Exercise
Explain what your startup does in 5 words or less.
Action Item
Do this exercise before your next pitch and incorporate it into your pitch deck — ideally in one of your first 3 slides.
Why This Matters
If you can’t explain what you do at the highest level, you won’t stick. VCs aren’t deep into the nuances of your industry. Neither are customers. Keep it brief and succinct — again, counterintuitive.
A VC’s intellectual strength doesn’t always come from their depth of knowledge in a field or sector, but rather it comes from their 1) breadth of knowledge and 2) ability to quickly process the viability and profitability of an opportunity.
You’re Probably Thinking
Why would I dumb down my great idea? This is my chance to raise a lot of money, why short change or marginalize the company I’m building?
You’re not dumbing something down, you are clarifying your value proposition to the simplest terms. It is ok to trim the tree.
Have You Considered…?
Say you just pitched a VC and it went really well. That VC goes to tell his/her associates about your company. How will the VC describe your company to their colleagues?
Ding, ding, ding! The 5-word exercise.
A VC is itching to visualize or capture the essence of what big problem you are trying to solve. In the first meeting(s), they aren’t trying to go deep on your area of expertise — that is for due diligence.
They are trying to evaluate the concept and whether there is a large enough opportunity for them to pursue.
Examples
The 5-word exercise for game-changing startups (how they began)
Amazon >> Online bookstore
Chewy.com >> Amazon for pet products
LinkedIn >> Social network, resume for professionals
Salesforce >> Customer relationship management software
Airbnb >> Renting out homes, not hotels
Stripe >> Connecting websites to payment processers
GitLab >> Open-source software coding platform
Ro >> Digital, telehealth services for men
Master Class >> Online educational courses from experts
Cross-Industry Examples
This approach applies in other industries, too. Some famous TV / Movie concepts were pitched succinctly:
Seinfeld >> How a comedian gets his material
King of The Hill >> Andy Griffith is back, and he's pissed (source)
Alien >> Jaws on a spaceship (source)
The Jason Bourne Series >> James Bond with amnesia (source)
Portlandia >> Where young people go to retire (source)
The Office >> Working for the World’s Worst Boss
Ok, so Hollywood stretches it out to 6 or 7 words (#Dramatize).
Conclusion
But, if you can’t describe your startup concept in very few words, then you have work to do before you’re ready to pitch to investors.
Give this 5-word exercise a try and see how you fare.
