When you hire a marketing advisor, don't necessarily expect to end up talking about your purpose in life. However, that's what Spanish marketing expert and entrepreneur Alex Barrera often does with startup founders who hire him to improve their pitch. They believe they can get help to convince investors and they do, but the by-product of the process is that they are redefining the vision of their startup.
In this context, ethical and philosophical considerations are not far away, because this often includes a deep look at the effects of your company on society. "The days when you could do what you wanted and immerse yourself in legal or moral gray areas are dwindling," says Barrera. “Growth companies need to be careful about the potential consequences of such strategies. While there are still many investors who are pushing for “growth at any price”, social pressures are changing and it is suddenly becoming more expensive to take such positions. ”
You may have spotted Barrera's cowboy hat at one of the many startup conferences he is involved in as a mentor, judge, moderator and speaker – and he wears many hats.
Previously, he co-founded two startup accelerators and the Europe-focused tech publication Tech.eu, and is now the author of The Aleph Report, a periodical publication on cutting-edge technology and its implications. But through his company Press42 he works with startups and corporations on organizational storytelling and strategic communication, and that's also what we discussed in the following interview (which was edited for length and clarity).
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What do people often misunderstand about pitch training?
Well, it depends on your level of experience. When entrepreneurs hear about pitching for the first time, they immediately think of the infamous "elevator pitch", roll their eyes and moan. For those with a little more experience, pitching is about a series of slides to achieve a specific goal, mostly funding. However, seasoned managers are discovering that telling the story of their product or service is not a one-way street. Having to sell a future vision of where the company is going inevitably affects your perception of the product now and what you need to build to achieve it. The vision affects the product because you need consistency between product and storytelling.
What kind of company do you help?
I've been helping startups pitching for years. It used to be mostly early stage startups and in groups, with accelerator and startup competitions calling on me to help out their entire batch or portfolio. I still offer this type of training, but these days I work more often individually with a single client who is at a later stage. And sometimes I also work with technology companies preparing for M & As, as well as with large corporations.
And what's your sweet spot for startups you work with?
For individual work I prefer David to Goliath and less sexy rooms. I love these companies that were built without the noise: there is a lack of hubris, they are really humble, but the numbers are there – the founders might be disgusting, but the opposite is true. I do not work with companies that sell smoke and mirrors or that harm society because they shamelessly disregard any responsibility for their effects on others.
Fortunately, this is rarely the case with people who call me. Usually they are a little out of the loop and often have cheat syndrome. Therefore, my job is also about helping them understand what they can be proud of in their work and how they can then show this in their pitch. They appreciate talking to someone who understands them and their challenges. I spend a lot of time researching all industries and thinking about the future, so the conversation will usually go like this: "Dude, you get it!"
What do you particularly like about personal pitch advice?
I find it very fulfilling to see how much value it brings to those involved. I'm also a developer and do project management, but most of the advice I do isn't the type of growth marketing that takes more time to show results. When you are doing growth hacking at the product level, it takes time to see the effects, and even then it is not always easy to connect the dots.
When we work on their pitch together, CEOs can see immediately whether the new pitch is successful or not; and they also know if the exercise itself worked for them. Working on a pitch takes a lot of thought and creates a lot of tension between you and the CEO.
This is especially true at the beginning when you keep asking yourself why they did this or that, what the product offers whom or why it has not grown here and there. All these questions force many founders and managers to pause and think intensively about the product, the market or the roadmap. Sometimes they feel compelled to provide data to support certain claims. The process forces them to rethink old prejudices, beliefs, or even myths surrounding their company. Many people are surprised how much clarity they gain in their company when they work on a pitch.
Do you only work with founders and managers?
Sometimes the clarity and strategic insights that working on a Pitch Founders or CXO can provide will trigger them to want to convey that understanding to other areas of the company, such as sales, customer support or even the product team . In my case, being a developer myself enables me to rearrange and adapt my process to every level of the organization, including the development team.
That is rare, but it eventually makes me a kind of translator of the challenges of different parts of an organization who ultimately acts as a link between different perceptions. In the end, that's exactly what storytelling offers. It's not just a pitching tool, it's a brutally effective way to communicate between people, especially on challenging topics.
How would you describe the value executives get from working together?
One of the common and even surprising values for most executives is the insight that the process offers. When someone runs either a large company or a scale-up, their day in and day out revolves around growth. They rarely have time to sit down and think about where they are going in terms of future products. They do have a roadmap and their KPIs, but I rarely see a strong vision of the future that is broken down into steps.
The pitching process offers you two valuable things: time and awareness. Time, because while they pay me, they stay with me and have to schedule time for our sessions. That bubble, and the need to build a coherent story that explains why the company is at this particular point, creates tremendous insights for most. And then there is perception. It's funny because they're the ones who provide all of the pieces of the picture, I'm just helping them put them together and then point out the obvious.
This process is very rewarding for them on a personal level. It helps them build the confidence that while it was always there, it rarely shone across the field before. It also makes them think about where they want to go next, not just from a product perspective, but from a mission perspective. It reconnects them with the side that is dear to most of us and the personal questions we ask ourselves about life and purpose.
