kdawgkendyk-blog

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How to Pitch

How to pitch something properly is a valuable skill. We tend to think of these “pitches” as pertaining to a startup seeking capital, but we ‘pitch’ people on our ideas almost daily. This article opened my eyes to a new kind of pitching, but reinforced the idea of having a strategy going in, no matter the industry. People will always make snap judgment, try to bucket you, and analyze every word you say and move you make. I approached this post with the article in mind, but focusing on the type of pitching that’s part of my life – pitching startup ideas.

 I used to have a small business before Sloan and I have made pitches to investors, friends and family, as well as co-collaborators, clients, and interested listeners. Some of these pitches were about money; others were simply about explaining my business and why I thought it a good idea. At the end of this summer I’ll be pitching an idea again. My summer internship involves developing a new product idea for a beverage company and pitching it for additional funding.

 In thinking about my first investor pitch, I wondered what my judgment was from others and how I had judged those I had watched pitch those investors before and after my turn. For me the judgment wasn’t about creativity, but how entrepreneurial did I think that person was? Being an entrepreneur puts you far outside your comfort zone and for a lot of people, it’s an unpleasant feeling. Does this person seem like they can handle the tough upward battle? How hard has this person been working and what have they accomplished so far? Should they have accomplished more by now? Those were the kind of things I judged on; but how good was I really at making such judgments? I can’t say I know where these entrepreneurs are now, but let’s just say I wouldn’t place any bets on it.

 In thinking about how I could better improve my pitching abilities, here are some of the things I’ve learned…

 First and foremost, gather feedback from someone you’ve never met. We often rely on friends to give us feedback; friends are often already clued in on the business concept and can’t truly be impartial. You may not even be explaining the idea well, but they have heard the idea before in length and understand the concept. They’ll immediately miss the gap.

 Second, film yourself pitching. Even though it’s unbearably awkward, it’s eye opening to see yourself from a new perspective. In an effort to sound professional (which I thought I did), I saw myself as robotic in the playback and tried to adjust accordingly.

 Third, speak slowly. The pace of normal conversation doesn’t work in a pitch and we often speak more quickly when we’re nervous. Moving too fast doesn’t allow the listener to absorb your information in a meaningful way.

 Fourth, know your audience. Do research on them and find out their interests or causes they care about personally. See if you can tie your story back to one of these points.

 Finally, smile and be energetic! Entrepreneurship takes a lot of work and people want to know you have the energy levels to handle it.

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American Well

In evaluating the market challenges and opportunities, I first assessed at the benefits of the product, as well as potential problems. I then applied the pros and problems to each of the new market opportunities.

Pros:

Insurers: savings, garner favor with patients, modernize image

Patients: saving, increased flexibility, more privacy (depression ex), connection between PCP and specialist

Doctors: flexible work hours, additional revenue

 Problems:

Will it become too easy to access doctors? This could mean taking up doctors’ valuable time for minor items or extensive conversations.

Do doctors actually want more work?

Will this type of format be effective as a medical consultation?

Using the Pros and Cons to Address Possible Channels

Retail Clinics

Placing online care kiosks in physical retail clinics defeats the purpose of the online portal. This patient has travelled to visit a clinic and will likely be able to see an actual doctor. Yes, this patient may have to wait but their willingness to wait for a real person has just increased because of the time they have already invested into the process. In addition, American Well is in it nascent stages and likely won’t be able to increase the legitimacy of retail clinics because it is not yet established. If anything, it could reduce the credibility of both the clinic and the product by being viewed as a cheap alternative to seeing a proper doctor.

 Pharmacy Chains

I’m don’t think that there is as much value in accessing a pharmacist as a doctor for several reasons. First, extensive drug information is available online through the drug provider. If that drug is being used for a unique reason or if a patient requires special attention, it is the doctor who prescribed the medicine and not the pharmacist who would be the point of contact. Finally, there is the physiological connection to the doctor that lessens the connection to the pharmacist. A patient has confidence in a doctor to give patient-specific advise, whereas I think people relay on pharmacists for pharmaceutical use instructions.

Expansion

International expansion would result in a lot of regulation complexities but the same principles that support the American business hold. However, American Well has a limited amount of resources and should focus on building out its US business while the momentum is strong. Building the US business would also lend credibility to the company and make International conversions faster and less expensive, freeing up more capital of growth.

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Burberry

Burberry’s target market is young, affluent, and cares about fashion but not the same person who would probably shop at say Balmain. There is a distinction here, where Burberry is targeting a broader audience, with money to spend, but not so targeted that it caters only to the ultra-wealthy, ultra fashion conscious niche. The changes that Burberry makes reflect the characteristics of its target market.

