Company pitch versus product pitch

Product marketers can get bogged down in identifying endless lists of product benefits, each slightly different for different customer segments.

There is a problem with this for potential buyers of a product. The long list of benefits waters down what is truly unique about your product. All benefits sound exactly the same as the benefits that are being claimed by about every company in the world.

There is also a problem with potential investors in your company. Investors are interested in buying your company, not your product, so the scope is broader than product benefits. Also, they are buying into someone who is hopefully able to sell. "If I were a potential client, would I buy this product pitch?" 

Executive Summary?

Back in the 1990s, "Executive Summary" pages were summaries that you put in front of a strategy consulting document. They were meant for senior management / decision makers. There was almost something offensive about them, reminding you of your junior position in the hierarchy. Senior managers can skip the detail that you have been sweating on for months and get straight to the point.

The good thing about these summaries was that you actually had to think what it is you wanted the senior management to do, and you had to frame your argument in the best possible way. Writing these summaries often caused major shifts in the recommendations of the project.

Clients ask me frequently about an Executive Summary of a presentation. This time, it is about a summary document that they can email to someone ahead of a presentation, or in most cases, a document that should convince the recipient to agree to a presentation.

I think the classic Executive Summary memo is not the most engaging way to get people excited about your project. There are a number of differences between your need for a summary, and the Executive Summary of the strategy review that is addressed to the CEO of your company.

The CEO is probably very interested in the recommendations (what price should I pay for the acquisition target), and is fully aware of the broad context of the project. She just needs the underlying logic to complete her own understanding of the situation. And, she probably knows you, and can pick up the phone quickly to clarify something that is not clear.

The investor or potential customer might not be very keen to double click a Microsoft Word file and start reading about your investment or sales pitch. Worse even, she he has probably no clear understanding of what it is you are actually doing, and finally, she has no idea who you are, and when she does not understand things, will delete the email instead of calling you.

My advice: forget about the Executive Summary memo, and instead create a short visual presentation that will have many more pages, but will take the exact same time to go through as reading a boring text memo. The object of the summary is not to be complete, it is to get the recipient to want to hear more. Therefore, leave out details that are not yet essential for this stage of the process, you only want to create interest. Most importantly, make sure that it is actually very clear what you are doing / what you want, surprisingly that is not always the case in these summary presentations.

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We need to get everything ready

When I meet with a startup for an investor presentation, I am usually the first external "marketing person" they meet with. (Understandable, no investors, no money, no marketing budget). Some CEOs are nervous about the daunting task (and cash expense) of getting all those marketing materials ready as the company expands beyond product development. Sales presentation, investor presentation, one pager, leaflets, website, introduction video, etc. etc. ("Do you do those as well?")

My advice: take things one step at a time. An investor presentation is a good place to start, since any investor presentation needs to include some sort of customer sales presentation as well. (Investors need to be sold of the product).

The company/product story is often not completely set in early stage startups. So, freezing the spec and commission a lot of money to all kinds of designers might cause problems down the road. A presentation is actually a useful format to play around with visual concepts. Graphical execution might not be the best, but things can look decent enough and are easy to change.

After you feel that the presentation starts to work, you can consider upping the investment in the design of other marketing material. But here, I would do things gradually as well.

When working with video and video producers/designers, make sure you have a version of the footage that does not include text (in a specific font, containing a positioning that could go out of date) and logos (that could be changed later on). Video footage can be useful for a long time.

In short, it is better to do things step by step, rather than all at once.

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Deep dive

Three ways to show understanding of an industry in 10 minutes:

1. Construct a 90 minute lecture trying to cover everything, and squeeze it into 10 minutes
2. A very detailed deep dive in one aspect of the industry, showing an insight that nobody has ever heard anywhere else
3. Do this deep dive on a random subject that is brought up by your potential investor or client.

1 won't work, 2 is better, 3 is best

"22 reasons I won't fund you"

This is an interesting representation from the investor perspective by Jason Lemkin why he does (not) want to fund you. Some are relevant to presentations (my words):

• Integrity: gaming metrics, locker room jokes
• Exit strategy slide shows that you are not committed (not sure all investors will agree)
• Pooh-poohing competition (better to show that you understand them, rather than hiding their existence)
• Looooong industry background sections before getting to the point, the first decision point at minute 5, if you survived that one, the second one comes in at minute 20 
• Document formats that are hard to open

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Interview questions

Back at McKinsey, doing recruiting interviews was an integral part of a consultant's job. I interviewed hundreds of candidates, mostly back at my business school (INSEAD). When interviewers ask a question, they are most of the times not trying to figure out whether you can produce the 100% right answer. Instead you want to check out:

• How a person is thinking and reasoning
• Whether something that is claimed is actually true or not, by forcing the conversation into some sort of depth/details
• What the integrity of the person in question is, is she lying/talking her way out of things or willing to admit that she does not know
• How it is to work with someone.

Potential investors or customer will do the same. If you copy some fancy charts, or put in some buzzwords / hollow statements, a few questions will quickly lay bare your actual understanding of a situation.

"[Approach A] is much better than [Approach B]"
"Really, I did not know that?, can you give me a few examples of companies that tried Approach B and failed recently?"

Solution one, don't put the charts in. Solution two, read up and do your homework and form your own opinion.

