Solution vs. How It Works: Two Case Studies Analysis

Many founders confuse their solution with how it works. In doing so, they confuse the listener. And when an investor doesn’t get what you are, your chances decline — no matter how strong the technology behind you is.

I’ve written about this distinction in more depth here, but the short version: your solution is what your company is — the type of business you are and what you do within it, in one sentence. It’s not the problem you solve or the mechanism behind it; those come after. How it works is that mechanism. Investors need the first before they can process the second.

To see this pattern in the wild, I went back and watched two finalist pitches from TechCrunch’s 2023 Startup Battlefield — Magnestar and Electrified Thermal Solutions — and thought through how each one could be tightened. Both are strong companies with strong technology. Neither pitch was bad. But both show the exact same sequencing gap, and both are useful precisely because the fix is small: not a new company, not new technology, just a different order.

Case One: The Spectrum Coordination Company

Let’s review an excerpt from the pitch that is relevant to our analysis

Sometimes founders blend the solution and how it works, making it difficult for the audience to understand what the company actually does. Let’s look at an example from Magistar:

“Welcome to, oh we are outselling there next door, etc. I wanna show the three different ways to produce the same soup. This is how it works. Can you explain this as an example? space. Everything that we do in terms of financial verification, GPS navigation, financial services, as well as telecommunication and Earth observation, relies on space technology. Radio frequency waves moving between Earth and space consistently for service. As we move from 8,000 satellites to over 100,000 satellites in space, the overall noise level between Earth and space is set to dramatically increase, causing interference and outages of the services we depend on. The current process set in place for obtaining spectrum, coordinating amongst other operators, and protecting your spectrum rights is an intensely manual, costly, and timely process that all operators and regulators are struggling through.

Magistar is taking on this challenge, especially as, if we are unable to have dependable space technology, it puts the entire sector in jeopardy. Space technology, and that’s what we’re bringing forward. We are here to ease the complexity of space spectrum. We simulate at scale when multiple satellites will be directly in a collinear vector and interfering with one another. We predict this both in the short term, as well as in the long term. Over a two-year period of time, what is the likelihood of multiple satellites or constellations interfering with one another, and does it go beyond the thresholds of the regulators that are put in place?”

Analysis

In this case, there’s a lot of information about the problem and the complexity of space spectrum, but the actual solution—what Magistar is as a company—gets lost in the technical explanation. The audience is left wondering: Is Magistar a simulation software company? A consulting firm? A service provider?

To clarify, a better solution statement might be:

• “Magistar is a software company automating satellite spectrum coordination through real-time simulations, helping operators streamline communication and protect their spectrum rights.”

In this revised statement, the solution directly answers what the product is, emphasizes the value proposition (automation of spectrum coordination), and highlights the benefits (streamlined communication and protection of spectrum rights). This helps the audience quickly grasp both what Magistar offers and why it matters.

Case Two: The Industrial Heat Battery

The second pitch had the opposite pacing problem, but the same root cause. It opened strong: heavy industry — cement, steel, glass — has no affordable way to decarbonize, because zero-carbon energy is cheap but unreliable, and making it reliable usually makes it unaffordable. Let’s review the relevant part from the pitch.

“Thank you. So, we have a massive problem today. There is no affordable way to decarbonize our heavy industries. Talking cement, steel, glass—what makes the chairs you’re sitting in, the walls of this building, it all requires a tremendous amount of energy. And that energy needs to be three things: cheap, reliable, and hot. Flame temperatures in many cases, as you see on the screen here. So, our zero-carbon energy sources are just one out of the three. They’re cheap. And that’s already remarkable, but it doesn’t run a 24-7 cement plant or a steel plant. As soon as you try to make it into reliable heat, you lose the cheap part. Say, if you want to make hydrogen with it, you 6X the cost, which won’t work. So, we need a new approach.

That is why we founded Electrified Thermal Solutions, and it is why we’ve been developing the Joule Hive Thermal Battery. With this system, we take in electricity from solar, wind, nuclear, hydro—when it’s cheap or abundant or available—we turn it into heat in our box, and we make hot gas with it that can run your furnace, your boiler, your kiln, even turn a turbine in place of where you normally burn fossil fuels. So, with this one system, the Joule Hive can turn that intermittent zero-carbon power into industrial, reliable heat. When I say industrial heat, I mean 1,800 Celsius. Extremely hot. Hot enough to do any job we need, and just as good as hydrogen, but 3X or more cost-effective. So, still affordable, and most importantly, we can retrofit existing systems. We plug into your furnace, your boiler, and so you don’t have to radically redesign what you’re doing to decarbonize what you’re doing.