From Old to Young:

Burberry uses its different lines to target very specific areas of the market that is has done its due diligence to define and understand. For example, I think the Prorsum line has a very specific purpose: it gives Burberry credibility in the fashion space so that it can continue to innovate and be modern without going against the tradition of the brand. In addition, Burberry positions itself in a price point that maintains its ‘luxury’ branding, but is on the less expensive side of the luxury spectrum. This allows Burberry to capture the interest of a younger demographic that is more fashion-trend conscious and price sensitive.

From Confused to Consistent:

Burberry’s runaway distribution and licensing resulted in a business that was used as an unsustainable cash cow, milking the brand for what it was worth until its ubiquity would eventually destroy the allure. Bravo’s reduction of the number of SKUs and limitation of licensing and distribution allowed the company to regain control over their own brand.

Old Risks to New Risks:

Although Bravo has mitigated the risk of losing its luxury branding by becoming too ubiquitous and being purchased by a non-aspirational market, the company has been introduced to a new risk. This risk is that Burberry is unable to carve out its own space in the incredibly challenging and competitive fashion market. Not the most fashionable, but not the least…not the most classic/traditional, but not the least, I think this kind of middle ground can lead to a target demographic that is not very loyal because there’s not an expertise that is admired. Outside of coats, I’m not sure that I can really define the aesthetic of Burberry. In addition, I think their dilemma of some customers only purchasing the brand for the prominence of the check is a prime example of lack of loyalty and appreciate for the brand, but rather a demographic that wants to launch itself into the world of luxury, without really being a true luxury buyer. I think their brand is too reliant on just the coat and the trademark plaid. It is still too ubiquitous in the sense that when you think of Burberry, that’s ALL you think of. 

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Singapore Airlines

Back in the 1950s airlines were mandated to charge the exact same airfare for the same routes. For this reason, airlines had to try to differentiate themselves in other ways: food. 

This anecdote came to mind when reading about how Singapore Airlines differentiated itself from competitors with its exceptional customer service. A tea-party test, dental checks, and grooming lessons definitely take employee hiring to a level I might expect for the White House. What is interesting is how it kept its cost competitive-with employees based in Singapore. It’s very impressive that a third world country could come to gain so much notoriety for sophistication in addition to technology.

To be honest, I’ve never understood the airline business. It’s infamous for its horrible margins, tough regulations, steep competition, and operational disasters. Air travel used to be the pinnacle of sophistication, but now I think that people have gotten to a point where they despise the entire experience. For that reason, now more than ever, people seek mental comfort more than anything. I realize when I receive the option of Terra potato chips or PopChips amongst other non-traditional snacks on JetBlue, I’m far more excited than I would ever be in any other situation. But in this situation, I’m trapped in a terrifying metal box in the sky and I’ll take whatever I can get that’s associated the least with air travel.

For this reason, I think it’s imperative that Singapore Airlines move forward with the purchase. Although the industry is suffering, it will eventually recover and at that point, the SIA image will be tarnished and its competitors will have gained an advantage. 

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Product Diffusion

After reading the “Four Products” case and before reading the “Five Factors” article I decided to think through what I thought might be five factors that would contribute to a product’s ‘diffusability.’ Based on the four products, I came up with the following factors: 1) Is it ‘worth’ it? Essentially, does the cost or burden of obtaining the item make it worthwhile; 2) Is there a network effect? 3) High word of mouth factor/novelty factor-are you going to hear about this from friends; 4) How foreign is the innovation-is it strange and unfamiliar; and 5) How strong is the need?

I look at Roger’s Five Factor to try and draw the parallels. Initially, they are more different than I would have expected, but upon further reading they become more similar. Drawing on my own intuition first allowed me to better understand the values behind these factors. Observability seems to be the main parallel, it is intuitive that a product that is discussed through word of mouth or has a high network effect would diffuse quickly. Complexity is somewhat similar  to my “how foreign is the innovation. ”One can imagine that a foreign product maybe complex in the sense that it is hard to wrap your head around or place into context. Trialability is an interesting factor. I think of similar value to ‘is it worth it’ to some degree. If a product is easy to obtain or inexpensive, one can test it with little risk. Relative advantage seems to parallel the values underlying ‘how strong is the need.’ Compatibility is something I might rename as social norms to express its real value. Based on these ideas, I create my own Five Factors:

Compatible w/ Norms

Complexity/Foreignness

Low Barrier to Obtain

Novelty/W.O.M/Network Effect

Worth the Gain

Now, let’s asses each of the four products using these Five Factors on a scale of 0-5 (0 being bad and 5 being good)...

Sliced Peanut Butter

5: No cultural norms against the idea

4: The concept is not complex or foreign (exists for cheese),although new for peanut butter

5: likely cheap and ubiquitous 

4: A novel food product, at least in the short-term that would likely be talked about

2: This is a tough one for me. On one hand I think bread ripping or putting peanut butter on fruit can be messy with regular PB; however, I think the consistency of PB is part of the appeal and by changing that consistency, the product loses part of that appeal.

