When you’re doing a stage pitch, a demo can really liven up your connection with the audience. Plus, being able to explain what the product is and does while showing it in action is a great way to make a story visually interesting as well. That makes a lot of sense when you’re pitching in TechCrunch’s Battlefield, for example: If we had to sit through 200 back-to-back pitches where people were only using pitch decks, we’d all be comatose by the end of the first day.
When you’re pitching to VCs to raise money, however, there’s more to it. Before you start planning how you’ll demonstrate your product, you first need to consider whether you need a demo at all. The answer may very well turn out to be no. But there are other things you can do instead.
The problem with demos
Demos are high-risk, low-return activities when you’re trying to convince someone to invest in your company, and there could be many reasons for that. Demos take time to set up (are you connected to the Wi-Fi? Is there a firewall?). For privacy reasons, you can’t use live customer data, so you need demo data. And some things simply can’t be easily demonstrated. For example, with one of my past companies, a virtual events platform, the magic didn’t really happen unless there were at least a few hundred people live on the platform.
There’s a lot that can go wrong during a demo: They usually go longer than anticipated, and if you have to troubleshoot something on the fly, your nerves will eat you alive. And all for what? Unless you are building a very specific type of product that can be demoed in a boardroom or over a Zoom call, it doesn’t actually help all that much. Your investors are unlikely to be the target audience for your product, and they almost certainly aren’t domain experts to the point where they’ll know why your product is head and shoulders above the competition just by watching a demo.
Think about why you are sitting in that room in the first place. You’re there to raise money. To convince someone to invest in your company, you do need to summarize what you’ve done to date, sure, but the vast majority of your pitch should be about the future: what you are going to build, markets you’ll enter, customers you’ll woo, and all the wonderful ways you’ll change the world and make buckets and buckets of money along the way.
What to do instead
Put simply, investors barely care about your product the way it is today, which is what you’d be demoing. What they care more about is where you are going and how profitable that’s going to be.
You can’t demo the future, but you can paint a picture. Mock-ups, alongside your thoughts on why this is what customers will want and the markets this future version of your product will unlock for you, are generally a far better use of your time.
If you get into the diligence process and an investor wants to understand more about the product, that’s a good time to put together a video demo showing how it is meant to be used.
Realistically, however, a diligence call with one of your existing customers tells the majority of investors far more about your product than a demo ever could: It means they’re able to dig into what your product does well, how it works, and what the competitive landscape looks like. Is it priced well? Does it do what the customer wants? What do they wish it could do, or what could it do better?
Replace the demo with a screenshot or a photo or two. And your narration can go something like: “The product does X, which, unlike our main competitor Y’s product, fulfills our target customers’ value proposition Z, which is why they love our product. How much detail do you want me to go into?” In the vast majority of cases, that’s all the investors need, and you can move on to the next part of your pitch.
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