My first article for Inspired Startups published in May 2015 was entitled ‘What Enterprise Ireland are looking for in a CSF Application’. This follow up post will focus on an increasingly important part of your Stage 1 application for Competitive Start Fund – the video pitch which is worth 25% of the available marks. I was recently involved in the CSF applications shortlisting process and watched over 30 video applications over a few days.
Disclaimer: Ideas and advice in this article are those of the author and don't necessarily reflect those of Enterprise Ireland.
Upcoming Competitive Start Fund 2016 Calls:
The following guidance is not meant as a template to be followed without fail – applying for CSF is not painting by numbers. It is about crafting a story about your business and providing proof of market traction such that your application is shortlisted for the next stage of evaluation.
1. Prepare Your Script Question by Question and in Total :
The video is described as a Business Proposition Pitch so each question needs to focus on what makes this business a good candidate for investment – in terms of reference customers, revenue streams, business model, and routes to market and of course the Team. I suggest typing up the script and then reviewing how each question flows in terms of information. Then review it according to the scoring criteria to make sure all issues are covered.
A score of between 21 to 25 will be given if an Excellent description is given of all of the following:
• Product / Service described simply and clearly
• Described exactly what space they are in and what problem they are solving
• Excellent description of value proposition / USP & Competitive Landscape
• Articulated a robust route-to-market / sales & marketing strategy
• Clearly articulated the core revenue / pricing model
Enterprise Ireland has published the Scoring Guidelines for Assessment Stage 1.
I particularly want to mention Pricing at this stage as I have read applications and watched pitches from applicants where the key issue of the cost to the customer is not addressed at any point –it is difficult to evaluate a business proposition without clarity around pricing!
2. Practice your Pitch for delivery:
There are 7 minutes of video in total. You don’t need to use all the time allocated. Personally, for this length of time, I would learn off the pitch and time it immaculately. I would learn it in everyday language. You need to be very comfortable with the pitch. But don’t get too stressed – the viewer won't know if you missed a sentence here and there. So take a breath and slot them in when you get a chance. Everyone agrees that confidence and passion are important if intangible parts of any pitch – if you know your business and talk about it naturally that will be apparent to the scorers. Technically, you could read the script, and if you do, please take your time and try to keep some eye contact with the camera. The other issue is whether to include a second person in the pitch. I would say ‘Yes’ if the person is fully knowledgeable. Just be careful with the handover.
3. Answering the First Question: The Product or Service – What are you going to sell?
You would think that this would be straightforward but describing your product or service in one minute is not easy (thinking here of the Curse of Knowledge as explained by Chip and Dan Heath). The ultimate objective at the end of one minute is not to make yourself look smart or cool, but to explain to someone who has never heard of you before what exactly you are selling. But, the scorers are reasonably smart so there is no need to dumb it down too much. (I think someone started to explain the importance of Social Media to business at the start of one pitch that I viewed).
Start by identifying the problem that is being solved before detailing how the product works for the customer. Real examples can work here to illustrate the point.
If you have a physical product, it is advisable to show it, if possible. A good option is to create a one page pdf with some appropriate images. You can then add a Dropbox link in the Relevant links section of the application form to share the document, and mention it in the video. BTW, I would advise against using the exact same words in the pitch and the video. There will be overlap and repetition but within reason.
It is good manners to introduce yourself at the outset of question one by providing name, company and clarifying role or title. But the reviewer will have read all of the application or at least the first page as the video is loading up – the video will also be saved using the company or applicant details. As such there is no need to spend too much time on introductions. You will be expected to hit the ground running:
• Outline the category or type of solution being offered. Take time to set the context so that there is no confusion as to what exactly is being offered.
• Focus on the benefits to the customer. You will return to this in Q.3 but it is important to mention quantifiable benefits to hit home that customers either B2B or B2C will buy the product.
4. Answering the Second Question: The Customer – Who are you going to sell it to?
The question requires the applicant to identify a customer segment or a small number of related segments. This can be a Business Customer or a Consumer. To stand out, I suggest adding a number or two to this answer. So how many customers are there in the target addressable market – more information can be added in the Market Opportunity section of the application form. I think it is also important to distinguish between end users, decision makers and other stakeholders.
Most importantly, if you have reference customers please mention them and provide context if appropriate – turnover, employees, markets particularly as your customers could be in niche areas and not known to the reviewers.
Please note that you should have mentioned the Customer in answering the first question when presenting the problem. This one minute answer will expand on that to include details of how many customers there are.
Another aspect of identifying the customer are ‘nuggets of information’ from Secondary reports or Market Experts which clarify and validate the existence of customer groups and needs.
5. Answering the Third Question: The USP – Why are they going to buy it from you?
The classic definition of Unique Selling Point is why would a potential customer buy from your business as opposed to the competition. You have one minute to reference the competition which shows that there is a market while clarifying your differentiation. This will generally be some factor that guarantees that your business solves the problem as outlined in question one, better than the competition. New legislation or market developments can increase demand for a solution. Some applicants will have early reference or beta customers and can present a quantified business case.
Focus on identifying a ‘must solve’ as opposed to a ‘nice to solve’ problem such that the rationale for buying this product category is presented clearly, and then clearly identify what makes your solution superior to the competition for a sizeable cohort of customers.
