The Perfect Product Pitch

Your product pitch isn’t going well and the reason is suddenly clear. No-one else thinks the idea is much good. If only the clock could be turned back and an extra week spliced in, then this could all have gone so much better. Or could it? Here’s the checklist you’d have needed; filled with the 12 essential things you already knew but somehow forgot this time.

Rule#1: Explain the usefulness of the idea in one sentence

Any aspiring moviemaker, salesperson, social networker or evangelist knows that you have to explain your killer concept in 30 seconds if you want anyone to listen. Yes, the old elevator pitch. It doesn’t hurt to relate it to what your listener already knows too. There’s going to be a hiccup if you’ve got to explain particle physics before they get it. Before your audience starts getting ideas about how close this thing is to reality, BJ Fogg recommends explaining how long you’ve been working on this right up front; to create a realistic expectation.

Rule#2: Show that the product is dramatically better than current products

According to Doug Hall, it is critical to explain the one or two most important benefits of your product. Surprisingly, mentioning any further benefits actually decreases your chance of success. That needs to be immediately followed by two supporting arguments. Firstly, why should anyone believe that you can deliver those benefits and secondly what is the most dramatic, meaningful difference between this and other products?

Rule#3: Understand exactly who will buy the product

Google probably knows more about you than your own government by now, so it follows that you could find out quite a bit about the exact kind of person most likely to buy your product. If that doesn’t work you could always buy some research. What about their lifestyle drives their burning desire for your product? Very often, you’ll learn more from observing the way people feel about things than how they are able to articulate those feelings. What about them will cause them to perceive your product as really quite a lot better than alternatives? The sagest advice is that if everybody is a core user, nobody is a core user. It is extremely unlikely that your product will make dramatic difference to everybody, all the time.



You’ve explained the usefulness of your product idea in one sentence, shown that it’s dramatically different and figured out exactly who is going to buy it. Even a hardened skeptic would have to give you a few more minutes before torching your proposal. How do you use those precious minutes?  Here are the next 3 rules:

Rule#4: Show an understanding of how the product fits into a person’s life

It’s time to transport your audience into the future, to a day when your new product is a happy part of someone’s life. Artists and illustrators would use a storyboard to sketch the scene. Photographs can work very well too. What you want to show in a few frames is the context that a person will experience the product in. Understanding the circumstances surrounding the product is very useful in refining the product idea. At the very least it demonstrates some understanding of the user's point of view and how that’s different from the point of view of the people in the room looking at your PowerPoint.

Rule#5: Show some proof that the product actually works in real life

One of the things that distinguishes inventors from other types of product developers is that they tend to have a prototype handy. Not much captures the imagination of an audience like a working model of something new. Even if it’s puffing steam and dripping oil, a prototype lets everybody know how big the challenge is, how much of it has been nailed and how much is still to come.  Most of all, a working prototype is proof that the product actually does the job it is meant to do.  

Rule#6: Describe the product’s usefulness in a quantifiable way

Clayton Christensen says that a good way to understand your product is to understand the job it will be doing for someone. The well known analogy is that people don’t want a quarter-inch drill, they want a quarter-inch hole. Of course, whatever that job is, it should be poorly served by existing solutions. If it’s at all possible to quantify the difference between the old way and the new idea, do it. It makes for a convincing argument. To use another wood shop analogy, you could say; “When preparing to cut a piece of wood with a saw, people want to minimize the time it takes to make an accurate measurement. Ordinary measuring tools are clumsy and time-consuming to use accurately.” Then the pay-off line; “The special guide reduces the time it takes to measure and set-up a cut by 25%.” People need it, they can’t easily get it, this thing does it, bingo!

If you’ve made it this far into your product pitch without everyone glazing over, you’re probably going to get to finish your presentation. So now you can relax and give a bit of background information before delivering the most important bit of information; the product’s revenue potential.

Rule#7: Describe the thinking behind the product

You might want to head off some time-consuming and arduous cross-questioning by describing what lines of thinking you’ve discarded in the past. Of course then you’d have to say why have you’ve chosen your current approach. It’s not necessary to go into detail but the people listening to you need to be able to make their own minds up about whether your idea has been tackled in the most promising way.

