Judging Pitches: My Three Favorite Questions

Founders often ask me: “Dave, I’m pitching next week, what do you think the judges will ask me?”

I remember feeling nervous about pitching when I was an entrepreneur doing some of my early startups.

Just the thought of me submitting a pitch, and then anxiously wondering if my idea is good enough, or will it be laughed at, was enough to give me sleepless nights. It seemed like the worst part, but submitting wasn’t the worst part for me.

My anxiety went to new levels after being accepted to pitch in a competition.

After being accepted to pitch I realized I was about to put my hopes and dreams out into the world. Out in the world where people can say “It sucks!,” “You suck!”, find mistakes in my work, or tell me “Dave, your idea is awful!”

I know part of that is newness. When I’ve never done something before I don’t know what to expect. My mind will turn it over and over wondering about it.

The past few weeks founder have been picking my brain about is, “Dave, what will the judges ask me?”

What will judges ask me?

I agree with my friend Rick Mason, “The questions judges ask are unpredictable and highly personal.” I tell my friends to prepare talking points that paint themselves in the best light. I advise to always answer the judge’s question and then work to pivot into your talking points.

Judging panels here in Michigan usually include sponsoring organizations like:

• Economic development organization members
• Bankers from the commercial lending department
• Intellectual property lawyers
• Accountants

The other two types of judges I often see are:

• Investors
• Entrepreneurs

As Rick said, questions stem from the judge’s backgrounds. I expect lawyers to ask about patents, contracts, or other legal matters. I expect economic development members to ask why doesn’t an existing company do this, or how do you scale this.

Sometimes I’ll hear a judge ask an off question — like in a pitch about Uber for college students who want beer, an accountant might ask about the fermentation process. In this case, I find usually they have a personal experience, for example, the accountant might be a home brewer or own a brewery.

If you can research the judges to get an idea of what they’ll ask about.

Ok ok ok, so now I’m going to tell you my three favorite questions to ask.

What is your revenue over the last 12 months and what was your revenue last month?

If I don’t see a revenue chart in the presentation, I’m most curious about revenue. I want to have a rough idea of the size of the business and growth. Hearing the answer to this question gives me both.

12 months revenue gives me an idea of the size of a business. 1k,10k,100k sized businesses are at very different stages.

The reason I want to know their revenue for the last month is that I get an idea of their growth trajectory. For example a team with 100K 12 months revenue, but 20K last months revenue is on track for 240K revenue over the next 12 months. That is almost 3x year over year growth! On the other hand, if a team has 100K 12 months revenue and 7K last months revenue, they are on track for 84K over the next 12 months. They are going in the wrong direction.

What do your customers love about your product instead of your competitor’s solution?

Being as good as a competitor isn’t good enough to grow quickly. For example, I love Uber compared to public transportation and taxis.

I love that

• I can pull out my phone and have a car coming to zip me off in under a minute
• Uber works the same at home as when I’m on the other side of the country
• I always have a good idea of my estimated time of arrival at all points
• the payments are frictionless

Often times I see startups competing on price: we are cheaper. I don’t like that answer. I want to see we are cheaper and we are 10 times better. Going back to Uber, getting someone to use an app just because it’s cheaper is a tough sell. Unless customers are spending a significant percentage of their income on the app the savings are meaningless.

Another answer I hear often is we are better because we use blockchain, machine learning, etc. I don’t like these answers either. I want to hear what customers love about the product. How does it empower them to do something they couldn’t do before, or make their experience 10 times better.

How are you going to get your first customer?

When a startup pitches me and they haven’t sold yet I ask them how they are going to get their first customer? At the idea stage, a startup is theoretical. The founders have a lot of ideas about how their product will be used and how customers will love it.

When a customer swipes their credit card or writes a check, that is when I see startups going from theoretical to practical. I have an easier time talking to founders with customers because their answers are based on what they’ve experienced.

Those are my Three Favorites

I’m an investor and those are my three favorite questions.

1. What is your revenue over the last 12 months and what was your revenue last month?
2. What do your customers love about your product instead of your competitor’s solution?
3. How are you going to get your first customer?

The answers help me determine if I should learn more about the startup to assess their investment potential.

P.S. Thanks to Rick Mason for reading an early draft of this.