If you end your entrepreneurship class by having students pitch their companies, you may have seen:
A handful of pitches are great, but most are…meh.
Shark Tank Pitches vs Process Pitches
Most instructors run some form of Shark Tank, Dragon’s Den, or investor-oriented pitches, students try to convince judges the business model they’ve been working on is worth investing in.
We’ll refer to these as “Shark Tank” pitches.
Shark Tank Pitch Pros
- External stakeholders
In the typical Shark Tank-style pitch, students experience a sense of urgency and have to perform in a high-stakes environment. This pressure is a good introduction to how entrepreneurship feels. This approach increases competition among students which can yield some improved results for some, albeit not all, students.
Speaking of competition, Shark Tank pitches are nice in that they help prepare students for other competitions – idea pitch competitions, business plan competitions, and so on. Students who perform well in this environment can travel to other campuses and communities and secure prize money to further their idea.
Finally, this format makes it easy to invite community stakeholders into your class experience. Most people are familiar with Shark Tank and this style of pitch so it’s relatively efficient to onboard judges to create a novel feedback experience for your students. This can also help build community stakeholder participation in your entrepreneurship program, which will benefit students far beyond this one pitch contest experience.
Shark Tank Pitch Cons
- Penalizes students who test/invalidate their hypotheses
- Disadvantages students interested in small, family, or social businesses
- Values judges’ opinions over customers’
There are, of course, drawbacks to this investor-oriented pitch approach. Requiring students to present a “successful” business model incentivizes students to present an overly optimistic perspective in hopes of impressing the judges (or at least getting a good grade).
Investor-oriented pitches encourage students to pretend they’ve found a successful business model, even when they haven’t learned how.
The real skills we’re teaching in entrepreneurship classes revolved around how to find a successful business model, not how to pretend you’ve found one. Not only does this encourage students to skew the way they present their business, but it also puts students who invalidate their business model assumptions at a big disadvantage – even though that’s arguably the most important skill to learn.
Students who discovered through customer interviews or experiments that their businesses won’t work often have learned more about entrepreneurship than students who ignore what their customers are saying.
Is it a good idea to penalize students who learned how to prove their own assumptions wrong?
The Shark Tank pitch approach also disadvantages students who are interested in businesses that aren’t attractive to investors, such as small businesses, family businesses, social enterprises, and intrapreneurship. These are all very viable career paths for entrepreneurship students, but with this pitch format, students pursuing these types of business ideas often won’t be as engaged.
Finally, the Shark Tank approach’s most important shortcoming is that it elevates the judges’ opinions over those of real customers. When we bring in judges to determine whose business model will be most successful, we’re reinforcing the narrative that success will be determined by opinions from “inside the building”, as opposed to “outside the building” where real customers are.
Neither we nor our judges can predict which companies will succeed (I was shocked the Airbnb worked as well as it did). The only people who know what will succeed are customers, so it’s our job to teach students how to test their business models with customers – not to pick the winners and losers ourselves.
An Alternative: The Process Pitch
To optimize the classic pitch day in a way that focused on skill-build and engages all students, we’ve found success shifting away from Shark Tank pitches, to what we call “process pitches.”
During a process pitch, the goal isn’t to convince anyone you’ve found a successful business model. Instead, the goal is to convince judges that:
You’ve learned a process for finding successful business models.
To do that students walk through the iterations of their business model canvases throughout the course, telling the story of:
- What assumptions they made along the way
- How they tested those assumptions
- What they changed in their business model as a result
- What assumptions they want to test next
Process Pitch Pros and Cons
- Less intuitive to external stakeholders
- Emphasizes skill development
- Values testing business models “outside the building”
- Engages all students in the process
As with the Shark Tank approach, a process pitch approach has its pros and cons. On the cons side, this model won’t be familiar to any external judges, so you’ll want to help them understand the goals of this type of pitch. Suggestions on how to do that in the judging sheet below.
On the pros side, the process pitch focuses students on skill acquisition: business modeling, testing business model assumptions, customer interviews, etc.. Because students are assessed on their process, they are incentivized to test their business model and report out accurate results, instead of skewing data to look more successful than they were.
The greatest benefit to students of this approach is the celebration of a growth mindset and learning from failure. This approach teaches students to see failure as a way to find success – opposed to seeing failure as something that should be avoided like in Shark Tank pitches.
Finally, this approach is inclusive of all students. With a focus on the learning process instead of a business outcome, all students can fully engage regardless of the type of venture they’re looking to build including social enterprises, small and family businesses, non-profits, etc.
Process Pitch Best Practices
It may not be intuitive how to conduct a process pitch, so we’ll share our best practices below.
In process pitches, students should demonstrate:
- They understand the business model validation process.
- They applied that process and evolved their business model based on experimentation.
- The entire process was led by their customers’ emotional needs/problems.
When it comes to judging, the emphasis is on the students’ journey, not their outcome. The goal is not success or failure but what they learned during the process. You want students to tell the story of the race, not just to focus on crossing the finish line.
Consider showing this sample presentation from Owlet – just the first 2:33 minutes shows students what you expect from them. In this great example, these students did a fantastic job talking about the pivots they made in their journey.
Judging the Process Pitch
For a process pitch, students should keep them short in length (3-5 minutes) and give judges a chance to ask follow-up questions related to the individual/team process. It is important to de-emphasize the public speaking aspects of this exercise for students.
In this last week of class, you want students focusing more on internalizing their takeaways from the validation process than you do worrying about their presentation technique.
Judging process pitches can be confusing for people used to watching and judging Shark Tank-style pitches. We built a scoresheet and onboarding process to combat this that you can access below.
It’s crucial your judges are familiar with concepts like:
- Customer emotions/problems should be the central focus of a business model.
- The importance of identifying business model assumptions.
- Why and how teams should test their assumptions.
- How teams leverage the results of experiments is more important than whether the experiment succeeded.
- How much the team can replicate the process in the future is far more important than how many validated boxes they have in their business model (i.e., showing off a theoretical success).
While the judging score sheet includes a primer on business model validation, you’ll want to make sure judges have a solid understanding of these principles. If they don’t you’ll risk teams getting confusing/conflicting feedback that focuses more on products than process.
One way to make sure judges understand what your students will be pitching is to send them the Owlet video above. Just as a heads up, since judges will only ask process-focused questions, these questions should sound more like:
- WHY did you…?
- HOW did you…?
On the other hand, judges should stay away from questions focused on the product/idea/market that would sound more like:
- HOW MUCH/big/long…?
- WHAT is your…?
Make sure this concept is clear for the invited judges by holding Q&A sessions for your judges.
Here are some specific questions judges can ask to stay focused on the process:
- How did your business model changed during the course?
- What role did customer emotions play in influencing your business model?
- What role did experimentation play in changing your business model throughout the course?
- How would you utilize customer emotions and experimentation differently the next time you test a business model (i.e., how you would improve)?
Get the Process Pitching Scoresheet
We’ve created a detailed scoresheet for judging process pitches to walk you and your students through the process step-by-step.
It’s free for any/all entrepreneurship teachers. Please feel free to share it.
All we ask is that you leave us some feedback on it in the comments below so we can improve it!
In an upcoming post, Meg Weber, the guru of the entrepreneurship program at Western Washington University, will share tips for using pitch days to grow your entrepreneurship program!
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