The Art of Pitching

Março de 2010

Avoiding the Great PowerPoint Slide Hunt

• This PowerPoint tip takes just 120 seconds to learn and can make you look like a real pro.

• This may seem like "PowerPoint 101," but fewer than 10% of the CXO presenters I have coached knew this trick before I shared it with them.

• Try it; it's very cool! • One of the things that drives me crazy when I am an attendee at a

presentation is when someone in the audience asks a question and the presenter says, "I have a slide here somewhere that addresses that," and then proceeds to flip forward and backward through the slides, flashing them all on the screen and looking like a rank amateur while appearing flustered on the Great PowerPoint Slide Hunt.

• When they finally do find the elusive slide, they talk to it, and then they have to click madly back to where they were, flashing on screen all intermediate slides as they go. Any pretext of "presenter cool" has just vanished, usually taking some -- or all -- of the presenter's self-confidence with it.

Avoiding the Great PowerPoint Slide Hunt

• Before your presentation, make a simple, small discreet list maybe on a 3 X 5 card, of all of your slide titles with their respective slide numbers; like this example:

• 1- Welcome2- Company overview3- Players, problem & pain4- Pain killer5- Our magic technologies6- Competition7- Business model8- Go to market plans9- Revenue summary10- Team11- Timeline & status12- Why Us Summary

• Backups (to be used only as needed*)13- Expanded market data14- Technical details, expanded view 15- Financial details16- Revenue details17- Etc.18- Etc.

Avoiding the Great PowerPoint Slide Hunt

• Now you are all set to look like a professional, perhaps even a genius with ESP.• Example 1: You are just finishing talking about slide 9 (revenue summary) and someone asks for

more revenue details. Without missing a beat you glance at your list, and press 16 and Enter - - you are instantly seeing that slide (revenue details). When you're done, you simply do a 10 and Enterand you're back to your original flow.

• To the audience it looked like the revenue details slide was always immediately after the revenue summary. Only you know that this is what really happened: . . . 7, 8, 9, 16, 10, 11, etc.

• Example 2: You are on the summary slide 12 and a question comes up about your patent-pending technologies. With a simple 5 and Enter you can return to the slide where that was discussed, or jump ahead to a more detailed explaination with a 14 and Enter. After that discussion, a 12 andEnter will return you directly to the summary slide.

• You can totally avoid the Great PowerPoint Slide Hunt and jump to any slide at any time, if you just know what slide number you want. Referring to your discreet slide list, simply press the desired slide number and Enter. You can hop-scotch all around your presentation at will.

• * CAUTION: backup slides seem to have a magical, hyponotic power over the presenter, as though part of the presenter's brain says "I went to all the work to make these, so darn it, I am going to show them whether they are needed or not!" Only use the backup slides if they are really needed. Now you know how to make them appear seamlessly in the right place at the right time.

Bill Joos on Pitching• Bill Joos (or William Wallace Joos, as he prefers to be called in Scotland) spoke at a Edinburgh Entrepreneurship Club/Edinburgh-Stanford Link event

on 11 March 2008. Bill experienced plenty of pitches while with Garage Technology Ventures, and shared the top ten mistakes for early stage/startup company business plans and pitches. While his focus was on pitching to venture capitalists, much of what he said is applicable to any business planning process. This article summarises his talk.

• Understanding the Odds• During 6 and a half years at Garage Technology Ventures:• 97,500 entrepreneurs submitted information via a proforma. • 17,000 of these were invited to submit executive summaries. • 1,200 of these got a face-to-face interview. • 100 of these got funded. • (And Bill Joos didn’t say it, but likely only 10-20 of those that got funded will develop into successful businesses.)• In such a fiercely competitive environment, with such long odds, perfecting a business plan and pitch is clearly important. So learn from the 10 top

mistakes:• 1. “Too darn Long”• Venture capitalists have Attention Deficit Disorder. Everything needs to be as short and to the point as possible. Short text is harder to write than long

text.• Some benchmarks:• The “elevator” pitch: 1 minute, at a leisurely pace. • Executive summary: 1 page. The aim is to get a meeting. • Initial meeting slides: “The dirty dozen” (certainly less than 20 slides). Aim to keep 40 minutes of a 60 minute meeting for discussion, not

presentation. Save detail for later meetings. • 2. “Poor Positioning”• A “solution looking for a problem” is not a strong case. While there are exceptions, most funding is for “painkillers” – and for those to sell, someone

needs to be in pain. Don’t forget to consider who the customer actually is.• Benefits need to be put into context – given a frame of reference. It is unlikely that those listening to pitches will be experts in the field. Bill cited

