Many hightech investor pitches contain parallels to big success stories (Facebook, Google, Twitter, etc.). Many of these analogies are forced. They do not make the right comparison, and worse, might actually confuse the audience.

There are two ways to use an analogy correctly:
  1. Use it in a very short sentence to frame your idea very quickly to investors: “We are a facebook for old people”. After this statement the audience knows roughly what you are going to talk about, and you have set the stage to add details and nuance.
  2. Use an exact and precise analogy. Broadly speaking, AirBNB is disrupting the hotel industry, but you cannot use this analogy if you want to disrupt the space travel industry. When you are planning to create trust among total strangers to engage in a privacy-invading transaction in some industry, you can pull the AirBNB card.
Update: Fred Wilson posted his thoughts on “This for that” investor pitches.

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