In a previous blog article I suggested the proper flow and order of topics for your pitch deck (see article here). Now I’d like to dive into the Problem section with a suggestion on how to describe the actual problem you solve. Many startups use industry statistics and other factoids to do this. For example, “65% of small businesses in the US report struggling with _____”. These factoids are commonly strung together in succession to support each other and help demonstrate a clearly recognized problem.
While it’s absolutely helpful to use statistics and factoids to justify your problem statement, it shouldn’t be the only way to describe it. Instead, start with a story that explains the problem. The subject of the story can be a real customer or a hypothetical one. Telling a story about a specific person/company that experienced a specific problem with specific attributes is much more effective than just statistics. Here are some examples of how to start the story:
- One of our customers is Shockwave Innovations. They had a problem related to _______ (finish telling the story).
- We’ve met with a lot of companies in the ____ segment. One thing we heard over and over is _______ (insert problem). For example, at Shockwave Innovations ________ (finish telling the story).
- Meet Gordon Daugherty. Gordon is founder of Shockwave Innovations, an angel investing and startup advisory practice. When Gordon wakes up every morning he ________ (tell a “day in the life” story that accentuates Gordon’s problem).
Don’t just rattle off a checklist of issues as your story. In other words, the following sentence isn’t storytelling: “When it comes to Gordon’s blog, he struggles to get comments from his readers, he never seems to find time to contribute new posts and he doesn’t know how to market himself to get more followers.” Instead, reword it something like this: “Gordon decided that his blog should be a primary way to brand himself in the startup world. But in the past three months he has only written one new post. And when it comes to marketing himself using social media and online advertising, nothing he does seems to bring more followers. He’s frustrated, disappointed and thinking about putting his blog on hold for a while.” Notice how the re-write establishes a purpose and describes things in a way that causes a feeling of empathy. If done correctly, the person you’re telling the story to should feel the pain being described. Don’t you feel a little sorry for poor Gordon?
Start with the story and then follow it with the statistics that back you up. This corresponds nicely to my recommended pitch deck flow of Problem then Market. The transition to Market works well if you start with factoids about the market that relate to the problem you just described. Then continue on with more information about the size of the market and things like that.
The other thing that’s great about this storytelling approach is that when you get to the Solution section, you can come back to your story. Example: “Remember the problems Shockwave Innovations experienced? After they implemented our solution, they _____ (benefits realized)”. Then go on to describe the various attributes of your solution, etc.
In summary, people remember stories much easier than they remember factoids. So make your stories real and memorable by painting a descriptive picture like done in the example above. Help the audience actually feel the pain. Don’t achieve this by blowing things out of proportion but rather by giving enough “color” to the story to make it understandable and believable. Practice the story on someone and have them tell it right back to you. Two days later ask them to recall the story again and see what they remember and what they don’t.
Check out my other blog articles on Fundraising here.
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