Lecture in Åbo Akademi's Project Management course. January 2015, Turku, Finland. Topics: pitching, startup marketing

1. PITCHING & CONTINUATION
Åbo Akademi, 16.1.2015
Joni Salminen, Ph.D.

2. PITCHING

3. BASICS OF MARKETING: STP
• Segmentation: What are the possible customer
groups the market can be divided into? (Age, gender,
location, purchasing power; B2C vs. B2B)
• Targeting: Which of those groups is our customers?
(Not always can you tell; that’s why talk to many
people.)
• Positioning: How are we different from competition?
(Always consider indirect competition & the simplest
solution approach.)

4. BASICS OF STARTUP MARKETING:
CPS
• Customer: Whose problem we want to solve?
• Problem: What is the problem we are solving? (Problem-
solution fit)
• Solution: What is our solution? (Product-market fit)
• Questions to answer:
 Is the problem we are solving REAL? (I.e., do potential customers
really think it’s a problem for them.)
 Is the problem we are solving WORTH solving? (From business
perspective.)
 Are the customers we think of the RIGHT people? (Maybe we are
solving the right problem, but for the wrong people.)
 Does our solution really solve the problem? (Think of pen and paper
test, or NASA.)

5. FIVE TIPS FOR PITCHING
1. CPS: customer, problem, solution (every pitch
has to have them)
2. Copy structure from good pitch decks (search
in Slideshare!)
3. Time it (don’t exceed your given time)
4. Alternate pitches when talking to different
people: see what USP’s most resonate (you
can keep diary to do it systematically)
5. Simplify, simplify, simplify (instead of saying
”this could be used by x, y and z”, say: ”this will
be used by x”).

6. BRANDING SUPPORTS YOUR PITCH
• In marketing, appearances matter. Before you have
a beautiful product, make it seem like you already
have it.
• Branding can give you…
• credibility
• more professional image
• more interest from potential customers and investors
• Potential ways to use branding:
• brochure (b2b)
• business cards
• landing page
• logo
• mockups
• slide deck
• t-shirts.

7. PRACTICAL THINGS FOR PITCHING
1. Make a list of things you need (money, team-
mates, mentors, introductions to useful contacts…)
2. Mention this in your pitch (if you don’t tell what
you need, it’s harder to help you)
3. Make sure everyone agrees on the pitch and
knows it by heart (everyone has to know how to
pitch regardless of their role)

8. CONTINUATION

9. HERE ARE YOUR CHOICES…
• ALWAYS, the choices are to scale, pivot, or kill
• scale: turn it into a real company
• pivot: change the idea, team, or market
• kill: just do something else.
• Remember, most ideas suck. (They don’t work as
businesses.)
• That’s why you have to fail a lot to make a real business.
• It’s not for most people, and that’s fine. (However, startup
mentality is useful in any organization.)

10. IDEA x EXCUTION = OUTCOME
Idea
Execution
Good (+2) Bad (0)
Good (+2) Amplified success Failure
Bad (0) Failure Disaster
• Bad idea, good team: 0x2=0
• Bad team, good idea: 0x2=0
• Bad team, bad idea: 0x0=0
• Good team, good idea: 2x2=4

11. TWO WAYS TO COME UP WITH A
STARTUP IDEA
• Deductive: spot a macro trend or a lucrative market
from ”helicopter view”. (VCs care about this, since
they think of market size and big changes.)
• Inductive: spot a everyday problem of a customer
and solve it. (Then later on you will find out how
scalable business it is.)

12. WE ARE ALL BOUND TO OUR
ENVIRONMENT
Turku
Finland
Europe
World
Hence, our ability
to come up with
good business
ideas is limited.

13. EXPERIENCE MATTERS
As you gain more experience of a specific
industry – which is often referred to as domain-
specific expertise – you are able to recognize
opportunities you never thought of.
That is why many students learn about business
development, work in the industry, and only then
create their own business.

14. IS YOUR IDEAANY GOOD?
• Vitamins vs. pain killers…
• Vitamin syndrome: a nice-to-have product that no-one
hates, but does not love either. This will most likely fail.
• Pain killer: a must-have product the customer cannot live
without. If your product would disappear tomorrow, the
customer would be really sad.
• Most startup ideas are nice-to-have. They will fail because
of that.

