Not to be confused the with 7P’s of marketing, the 7P’s we’re looking at are most helpful for clearly and simply thinking through your idea. Once refined, they can be a perfect starting point for drafting a pitch deck as well. For that reason, we’ll call these the 7P’s of Pitching. They will be key for understanding the idea for yourself, your team, and your potential investors.
When should you draft these? Long before any MVP app development. In fact, you could draft these the same hour you come up with an idea. But the main goal is to, on just one or two pages, create a clear overview of your business model in a way that is pitchable. This could be done in tandem with or prior to a business model canvas.
The 7P’s of Pitching are:
Start here. If you started with a solution this may blind you from seeing whether there actually is a problem. Define the problem your customers would face and who those customers are. How much of a pain is this to them and why? If it’s not that big of a deal, it’s probably not worth pursuing so you could stop here. If it is, carry on.
Here’s where you get to creatively invent a new, or modified, solution to an existing problem. Think both in terms of the actual service/product and the benefits that result for your customer. Want to know more about how to test these ideas? Read this article.
If the market size is too small, it may not be worth pursuing, especially for investors. But it is also important to think about how much of that market could your team actually address, and how much could it win? The terms for these, total available market (TAM), serviceable available market (SAM), and serviceable obtainable market (SOM). As an example, the North American home renovation industry is valued at 800B. Sounds impressive, but investors will recognize that is unattainable. Then think- what if you focus just on your particular area, like your province or state? Let’s say that then drops to 1.5B. Then we say how much you might actually win of that in the next 5 years. Depending on how world-changing your idea is, this could be a fraction of a percent or large. For the sake of example, we’ll say 1%, or $15,000,000 in 5 years. If you can accomplish that, then investors may believe that you could accomplish 1% of the 800B, or 8B. The goal is to be realistic and conservative while seeing if there is potential for big returns.
Where are you geographically in this market and is there a particular niche you should start with to get your early adopters? Who/what are your direct and indirect competitors? I.e. how do people presently solve this problem? What unique advantages may you have and be able to offer?
Here you can set some goals and make an initial go-to-market strategy at a high level. For example, if you want to hit 15M in sales in 5 years, we can make a smaller goal to hit 3M in 3 years to start. Then we can reverse that with a customer factory 10x model which would say that you need to hit 300k by year 2 and just 30k in year one (this is a software model; if it’s a service model, you’ll likely need to reduce your multiple). So if you need 30k in one year, how many customers do you need per month? How will you get those first customers? The initial plan does not need to scale, but you need a plan to get your first 10-100 customers.
The team is one of the most important parts of making a plan a reality. Most investors put a lot of weight on the people executing, sometimes not even looking at the idea of they trust them based on past success. Who is on your team and why are they a great fit to make this happen? Are there gaps in the team to execute that you may need to find someone to fill? Try defining that role if there is. If it's a CTO or technical co-founder, consider reaching out to us to help with our CTO for hire plans.
This final hook, or icing on the cake, is often a guess. At the same time, if there is no reward, people aren’t interested. Will this be profitable or have a solid exit strategy? What kind of return will result from it if they partner with you? You can think for yourself, investors, and even potential partners or staff. If you want to get even deeper- what impact will it have on you and the world?
And those are the 7P’s of Pitching! We’ll continue to release more tips and tools for going from day one of an idea to your first 100 customers. In fact, we’ll be releasing our own software that was built following all the advice we’re giving you. We’ll add the link to it here when it’s live.
Happy building!
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