Honeycomb pitch deck

A reader pointed me to a pitch deck review of Honeycomb’s latest fund raising round. (See the post on TechCrunch). The deck itself can also be found and downloaded on SlideShare (which seems to have undergone a revamp).

The deck obviously worked, because the company managed to raise the $50m round. But I doubt that the slides in the deck were the key driver of this success. They slides look decent, but this is not stellar design. The purple branding seems a bit off from the corporate colors, some slides contain “white paper speak” that is typical in enterprise software, and the graphics between the slides are not completely consistent.

Honeycomb is a later-stage software company which can easily be x-rayed by investors who understand software: growth rates, CACs, etc. etc. It is the numbers (which are not in this deck but were shared in later-round due diligence discussions) that will reveal exactly where the company is going.

The important pitch is probably the “audio track” along side the slides: Honeycomb has managed to carve out a new software category that is/will become a key component of every enterprise’s IT budget. I am sure the CEO nails this in an in person presentation.

Always put other company’s pitch deck design and outlines in the context of your own company.

Showing busy bios on a web site

My venture 9xchange is new in the world of healthcare, wo we need to establish credibility by showing that we have significant experience and are backed by significant people. Here is what I came up with (see the 2 screenshots below).

I put up a dense grid with the bios of the people involved. Below this table, are a few recognizable brands from the world of healthcare. When you hover (or click on a tablet) over a person’s bio, a relevant subset of the brands light up.

Alternatively, when you hover over, or click the brands at the bottom, relevant people get highlighted, including the relevant small print in their CV.

You can check out the progress of the work on the 9xchange website.

Showing screen shots in a pitch deck

In most cases, it is not worth the time and effort in a short presentation to take the audience through a demo or a series of screenshots of your application. At this stage in the pitch process, understanding the exact flow of your application is not critical.

What can matter though is the simple question of whether you have a decent product or prototype or not. The role of a screen shot here is not to show the exact detail of your app, but more a proof point.

One way to make this point is to use an office background with some screens, and paste a number of screens on the monitors. That’s what I did in a recent deck for my other venture 9xchange. I made the office background black and white, to make the screens pop a bit more.

(Look how I managed to Photoshop the screen shot behind the standing desk light)

Three audiences for your company brand

A company brand has at least 3 audiences:

• Employees (including the founders), that need an inspiring and cool place to work

• Users that are looking for a brand that fits and appeals to the target market

• Investors who are looking at a fundable organization with fundable founders

Think about conflicting requirements when picking your name. Priorities might also change over time. Investors are very important early on, users a bit later. Your first collaterals (decks, a web site) are probably directed at investors.

This post was sparked by overhearing two conversations: one about whether picking a cartoon character as a company name would hurt appeal to investors, and one where a company named itself after an industry it explicitly claimed not be in.

Send a different deck?

After the meeting you promised to send the slides of your presentation in an email. But the deck you used, was the short one, and you have a better/longer one sitting on the shelf. It does have a different structure and graphical look and feel though. Should you send it instead?

Probably not. The slides you send are a quick reminder of the meeting, a permission to email the meeting attendees with your follow up question. Very few people might actually look at the slides in detail. And if they do, each slide is a visual placeholder for the story you told in the meeting. Sending a completely different deck might confuse them.

If you want to send the other presentation, do so in addition, and clearly mark it as something different from what they have seen.

More pro tips for follow up decks:

• If slides contained semi-confidential information that was OK to show for 5 seconds, you can take them out in this version to prevent people from studying things in detail (financials, roadmaps, etc.)

• Always send things in PDF, not the source file (PowerPoint .pptx, or SlideMagic .magic)

• If you are using SlideMagic, consider expanding the explanation panels on each slide, and write the summary of the messages of the slide in a few paragraphs, handy for people to understand a page better when you are not there in the room to explain things verbally.

Scripted improvisation

I just came back from an industry conference that involved all day, back-to-back, 25-minute meetings in small hotel rooms. Professional speed dating. Very similar in setup to the days I spend interviewing MBA graduates for roles at McKinsey at INSEAD.

These meetings are a challenge. You get tired (especially if you are jet legged), the setting is repetitive, and very unpredictable meeting dynamics and energy in the room. The setting is not right for a formal presentation. You have very limited time, the room is tiny without a screen to project slides, and the setting is very informal. The risk in this setting is that you never get to get your point across in the middle of small talk, room changing logistics and/or the distraction of cleaning staff replenishing the soft drink supply in the room.

In this informal setting, most presenters would “wing it”. Start a pitch in a conversational, improvised way, and see where it takes you.