How do you bridge the gap between what your customers already know and what's next?
My customers already know how to grow a company. I always keep that in the back of my mind, not only with startups, but also with large corporations – too often I see consultants talking to them and saying at the beginning: “You're doing this wrong!” Well, they are where they are , Is not it? It doesn't mean they don't need help, but you can show them that you don't have to dismiss what you've achieved. I see myself as the person who will help them take them to the next level and build on what they have already done. Sometimes it takes a few bruises to get there, but the respect for their achievements is always great.
These people are very good professionals. It's not that they can't or can't see the vision. The need to connect the dots in detail enables a strategic vision of the organization to emerge. This is where the actual "coaching" starts. When such a picture emerges, many founders or executives shy away from it. They find it difficult to believe that they could stand on anything groundbreaking or real profit in their respective markets.
This is especially true for many scale-up companies. They fought first for marketability and later for market share that they freeze at the possibility that they could do a fantastic job. Part of my role right now is to break through their impostor syndrome and encourage them to be more courageous, to believe in themselves, to trust the data.
How do you advertise your services?
Well, it would be very difficult for me to make cold calls. I can't say, "It's not just about pitching, you will see the future of your business!" – so I stopped marketing that. My best marketing tool is word of mouth from my clients or even from people who see me perform on stage. But even then, people will call for help with a certain milestone, such as increasing a lap. Only through the process do they see that there is so much more. They begin to understand other parts about themselves that either improve their ability to raise more money or even take them to the next level, like making an acquisition or developing a big breakthrough.
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What are you actually working on with founders?
Moving further up the chain, the pitch becomes a very powerful tool not only for fundraising but also for strategic thinking about your company. Here founders get clarity about their strategy and what really counts – questions for which they have no time in everyday life. They take the time to do it because they think it helps fundraising, and then they find out that it helps them understand their business.
They usually call me because they raise a series B round or a very large A round. They realize that they need to refine what they say in order to unlock the next milestone. The game is different; it's no longer about market fitness or just about gaining market share, and what worked for them just doesn't work anymore – especially if they were semi-bootstrapped by that point. You need to speak to someone who understands you and can help you prepare for the future, for example by researching specific pitfalls or trends. I'm not just the type to pitch, I'm the type to provide you with ammunition to help you make a compelling case for your audience, whatever it is. The pitch is just an excuse!
What do you think of comparing your startup with another when it comes to pitching? for example call yourself "Uber for X"?
Analogies are very powerful. The biggest challenge in pitching a company, even one at a late stage, is that people tend to pigeonhole you. So you have two options: either you let it do it, or you provide the tools to put it in a box. Analogies work very well here.
But then who do you compare yourself to? It's challenging because two elements are becoming increasingly important: capturing the right trends of the moment and the ethics of how you do what you do. You want to control which box they put you in, ideally one that is trendy but at the same time does not place you in seemingly direct competition with someone you do not want to be associated with.
Why do startups have to be careful when communicating?
In recent years we have seen that startups are no longer viewed as innocent by society; they no longer have carte blanche and society is becoming much more sensitive. There is a polarization problem with many topics and we will increasingly see a conflict between society and startups. It will increase even after COVID, with tension between automation and workplaces. And the thing is: scale-ups and startups in the growth phase have a choice of how to market; therefore they must be aware of ethical concerns that may arise sooner or later.
Society will ask you for responsibility. What happens at big brands is trickling down, and scale-ups hit that threshold sooner. Typically, they get caught off guard because they reach this stage by just knowing local feelings about what they are doing and suddenly face a national or regional setback. Or they expand internationally with local operations led by really young people who have no experience in dealing with politics and who are suddenly faced with severe local setbacks.
All of this has a lot to do with pitching, because it is no longer about the product. For example, it is about convincing authorities at different levels to take action if their incentives are very different from those of the investors. It's B2G2C – Business to Government to Consumer. And we see more and more start-ups with regulation as a factor in their operations.
And how can you speak to authorities, customers and investors in a uniform pitch?
The main division must bring all elements together. It needs to be clear about what you are doing and hit the right notes on ethical concerns. It's important for both regulators and fundraising; because from the investor's point of view it also reduces the uncertainty in your business. As a scale-up, your ability to scale is a concern, so it helps to show that you are thinking and planning in terms of societal impact.
I have to say that more and more investors are really caring about it. It could be because they got burned, for example because they saw regulatory setbacks firsthand, or simply because they became aware of them. There are still some investors who have the “Uber mentality” and just care about muscle – grow first and only then deal with regulators – but more and more VCs are realizing that this may not work because society is changing changed. The pandemic only emphasizes this even more.
What about start-ups? Are they also more interested in their social impact?
I think it's a pendulum, and the current generation is a child of the previous regulatory setback. Crypto may be on the other side, but startups are increasingly aware that they are grappling with societal repercussions. I also try to convey this message when I prepare my clients for the pitch – and warn that it can sometimes happen very quickly: We have seen how a ban can spread like wildfire in one place. So you have to regulate your initial message and also be ready to adapt quickly.