The level of innovation displayed by CSF businesses is fantastic. This can include new technologies, or applying existing technology or processes in new markets.
6. Answering the fourth question: Route to Market – How are you going to sell it to them?
This is a critical question to establish the potential scalability of the solution. Being able to present traction with reference customers and indeed with international customers will have put your business near the top of the shortlist. The next step is to add an appropriate route to market strategy along with a customer acquisition strategy that makes sense for your business. So your route to market strategy will depend on your business. In some cases, a direct sales approach can work if average sale is significant and you have access to decision makers in the target market. Another option is working with partners such as wholesalers or value added resellers who have a track record in the international markets. Some businesses will present multi-channel plans. Personally, I feel that demonstrating scalability solely using a proprietary online/ eCommerce model can be a difficult case to make – so if your plan is to focus exclusively on your own website as some SaaS businesses might, you should present a robust inbound marketing strategy as part of your application.
For the CSF video, if you have route to market traction, this is the place to emphasise that message – success to date is indicative of future success in this vital area.
Route to market is an area that a ‘mentor’ can help your business with. Most markets are highly competitive so leveraging partners who have access to customers generally makes sense. The proviso of course is that the business has margin to include partners. Which brings us to the money.
7. Answering the fifth question: The Business Model – How are you going to make money?
I provide training on the Business Model Canvas – the 9 building blocks that describe how your business adds value for customers. It is not easy to summarise your business model in one minute. As most of the building blocks have been addressed in the other questions, I suggest that this answer should focus on Pricing Model, Revenue Streams and Costs. The answer could present figures relating to: Pricing, Average value of a Sale, Fixed Costs, Unit Cost and may detail sales cycles length. All of these show domain knowledge and business management capability so if your business has particular sectoral capability or resources such as Intellectual Property, then that point can be made here. Ultimately, CSF is looking for businesses which have the potential to be profitable.
If your application and video has established the credibility of the business concept and team, a concise but confident declaration of growth plans and targets in terms of turnover, employment and international markets can conclude this one minute on a high note.
8. Answering the sixth question: Any other information:
The 5 questions are very comprehensive in extracting the business proposition. In the final two minutes, you are given an opportunity to stand out from the competition (the other applicants). The areas that could be addressed are points that back up message that the potential of the opportunity can be delivered, because for instance:
- The strong relevant background of the Team and advisors.
- Availability of Intellectual Property.
- Milestones to date.
- Partnerships secured.
- Market Developments.
One video pitch decided to use the final two minutes to positively address points of feedback given following a previously unsuccessful CSF application. It added to the sense that the business was well managed as the points were constructively and comprehensively addressed. This may not be for everyone but I thought it was effective in that instance.
The key question is whether you have, while answering the prompt questions, communicated the potential and value of the business that you are leading – does the video pitch and application represent the full potential of the business. I trust that this article helps you to do just that.
References & Further Reading:
As explained in this post on the New Frontiers blog entitled, Making a successful Competitive Start Fund application, CSF is an Enterprise Ireland support aimed at accelerating the growth of High Potential Startups (HPSUs). It offers €50,000 (matched with €5,000 from the company or other private investor) for a 10% ordinary equity stake in the company.
• According to Enterprise Ireland’s CSF Reference document, during the first stage of Assessment, eligible applications will be reviewed and scored against set criteria by a number of external consultants in conjunction with Enterprise Ireland advisors.
1. Company and Promoter Profile – 25%
2. Product/Service & Market Opportunity - 25%
3. Business Proposition – delivered by Video Pitch – 25%
4. Product/Service Innovation – 15%
5. Ability to deliver key Commercial and Technical milestones over the coming 12 months – 10%
• The CSF calls attract a very high number of applications. As of April 2014, Enterprise Ireland had received 1,950 applicants and had funded 227 companies – presume that number of CSF investments has reached 300 at this stage.
• Enterprise Ireland have scheduled 11 CSF calls in 2016: https://www.enterprise-ireland.com/en/funding-supports/company/hpsu-funding/competitive-start-fund-csf-.html
• Enterprise Ireland has prepared a one page pdf with instructions on how to complete the video pitch which allows applicants to outline the business proposition:
1. The Product or Service – What are you going to sell? (1 minute)
2. The Customer – Who are you going to sell it to? (1 minute)
3. The USP – Why are they going to buy it from you (1 minute)
4. Route to Market – How are you going to sell it to them? (1 minute)
5. The Business Model – How are you going to make money? (1 minute)
6. Any other information you’d like to add (2 minutes)
Applicants can do as many test runs as they like, but the final pitch is non-repeatable.
A self employed Business Advisor and Mentor, Donncha Hughes specialises in working with early stage technology and knowledge oriented businesses to deliver growth. Notable achievements include the award to a client company of the Regional Winner prize valued at €20,000 in the 2014 InterTrade Seedcorn Competition whereby the company subsequently secured private investment matched by Enterprise Ireland as a HPSU.
Based in Galway, and working with clients across Ireland, Donncha curates Startup Digest Galway on a voluntary basis, and most recently has been involved in the launch of 'Startup Galway Pitches Meetup' which provides a forum for startups to practice a pitch that they need to make for their business.