I would recommend to do the opposite. Have a super tight, very short story, completely engrained in your mind. It is super-scripted, 100% the same in every meeting, and hits exactly the points you want to hit, in the right order. You have practiced and used the script so many times, that you can deliver it jet lagged, distracted without thinking, and most importantly, sounding completely non-scripted. It may sound strange, but the more you practice delivering a these short pitches, the more natural they sound.

As the story goes on auto pilot, you are sure that your messages get delivered, and your brain can focus on reading body language, and connecting with your meeting guests in pre- and post small talk. And remember, in these short meetings, your objective is to get to the next interaction, rather than landing the whole deal.

"I won't invest, but am willing to help..."

In some cases, an investor might take a meeting or call with zero chance of investing. The investor liked you, the investor is returning a favor to a friend….

The opening sentence of the meeting is likely just that: ‘Zero percent chance that I will invest” followed by a pretty good reason “You are a medical device company, and I only invest in drugs”.

After such an opening, some startups might still try. The result: still no investment, and an investor who is slightly annoyed and cuts the meeting short.

It is better to change objective, and see where this person could actually be helpful.

If it does not fit on a page, it is not good

Celebrity investors often joke that if your pitch cannot fit into a napkin, the pitch must be bad. This is feedback from a super famous investor, who receives dozens of pitches each day, gets pitched everywhere she goes. Yes, if you happen to bump into this investor in the corridor, launch into a 30 minute pitch and get cut off after 45 seconds, you are probably not good at adjusting the pitch to the environment you are in.

Each presentation setting is different. If you meet the celebrity investor’s team in a follow up meeting, and you give a super high level, superficial pitch that is over in 1 minute, you will not have scored many points to get you to meeting 3….

The one with the orange shirt

In big conferences you see a lot of presentations, and meet a lot of people, and it can be hard to be remembered after a quick corridor chat. For each conversation try to remember something unusual or memorable that happened. “I was the one that pointed you to a local vintage guitar shop”.

Getting the same question all the time...

Writing emails to busy people is hard. One thing to keep in mind is that they usually get the same type of question.

• Can I meet you for a coffee?

• Do you want to be on my Board?

• Do you want to invest in me?

• Do you want to buy my software?

If you are asking one of these questions, stand out from the others

If you are actually not asking one of these questions, make it very clear. Your email might get eyeballed very quickly and rejected with “no, I don’t have time for more Board seats”…

Two pitches, two pitchers

When pitching our new venture in the healthcare industry, we discovered that there are 2 totally different pitches, one to industry insiders, and one to complete outsiders.

• The insiders usually get the idea in a second, so the pitch switches to why they should join (and change the way they have been working for decades)

• The outsiders do not have the context and don’t understand the jargon of what we are doing. It requires an extra step back to explain the idea. When that is done though, they understand instantly why people should join.

In meetings, my partner and I are adjusting. I step forward in discussions with industry outsiders, while she leads the story for healthcare insiders.

"Picking your brain"

Often used as an excuse for a meeting, but is it really?

Every meeting should have an objective. Just casually chatting is a waste of time (in a professional context). The PYB sentence has been abused so many times that many investors and other people receiving such requests will instantly turn it down. There are better things to do.

• Do you really think you need to pick someone’s brain? Maybe think again, and there might be a very specific objective that you are actually after. Adjust your pitch, pitch deck, and meeting invite accordingly. It makes things clearer for everyone.

• Maybe you have a specific agenda and are afraid to reveal it. In the age of Zoom, people have become more efficient and open. Maybe your meeting target is actually totally happy to take a short Zoom call and brainstorm which of her contacts could help you in a job search.

From point estimates to drivers

Making a company business plan is tricky. Nobody can predict the future. Everyone can argue about the validity of a point estimate of sales in year 5: $45m…

I tend to remove as many of these hard coded point estimates as possible from my spreadsheet, and instead build the whole thing up from drivers or factors that ‘you can touch’. Instead of a hard sales number it is # of potential clients x market share x price per client.

Here is my approach, starting top down, then building a bottom up model

1. Start with the hard coded number (top down)

2. Back out of the number the implied number of clients, price per client

3. Make an assumption what market share that number of clients implies

4. Now hard code the market size, market share, and price numbers and tweak those to calculate the top line number

Now that you have set the revenue forecast, apply a similar approach to cost. Given the amount of clients you need to get every year, how much would it cost to get them? Sales trips, sales people, conferences to visit etc. etc. How much would it cost to support each client? This is a much better cost planning tool that simply adding a number in your P&L.

The result of this exercise is that you get a dynamic company model which logically makes sense, the only wild card being that number of clients that you put in.

Business plan - story mismatch

In business school we learned how to write a business plan and which slides go with it: market size, competitors, business model, etc. etc. The resulting slide deck is usually the first “presentation” of the company and often used as the basis for an investor or sales pitch deck as well. (Same happens when the last Board strategy deck gets recycled into a sales presentation for a more mature company).