And the Joule Hive is unmatched in what it can do because of a new patented technology that we’ve been working on, and that is the building block of industrial decarbonization, the electrically conductive fire brick, or e-brick, if you like. With semiconductor doping, we’ve taken ordinary fire bricks that can withstand flame temperatures, and we made them into electrically conductive heating materials. This means we can go hotter and last longer than any electric heating material on the market today, and it means we can build with this building block to massive scales, as you see on the screen here. The green are the conductive bricks. We stack them up, and we can build systems that hold lots of heat for industry, and it operates as three things: a giant electric heater, a giant thermal store to hold it for later, and a giant heat exchanger. We flow gas straight through and make hot gas, which is what the world runs on.”

What Is Good and Wrong with the Introduction of the Solution/How It Works

The Solution

• What’s Good: The speaker opens by clearly identifying the problem: heavy industries lack an affordable way to decarbonize. This is a strong start because it frames the challenge and the stakes, which are globally relevant issues. Later, the speaker mentions the Joule Hive Thermal Battery, which hints at the solution but only after some buildup.
• What’s Wrong: The solution is buried beneath too much problem description and technical information. It’s introduced with the phrase, “That is why we founded Electrified Thermal Solutions,” but this introduction would benefit from an earlier, clearer statement. The audience has to wait to understand what Electrified Thermal Solutions actually does, which could cause confusion.

How It Works

• What’s Good: The explanation of how it works is well-structured and detailed. The speaker explains how the system converts zero-carbon electricity into heat, stores it, and uses it to replace fossil fuels in heavy industries. The speaker also provides specifics, such as the Joule Hive producing heat at 1,800 Celsius and retrofitting into existing systems, making it cost-effective and easier to adopt.
• What’s Wrong: While the technical explanation is solid, the how it works section is introduced before the solution is fully clear. This makes the audience work harder to connect the dots between the product’s purpose and its functionality.

Alternative way to say it is:

“We have a massive problem today: decarbonizing heavy industries like cement, steel, and glass is expensive and inefficient. That’s why we founded Electrified Thermal Solutions (ETS), a company that specializes in developing zero-carbon energy systems for heavy industries.

Our flagship product is the Joule Hive Thermal Battery, which converts electricity from renewable sources—like solar, wind, and nuclear—into reliable industrial heat that’s affordable, sustainable, and capable of reaching 1,800 Celsius. This battery allows industries to decarbonize while maintaining cost-efficiency.

Now, let me explain how it works. The Joule Hive system uses electrically conductive fire bricks, or e-bricks, to store heat and generate hot gas for industrial furnaces, boilers, and kilns. We can retrofit this system into existing infrastructure, so businesses don’t need to overhaul their processes. The system functions as an electric heater, a thermal storage unit, and a heat exchanger, providing scalable, cost-effective solutions for industries that rely on high-temperature energy.”

Three Things to Check in Your Own Pitch

1. Read your opening thirty seconds out loud, alone. If you can’t identify the sentence where you stated what your company is — plainly, without jargon — you likely don’t have one yet, or it’s buried past the point where it can do its job.

2. Ask whether your problem section is doing too much work. Both pitches above had strong problem statements that ran long enough to delay the solution. A great problem statement doesn’t need three minutes. It needs enough to earn the solution sentence that follows it.

3. Notice if your “how it works” is trying to also be your solution. This is the most common version of the mistake. If your mechanism explanation is the first place an investor could reasonably guess what category you’re in, your solution hasn’t been stated yet — it’s been implied, and implication is a lot to ask of someone hearing your company for the first time.

The Real Takeaway

Neither of these founders needed a better company. They needed to say what they’d already built, in one sentence, before explaining how they built it. That’s a narrative fix, not a technical one — and it’s usually the fastest, highest-leverage change available before a pitch.

If you’re heading into a raise and want to check whether your own solution is landing before your mechanics take over the room, send me an email.