To demo or not to demo, that is the question

If you're demoing your product in a VC pitch, don't use the same demo you use for customers. Especially if you've demo'd to a lot of customers, you will have developed habits that are bad for VC-facing demos. Let's see why.

First, in a VC pitch, should you be demoing at all? You should probably not demo if a) all you have is a Figma-ish clickable prototype, or c) you already have significant customer traction. The demo zone is b) in between these two.

For a), if you haven't yet built the product, there's usually no point showing a demo of what you plan to build. Wait until you've built it and come back.

For c), if you already have significant traction - at least dozens of businesses or thousands of consumers - then customer case studies and retention / engagement metrics are more interesting.

That said, at seed stage, where I invest, many companies are in the demo zone. So, let's talk about some demo best practices.

VCs are looking for a few things in a demo:

??How real is the product / how close to shippable?

??What the heck is the product / what does it do? This should already be clear from the presentation, but way too often it's not. (In those situations, after the demo you may want to back up and repeat a few slides. What you said probably didn't register the first time, because we had no idea what you were on about.)

??Do we think customers will buy? This is a combination of what we see in the product, how articulate you are in presenting it, and what we think we know about the market and customers.

The first two of these should come through in most any demo. The third one is an opportunity to highlight the benefits the customer will realize. You can jump into the middle of the customer journey - after a brief orientation on what the customer did to get to this point - and then show the big "aha" where the value realization happens.

How is this different from a customer demo? Well, in customer calls you're often demoing to the person who is going to use the product, not to the person who owns the budget. The user cares about a lot of small feature-y things that make their life a little easier, but that don't move the needle on value realized. After doing enough customer demos, you'll have clocked which cool features folks respond to, and you'll have been Pavlov'd into including more of them.

The same demo in a VC pitch will fall flat. The coolest features often are not that hard to copy, so they don't do much for your fundability. And VCs care a lot about value realized.

So, if your VC pitch includes a demo at all, uplevel it. Use it to talk about? benefits, value realization, and sustainable competitive advantage. Most importantly, untrain what you learned from customer demos, and retrain from VC meetings only. You’ll be glad you did.