Board presentations and business plan presentations are well, sets of slides that serve Board and strategy meetings. A sales or investor meeting requires a sales or investor presentation.

If you noticed that you always deviate from your slides when pitching your company, you might have the wrong slide deck in front of you,

Tape vs disk

Exactly my view as well:

This is why I actively dislike most videos and podcasts, especially if I'm trying to be informed, as opposed to entertained.

— Paola Bonomo (@LivePaola) February 14, 2022

Videos and podcasts are sequential tapes, text is a hard disk where you can access specific sections instantly. The first is great for a story, the latter is better for a quick reference.

Think about this for your pitch presentation as well, both have different advantages

• A short introduction video (sequential):

  • Gives a glimpse of who you are as a person/CEO, especially useful in the absence of personal meetings

  • Enables you to re-record your elevator pitch until you get it absolutely right, live presentations are a one-shot game

  • Eliminates storyline hiccups and tangents that you might not spot when shuffling slides in a deck.

• A short pitch deck:

  • Is the “graphical business card” of your idea, the look and feel

  • Enables people to skip through your story very quickly, especially useful for investors who are deeply specialized in a particular field

  • Allows quick repeat access to reference slides: key metrics, team bios, current investor profiles, etc.

  • Can be viewed on mobile devices on the go without the need for audio

No pitch is the same

The internet is full with standard layout for pitch decks. Yes, they mention all the ingredients of your story that should be covered. Many of these topics will be “hygiene checks”, the audience will get them instantly and you can cover them with a placeholder slide.

Where your story is different from others, you have to elaborate with some good visuals.

• A business model that nobody has ever seen before (think eBay when it just started out)

• Photos of your the prototype of your hyper car which prove that it actually exists

• A detailed CV timeline to show that you are perfectly able to run this company at the age of 21

• A collection of the standard KPIs for online retailers that every investor is expecting

• A market size that nobody realized existed, “wait, what, $5b per year on erasers?”

• Etc.

The psychology of images

An almost 50 page scientific article was published last month that looks at the impact of images, on financial investment decisions. A quote from the article:

We demonstrate that positive images significantly increase and negative images significantly decrease investment, despite the fact that the images do not provide additional information relevant to the investment tasks and should be disregarded by rational investors.

It all seem statistically relevant and scientifically sound.

It makes intuitive sense as well. A boring presentation without any images is not very effective. But people sometimes ignore the ‘mood’ of an image. Even if the visualisation of a concept is perfect, but you picked an image that is ugly, scary, gross, its visual impact will be the opposite of what you want it be.

Does this mean that you should plaster an financial presentation with meaningless pictures of rainbows? Probably not, everything in moderation.

See the results of the study here.

What your audience does not know

It is a waste to spend presentation on things your audience already knows, or already assumes is the case.

• Already knows: common knowledge among informed audiences. A specialized investor who invests in crypto knows the basics of what is going on in that market.

• Already assumes: something that people guess instantly, you IPO-ed both of your 2 previous startups, so the question can she be a startup CEO does probably not need any more time

You can score the obvious points very quickly with a snap reminder slide. Now it is time to move on to things that might surprise the audience (in a good way).

But remember, things can work the other way:

• Already knows: “It is impossible to make good returns in healthcare diagnostics”

• Already assumes: “She looks like she just got out of college, she cannot sell to big pharma”

Put yourself in the shoes of the adience.

"You had me at hello"

The quote from the Jerry Maguire movie. Some pitches go well. Maybe because the other side knows you, trusts you, knows the industry/competition well, and is ready to take things to the next step. No point in trying to pick up the pitch at page 15 with that very optimistic revenue forecast, and/or booting up that demo with potential bugs. That can happen in the next meeting.

Startup competitions

Startup competitions are different from regular investor pitches. Your are on stage to deliver a show to a crowd, not to a VC partner group. The jury members do not have to put their money where their mouth is. I asked a recent jury member for such an event to list feedback on investor presentations from the top of her head, without too much thinking. Here is the raw result:

• Have someone speak who masters the language. This is a back-to-back show, and if all candidates speak fluently, the one who does not will stand out negatively.

• Personality, attitude, enthusiasm, passion are far more important than professionally crafted slides.

• If you have to send a very junior team member to present, because the you, the CEO, has better things to do than to attend the startup competition, it is probably better not to show up at all.

• Contradicting myself, a presentation by (recorded) video was received remarkably well.

Startup competitions might suit some startups better than others. Things that score points for a big crowd: an unusual, non-typical, entrepreneur; an impact/green/environmental/healthcare-related company objective, a market that a non-technical audience can relate to, etc. etc.

When preparing for a startup pitch event, customize your slides and story and don’t bring your standard investor pitch to the event.