, you explain how HUGE this market and problem are."

• Second Gating Factor: Founder's Fit and Authenticity:

  • "The second gating factor a VC will look for is 'are you the right person to be solving this problem?' Are you being authentic, are you passionate, are you a gritty-as-hell person who is going to fight when it gets hard in year 4 or 5?"

• Third Gating Factor: Execution Capability:

  • "The third gating factor is 'can this person execute what they’re telling me they can?'... You are laser focused on this one very attainable, very addressable go-to-market, and better yet you’ve already been executing on."

• Closing with a Visionary Outlook:

  • "The zoom out at the end of the pitch tells the investor that you’re building something generational, something beyond a Feature, Product, or even a Company... You’re focused on knocking down bowling pins two, three, four as you expand markets, and you’re building a Platform, or maybe even a new Category or Movement."

• The Impact of Emotional and Rational Appeals:

  • "Emotional buys happen at a premium. Rational buys happen at a discount. Therefore you want to start and end your pitch with emotional resonance with your investor... Vision sells at a premium, so if you’re trying to make the impossible happen, this is why starting and ending with Vision in the hourglass works."

Creator Strategy Vs Challenger Strategy

Why Read:

• Decide whether to innovate as a category creator or a challenger, understanding the unique implications, sales dynamics, and execution strategies for each path.

Author:

• Anupam Rastogi, General Partner at Emergent Ventures

Link: 

• “Category Creator or Category Challenger?”

Key Concepts and Tactics:

• Introduction to the Dichotomy:

  • "Founders in Enterprise SaaS face a pivotal decision early: will you pave new paths as a category creator, or will you challenge established players with an innovative product?"

• Defining Category Creators:

  • "Category Creators are trailblazers developing new solutions for unaddressed problems or needs, thereby establishing a new market category."

• Defining Category Challengers:

  • "Category Challengers, on the other hand, enter a market with established players, aiming to offer superior products or value."

• Strategic Implications for Category Creators:

  • "For category creators, early demand gen revolves around customer education. They must experiment to discover the best channels to connect with the target audience [...]. Pricing requires careful iteration since there may not be established reference points. But the willingness to pay can be high if you solve a meaningful customer problem. With category creation, things can take a while to take off, and it’s crucial to stay lean and nimble in the early days."

• Strategic Implications for Category Challengers:

  • "For category challengers, once a beachhead is established, speed becomes paramount. Category challengers can often see strong results early on from established channels [...]. Innovative and efficient execution with these channels is key. Pricing structures may already be established, so the focus may be on providing better value or bundling."

• Sales Dynamics for Category Creators:

  • "Category creators initially face longer sales cycles due to the lack of established budgets and prior purchase intent. Creating a wide top of the funnel, consultative selling, and broad evangelization within prospective organizations are paramount. [...] POCs and land-and-expand may be crucial, allowing customers to start small and see value before making a bigger investment."

• Sales Dynamics for Category Challengers:

  • "For category challengers, sales cycles can be shorter, thanks to established budgets and customer intent, but competition may lower win rates. [...] A clear understanding and articulation of differentiation, especially in unmet customer needs, is essential. Once traction is gained with a differentiated offering, incumbents will take note and may replicate your messaging, and eventually, features. Creating network and community effects, continuous innovation, and sharp execution can be key."

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