Molly the elephant: Is a “7,000 pound” elephant over or under weight? Is that good or bad?

Bill Joos on Pitching• 3. “Lack of Tight Focus”• Avoid “Swiss army knife plans”: Business plans that attempt to enter every possible market immediately: It is hard

to succeed in just one market. Justify a focus on the market segment initially, with an “encore strategy” for developing into other markets over time.

• 4. “Not Enough Real World Market Analysis”• There are 2 approaches when researching markets:• Top down: Citing overall market research, and then claiming an arbitrary percentage of that market as a target. • Bottom up: Detailed research within a small part of the market. • Bottom up approaches show greater understanding and depth, however top down can still be used to validate

bottom up.• Don’t just quote the total available market – understand what is reachable. Oh, and do not state the bleedin’

obvious: “Mobile phones are a growth market in developing countries…”• 5. “What are the 3 Drivers of your Business?”• What are the key performance metrics that will determine whether the business operates effectively? A simple

question, that many cannot answer.• 6. “Unclear Business Model”• How will you make money? Or a profit? Particular care is needed where adoption is likely to be slow or dependant

on other companies. For example, large corporation (Fortune 500 businesses) have very long sell cycles – don’t expect to sell to them in the first year. Similarly if customers need to be found from among a handful of businesses, exploratory negotiation with those companies is worth doing beforehand.

• How well will sales scale? The first few sales are often the easiest, because they will be made to customers that are already well know to the entrepreneur and their team. Subsequent sales might be much harder.

• Finally, don’t quote revenue expectations without explaining the assumptions made.

Bill Joos on Pitching• 7. “Poor or Incomplete Competitive Analysis”• The startup needs to be distinguishable from the competition. But it must also acknowledge that

competition exists and position itself in the market accordingly. Not disclosing the competition either marks one out as naive or a liar, neither of which is positive.

• It is common not to understand the power of the “status quo” in a market. This is a particular problem when entering an existing market, because sales need to displace an existing product or service. Displacement sales are the hardest to do.

• 8. “Weak Team Information”• Admit to weaknesses in the team (such gaps are often a reason for seeking support from a venture

capitalist). Know the function of the first 3 hires. Generally venture capitalists will “bet on the jockey – because they pick the best horses” (although I suspect that varies).

• 9. “Poorly Defined or Weak Go To Market Plans”• Who is going to sell this stuff anyway? Who will have budgetary authority? And who besides the

entrepreneur has a vested interest in success – for example, a partner company?• 10. “Goofy Fundamentals that Distract”• Startups are initially an exercise in survival. Sometimes an apparently rational decision can backfire:

For example, giving an employee a stake in the business accidentally formalises the value of the company, and makes it harder for investors to realise the true value of the business. So get some “adult supervision”: Establishing a board of advisers shows willingness to take advice, and depending on the people involved, reduces the risk of the venture.

Perfecting Your Pitch, Part One: Assume Short Buildings

• Bill Joos preaches the art of the pitch for Garage.com a venture-capital investment bank that's helped more than 60 startups raise a total of $200 million since 1999. Joos, who learned to sell in IBM's legendary training program, has adapted that experience to the new, faster world of Internet startups. The soul of his sermon? Brevity brings the best results. Following is Joos's eight-point program for bringing your elevator pitch to new heights.