Rule#8: Explain what potential customers think of the product

If the budget allows  good qualitative research, commission it by all means. If not, a good indication of the product’s likely appeal can be obtained with a simple questionnaire. It’s critical that no-one closely involved with the project be sent to gather this research. They’re likely to sell the idea, however tacitly, to the interviewees.  This kind of research doesn’t need hundreds of respondents. Usually as few as 20 or 30 properly filtered respondents will give a good idea of whether the product has the right appeal or not. The filter to be applied is simply the core user description from Rule#3. Without going into the psychology of the interview situation, there are at least three points to note. First, the object is to understand whether the person sees any valuable, rare benefit in this product that they would actually pay for. Second, dead end questions (for example yes/no questions) are much less helpful than open questions that don’t lead the witness and allow them to express their opinion. This would include, for example, asking whether they see any difference between this and other similar products. Finally, the most important question is going to be something like "Why wouldn't you buy this product?".  This is to discover whether there are any hurdles to this person adopting this product. People overwhelmingly prefer the status quo. Almost every new product has to displace some existing product or preconception in your customer’s life or face utter failure. This is a good place to find out whether your product has enough appeal to do that.

Rule#9: Estimate the potential revenue of the product

As a project develops, sophisticated financial analysis may become necessary but, like all of these rules, the idea is to arrive at a realistic guess early on. Working on a scrap of paper or a quick spreadsheet, what is your best estimate of the retail revenue of the product over time? What key assumptions are you making about the size of the core market? Awareness levels? Distribution coverage? Sustained market share? Price? Repurchase rates and repurchase cycles? In other words, nothing that the census bureau and a bit of web surfing can’t turn up.

You’ve presented nearly your entire product idea in under a half hour and three slides remain. Here are the last three rules before you finish.

Rule#10: Show that there is inherent intellectual property that can be defended

Intellectual Property for our purposes here describes the valuable ideas that could defend your product in a competitive environment. Usually we’d be talking about robust intellectual property such as a utility patent, however that’s not the only kind. Proprietary processes, economies of scale, exclusive supply deals, speed to market or your company’s powerful brand name all create barriers to entry for competitors and leverage for negotiation when selling the product. All to make dealing with you the easiest, most logical option for your partners and tricky for competitors. In addition, it’s taken for granted that the idea doesn’t infringe on any one else’s idea. That’s easily and checked on Google but much more thoroughly so by your patent attorney.

Rule#11: Admit that there are unanswered questions (even doubts) about the product idea

Of the roughly 30,000 new product introduced by the consumer packaged goods industry every year, 70% to 90% will not be in the market after 12 months. Clearly, there is no such thing as a “sure thing” in this business.  You gain credibility if you acknowledge this. You may have unanswered questions about practicalities like production or selling price issues. They could also relate to intangibles like the product’s likelihood of attracting investment. Telling potential partners your doubts encourages them to think of solutions together with you.

Rule#12: Demonstrate that this could form a growing business

Product ideas that have the potential for expansion into a range of products or an entire new business have the edge on one-hit wonders. After the realism of the previous rule, this is the opportunity to show some optimism about the potential beyond this idea. The previous slides should have answered the important business questions, this one reminds everyone why they were worth asking in the first place.

By now you’ve realized that this series is not perfect and should actually have been called “A Pretty Good Product Pitch”. Nonetheless, these 12 rules are a fast way to summarize the key facts that decision makers need to evaluate a product idea.  They’re also not a bad way to sort out your own thoughts about that hit product you have in mind. And to make sure your next product pitch ends in success.

The Perfect Product Pitch is a 4-part series by guest contributor Tasos Calantzis of Readymade. It covers the 12 essential things you already knew about pitching a product idea to your boss, client or VC guys but forgot last time around.  Thanks go out to Dave Bayless at Evergreen Innovation Partners for providing the basis for this series.

First published on 29 September 2006 at Core77.com