Recommendation: Put into trial markets. Even though the five factors suggest success, my intuition says that people won’t react well to the ‘fake’ consistency and imagery of a more solid peanut butter square.

Silver Band Aids

5: No cultural norms against the idea

3: Despite what the article said about education on silver, I think the concept is clear and believable, supported by a trust in Bandaid brand

3: Depends on the final price point (likely high), but would likely be visible at all drugstores through Bandaid’s distribution

2: silver is interesting but people generally won’t discuss bandaids

1: I gave this a one because of the fact that people generally use band aids to treat extremely minor wounds such as paper cuts and scratches. For that reason I don’t think that the market possesses a need for more expensive, elaborate bandaids; however I do think there might be a smaller segment of people who are paranoid about germs even on minor scrapes.

Recommendation: Focus technology on hospitals for more serious injuries.

Satellite Radio

5: No cultural norms against the idea

2: New idea but relatively simple to understand pros/cons and features

3: Barrier to obtain is quite high HOWEVER key partnerships that allow the technology to come with new cars greatly reduce that barrier

3: People enjoy discussing entertainment and idea is somewhat novel (I remember first learning about satellite radio when I was listening to music in a friend’s car in high school)

3: This is a toss up because more affluent people will likely view the costs as quite minimal to the gains, people who spend more time in the car will place a higher value on the product (I think of LA as a target audience), and people who have it built into their car vs have to go through the additional work/cost will look at the worth much differently. 

Recommendation: Focus first on an affluent population that lives in cities with a lot of traffic and try to diffuse to general population from there. Work in more partnerships with major car manufacturers.

Smell Sensor

5: No cultural norms against the idea

1: Quite foreign, though understandable. It is hard to imagine the experience and how it would affect daily experiences.

2: Barrier to obtain is likely going to be expensive and product will not be sold in a large number of outlets

5: A new and novel product, it would be highly publicized and discussed

4: As one of the human senses missing from most entertainment experiences and with a culture moving in a direction of more and more immersive experiences (VR), there would likely be a lot of value in this technology.

Recommendation: Continue to develop technology and limit testing to niche markets (as they are doing with gaming).

If the factors and my interpretation of them are meaningful at all then their order of diffusion from best to worst would be: Sliced PB (20), Smell Sensor (17), Satellite Radio (16), and Silver Bandaids (14). 

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Corona vs Heineken Branding

The quote “people don’t drink beer, they drink marketing” by the former Heineken President is almost identical to a quote I read in a book about Anheuser Busch called Dethroning the King (the quote was from one of the previous AB CEOs). The CEO touted the idea that consumers couldn’t tell the difference between beer brands and that marketing was everything when it came to consumers’ purchasing decisions. What is interesting is that in the 1990s Corona had about 1/3 the marketing budget of Heineken, yet was able to grow tremendously. Clearly it was the impact of the messaging as opposed to its ubiquity.

From “Cross the Border” to “Find Your Beach,” Corona has adopted slogans that accurately represent what the brand aims to achieve (and what I believe it does achieve) in the minds of consumers: a beverage to be enjoyed in the spirit of fun and relaxation. But how does it achieve this? When I think about why this image is conjured so easily, I believe it is in part due Corona’s incredibly consistent messaging (which was supported by its right to approve all content from early on).  I also think that a small budget could have helped with consistent messaging. When you have fewer dollars to spend you tend to be more scrappy and creative in an effort to stand out from the crowd. You also have to focus your time and investment. From there, I think they stuck to something that was working.

While Corona’s advertisements helped to build a strong brand image in the mind of consumers, Heineken and other beer companies may have muddied their impact with vague or diverse messages, which is where Heineken was vulnerable. Where Corona created a relatable feeling, conjured personal memories, and gave clarity, Heineken’s branding was vague, not relatable, and unattached. The blue skies and clear waters of Corona ads juxtaposed with the black background of the Heineken ads are clear indicators of the stark differences between the brands. With a majority of beer drinkers being male and under 45, a growing microbrewery industry, and a 2x alcohol spend for those under 25, one might imagine the target demographic to be quite young, adventurous, and aspirational. When I look at the advertisements of Corona and Heineken, Corona appeals much more to those characteristics.

By the same token I think that hindsight is 20/20 and had Heineken been growing quickly, one might argue that young males aspire to work hard and ‘be the best;’ characteristics that would be better represented by Heineken vs Corona. In the clutter of advertisement, products, and daily distractions it’s almost a wonder that anything sticks. When I think of what sticks in my mind it’s what I see frequently that I can also relate to, think is funny, or find very useful. When it comes to actual purchases of a new product I think word of mouth is the strongest motivator. Thinking back, most of my non-apparel purchases are because of suggestions from someone in my life, not the company. That being said, sometimes it’s hard to tell.