• 1. Assume short buildings.Joos is fond of quoting Mark Twain's bon mot, "I didn't have time to write you a short letter, so I wrote you a long one." Some elevator rides may last more than 60 seconds, but don't allow your pitch to last more than a minute. Brevity requires effort -- you must think hard about the essentials of your message and ruthlessly cut away the unnecessary details.

• 2. Put a tag on it.Joos recommends starting with a tag line -- a wordplay to pique interest in your pitch. For example, GE "brings good things to light," Archer Daniels Midland is "the supermarket to the world," and the New York Times publishes "all the news that's fit to print." A tag line must encapsulate your business's core purpose or product, but, more important, it must grab your audience's attention -- you'll fill in the rest a few sentences later. Joos's personal tag line? "At Garage.com, we start up startups."

• 3. Solve a problem.Avoid sounding like a solution in search of a problem. Right after your tag line, launch into an explanation of the need you plan to meet. If you aren't solving a problem or filling a need, you're in for a tough sell.

• 4. Turn adversity into opportunity.Every problem offers the opportunity for a solution. Once you've presented your prognosis, lay out your prescription. Boil down the unique elements of your approach into one or two sentences.

Perfecting Your Pitch, Part One: Assume Short Buildings

• 5. Lay out the benefits.Remember this subtle distinction: You're not pitching a great idea, team, or product ... at least not in the elevator. You are pitching what your idea, your team, and your product will do for investors and for customers. This is the time to lay out your mission statement. How will your business benefit the world?

• 6. Conclude with a call to action.Always end your pitch with a call to action. Different audiences prompt different requests. Ask friends and acquaintances if they know anyone who would be interested, who's working on something similar, or who's working in the investment world. Ask angels and VCs if they'd consider investing, if they'd take your call, or if they'd be willing to set up a meeting. If you're really in an elevator, offer to walk straight back to the office to talk more.

• 7. Make it tangible.Throughout your pitch, talk in tangibles, not abstractions. Frame the problem, your unique solution, and the benefits your company will bring to the man on the street. Keeping it tangible means killing MBA- and tech-speak. Joos fondly recalls one mission statement he helped transform for a Garage.com client that makes a little box that encodes digital signals -- plug your phone into it, call someone else using another little box, and you're on a secure line. The client's mission statement? "Utilizing the 20-48 Diffie-Helmankey exchange of 160-bit Triple DES ..." You get the idea. The new mission statement: "We safeguard your communications."

• Keep your pitch short, and keep it at a level people understand viscerally.• 8. Show your passion.

"A good pitch changes the pulse rate," says Joos. "When we look at a business plan, we look at the normal kinds of things -- the numbers, the competition, the market -- but we also look for fire in the belly, a passion to succeed at something that's never been done before. That passion has to come across. You have to act like a new parent showing off pictures of your newborn. If you can't get me excited about your plan, we're done. You have to change my pulse rate."

Perfecting Your Pitch, Part Three: The Overview Overview

• Every sale travels along a continuum from baiting the hook to feeding the fish. Whether you're selling an idea or a widget, you first must catch consumers' interest -- entice them to bite. To transform those consumers into regular customers, you must provide nourishment -- feed those fish with information, customer service, and a great product.

• In his three-part battle plan to get venture-capital funding, Garage.com pitch master Bill Joos focuses first on baiting the hook -- a great elevator pitch -- and then on feeding potential prospects a nourishing snack -- a succinct killer business summary. The real meal, though, only comes once the big fish have decided to fund you. Before you get to "yes," you have to meet with the VCs and give what Joos calls the "overview presentation." This little show gives potential investors enough information to make the enlightened decision to fund your company without overloading them. If they're interested, they'll ask for more.

• "Pitching is an art," says Joos, "But there is science to it too. And science tells us that one week after your pitch, the VCs will remember only 10% of what you told them." Joos calls this pitch decay, and it's a grim obstacle to any sale. As Joos puts it, "You can highlight the 10% that matters most, or you can let them figure it out for themselves. You choose."