15. IT’S MOSTLYABOUT VALIDATING
BELIEFS
• Some are right, some are wrong
• Just aknowledge they are beliefs, not facts
• Then get facts
• This is called ”get out of the building” by Steve Blank

16. WHAT’S THE DIFFERENCE BETWEEN
USERS AND CUSTOMERS?
• Customers pay, users don’t.
• The curse of indirect business model: ”We want to
make something people use, but don’t have to pay for.”
• Most startups using an indirect business model fail because they
don’t have any money.
• Because they are not selling anything, also investors don’t want to
give them money.
• Silicon Valley is an exception. Turku is not Silicon Valley (beware of
the Valley Syndrome!)

17. TWO SCHOOLS OF THOUGHT
• Paul Graham: “Make things people want.”
• Joni: “Make things people want… to pay for.”
The first one targets users by providing a useful
service with the assumption that money can be
generated later on in some way. The second one
goes straight after business. Both can work, but the
second one is easier!

18. IN STARTUPS, MARKETING AND
CODE OVERLAP
Customer development Product development
You need to find a really
good marketing guy that can
translate customer needs
into technical requirements.

19. STARTUPS OFTEN OVERLOOK THE
IMPORTANCE OF…
• selling: without money there is no business
• distribution: you can find resellers who sell your
product
• advisors: people can really give you their time and
help you grow through their network
• you need a lot of help to grow a business –
remember to look for help, be humble and
appreciative.

20. PRODUCT-MARKET FIT (Marc
Andreesen)
• If the idea doesn’t work, change it
• If the customer doesn’t work, change it
• If the product doesn’t work, change it
• If the team doesn’t work, change it
• CHANGE everything to make a sellable thing.
• A vital change is called pivot.

21. PIVOTS AND PATH DEPENDENCY
• The end result is often different from what was initially
thought of
• However, the initial idea influences how the project will
evolve
• This is called path dependency
• Therefore, startup parameters matter. Although a good
team can improve, by choosing a bad idea it is worse off
compared to another team choosing a good idea.

22. THE DANGER OF RUNWAY
Time
Chance
of
success
…even if you bootstrap,
life gets in the way!

23. SUNK CODE FALLACY (Ries, 2011)
• Tendency of people sticking to bad choices because they have
costed time and effort.
• AVOID THIS: ”I have gone through so much effort to create this
feature, so we’ll keep it.”
• Rather than writing perfect code, hack things to work at
minimum viable level
• If the product has genuine demand* (small chance), you can restart
and do it properly
• If the product doesn’t work (big chance), you anyway have to forego
your earlier work.
• *Genuine demand: People are willing to PAY for the product.
(In most cases, forget about indirect monetization – it is much
harder.)

24. NEXT STEPS
• Decide if you want to continue
• Analyze if you need extra help (cf. Walkbase)
• Consider applying for Startup Journey in Boost Turku.
• You can have a good idea but not the team; don’t worry,
new people are out there.
• You can have a bad idea but a good team; don’t worry,
new ideas are out there.
• All you need is motivation; everything else can be figured
out.

25. STARTING A COMPANY
• Who can help:
• Boost Turku (networking, advice)
• other startups (advice)
• Potkuri, Creve, Science Park (advice, office space)
• When officially starting a company, most important thing
is that you have a customer or a very certain way to
get it/them. Until that you can stay non-incorporated.
• Scaling: getting funding or turnover in order to grow a
company – in other words, you hire sales people,
marketers, developers, customer service, etc.

26. Some reading
• Eric Ries: Lean Startup
• Steve Blank: Four steps to Epiphany
• Cindy Alvarez: Lean Customer Development
• Alistair Croll: Lean Analytics
• Joni Salminen: Startup dilemmas: Strategic problems of
early-stage platforms on the Internet

27. THANK YOU & GOOD LUCK!
Joni Salminen
joolsa@utu.fi
Ph.D., marketing
Turku School of Economics