• Pitch decay underscores one of Joos's favorite themes: brevity. He insists that overview presentations comprise about 12 slides -- the dirty dozen. "You may think it's impossible to condense your message into a dozen slides," he says. "It's not onlypossible, it's imperative. We have clients who are changing the molecular structure of insulin, who are reinventing the worldof encryption. No matter how complex the technology, we've never exceeded 14 slides. You must boil it down."

• And while you try to hide your nerves, remember to have fun. "This is a bizarre thing," Joos says. "You won't always enjoy the game -- nobody does -- but you have to look like you're functioning and enjoying the challenge. You'll have the highest highs and the lowest lows as an entrepreneur, sometimes on the same day."

• Joos recommends dividing your presentation into these rough chapters: summary, market, solution, team, use of funds, and recap. Here's his quick outline on how to wow investors with your overview presentation.

Perfecting Your Pitch, Part Three: The Overview Overview

• Summary• Start by saying, "If you only remember three things about our business plan, you should remember these ..."

Adapt your elevator pitch, including your mission statement, business idea, and call to action. In one or two slides, tell them what you're going to tell them, give a quick sketch of your business, and let them know what kind of money you're looking for. "Don't make it a secret," says Joos. "VCs hate a striptease. Tell them what you are up front: 'We're a hardware solution designed to help cache better on servers, and we're looking for a round of about $5 million.'"

• Market• "Lead with the problem," Joos advises, "and follow with the opportunity." Describe the need your business will

meet, and then explain how you will transform that need into a business opportunity. Back up your case with market research. The more granular and consumer-focused -- the better it will be.

• Business Plan• This is the solution part of the presentation. Joos breaks it down into five pieces, but he doesn't necessarily

recommend one slide for each.• The Idea: Sketch out your idea. Remember this is an overview. You may have to delve into details briefly, but don't

get caught up in them. "When I sold for IBM," Joos recalls, "customers would say, 'Hey, how does this big computer work?' And I'd say, 'It works damn well, and let me tell you what it can do for you.'"

• The Technology: "Next," Joos says, "VCs need to understand something about your technology. They're thinking about barriers to entry and intellectual property, so you don't need to get too granular. Just give a basic grasp of what you're doing."

• The Competition: Discussing the competition means striking a tricky balance. Don't dwell on the competition, but don't leave out any major competitors out either. "You don't want to make them paranoid," Joos says. "At the same time, nothing turns off a VC faster than discovering a competitor you didn't bother to mention. Remember, too, no competition isn't so good a sign: Apple came out with the Newton ahead of any competition and failed miserably.”

Perfecting Your Pitch, Part Three: The Overview Overview

• The Marketing Strategy: "The day of dotcom Super Bowl ads is over," Joos says. "VCs want to hear real facts and figures about how you're going to market your idea. A strategic alliance? A killer pilot site? You must explain your leverage points. You can't move the world alone. Where is the fulcrum?"

• The Path to Profitability: "Finally, tell the investor how you're going to make money," Joos says. "Break out the bar charts and the financials, but be forewarned: All those charts look the same and everyone's making $70 million in the third year. VCs will care about your assumptions and your metrics, the pedals that make your business move faster. Tell them, 'We plan on getting $100 per customer, per year. We plan on owning 14% of the market. Therefore, we plan on making this.' Your assumptions and your metrics help them gauge your logic. And your logic is more important at this stage than the results of your mathematical equations."

• Team• Tell the investors about your team's relevant experience. If you don't have a complete team, say so. "If the

investor notices that you need a VP of marketing, and you don't address that obvious need, you will look unprepared for the road ahead," Joos says. "Tell an investor your shortcomings so she can understand what you're thinking about."

• Status, Time Line, Use of Funds• "This can be real simple," Joos says. "'We're completing beta trials and expect to have a pilot site up by July. We're

going to use the funds to complete our team.' VCs don't need to know that you're going to spend $51,000 on capital improvements. They won't believe those numbers anyway. Just explain your time line and how you plan to use the money in broad terms."

• Recap• Here's where you tell them what you told them. Remember pitch decay: pull out the main points of your

presentation, and restate them with a renewed call to action. You must cut it down to just a few key points -- five is okay, three is ideal.