Slides in a foreign language?

Should slides and your talk be in the same language? Ideally, yes. Visuals and the audio track are in perfect sync.

But I think for most audiences in Western economies, "business English" slides that support a talk delivered in a local language work perfectly OK. "Business English" is what I call the English that is spoken by most non-native English speakers. A very narrow vocabulary of English that enables you to express most common business concepts.

For some audiences having your slides might give you that added international appeal (a startup raising money across Europe for example, or here in Israel, where high tech slides designed in Hebrew would look really weird).

Slides in English raise the challenge for the presenter though. If you were planning on reading bullet points of the slides, it sounds boring in English, it sounds really awkward when you are live translating from English into your native language. Either things go really slow, or the translation sounds really funny, or - most likely - both.

As always, there are exceptions. Some highly conservative financial institutions have complicated investment approval processes where decks get forwarded/discussed without you being there. If your deck is primary for reading, then consider translating the whole thing.

Be aware that languages can create technical challenges as well if people do not have the right fonts installed on their computers, and mobile devices create additional problems. Always send PDFs.

I have done many of these types of projects for presentations aimed at local Israeli institutional investors. I would start with an English design (but laid out right-centered, graphs flow from right to left), the client would translate (challenge 1: Hebrew, challenge 2: business/science-specific jargon in Hebrew), and would clean up afterwards with a 50% understanding of what's inside the text boxes. 

First time fund pitches

It is easy to create a pitch deck for a first-time investment fund that sounds and looks exactly like a pitch deck for a repeat fund. Introduction of the team, industry perspective on investment opportunities, unique deal flow, active involvement with portfolio companies, and the fund terms.

But, in the absence of a hard investment track record, it is very hard to raise that first fund. Seasoned investors are taking an educated risk when investing in you. They see instantly that they are dealing with a new fund. Here are some pointers in your pitch deck that can give them more confidence.

• A good, non-boring description of your experience, maybe mapped out across a timeline together with your partner showing that you have relevant experience, maybe not in the field of making investments, but still useful. 
• Highlight the safety nets, partnerships you built, people that sit on your investment committee, and introduce their background as well
• Don't relay on consulting industry frameworks to show that you know what's going on in the industry. Instead, know the ins and outs of companies in the market, have a perspective on what fields are interesting to invest in, which not. Know competing / similar funds in the market
• Highlight other situations in your professional experience where you had to take an informed but risky decision, did it, and brought it to a good end

Yes, you admit that you are a first-time investor, but your institutional investor has figured this out already. Better be realistic and show why you deserve a chance to join the ranks of successful investors. 

Generic investor pitch presentation flow

Here is a story flow that I end up using often for investor pitches of my clients:

• Good idea
  • Once, there was a situation
  • Something changes/changed
  • This creates an opportunity/problem
  • It's not easy to solve it
  • Enter [company]
  • It's clever
  • It's different from the competition and alternatives
• Good business
  • Market: lots of (potential) users
  • Market: lots of dollars
  • Profitable: Unit economics work, company economics work (when company reaches scale)
• Good startup business
  • Product/feature pipeline is doable
  • Sales & marketing strategy is doable
• Good company
  • Team knows what they are doing
  • Traction shows that things are gaining momentum
• Good deal (often not covered in a presentation)
  • Board configuration
  • Deal terms

PR people and journalists

WebSummit was full of them. Apparently, there are 5 PR people for every journalist on earth. Each journalists in the tech world receives about 200 emails, pitches, stories per day. I listened to a panel with PR people and journalists discussing thing with each other. Here are my impressions partly driven by what they said, partly what I read between the lines.

Your product is actually not that interesting to them. Two hundred products per day, lots of copy cats ("Uber for X"). I actually think journalists don't have time, take the time to understand a technology, and hence don't find it interesting and/or write about it. It takes me a good 45 minutes to understand a company well, a journalist does not have that time, the reader does not have that time, and most journalists don't have an engineering background.

Big milestones are actually not that interesting anymore. Everyone raises $100m at a $1b valuation.

Other aspects of "your story" (becomes a buzzword) are more interesting. Did you come from an unusual background, does your company have some sort of social, environmental purpose (primary, or a side effect).

Do you actually need to be in a major Silicon Valley tech publication? If your target customers are in those circles, then yes. Maybe if you need to those "featured in" logos on your web page to strengthen your pitch to SV investors, yes. But otherwise, maybe spend your time and effort somewhere else.

"Social media" is becoming crowded and busy as well. With so many people creating noise, it actually boils down to a product that people want to use and talk about to their friends. Not so much social media, more building a great product.

So all of this is not to blame on journalists and PR people, it is just very crowded and noisy out there. 

Y Combinator on "good advice"

I set through a panel with partners from incubator/investor Y Combinator today here at WebSummit in Lisbon. The topic was about which advice is useful, which not, partly in the context of fund raising. Startup CEOs get bombarded with advice, while almost all advice sounds credible, not all the people who are given you advice (prompted, or unprompted) know what they are talking about.

As panels go, there was a lot of "noise" but these guys had a few pretty good points. Advice from these type of people might help you:

• People that have just done something that you are about to do, try to lift yourself up to the next level. They raised series A, you are getting ready for that round as your Seed funding dries up.
• People who have done that very recently and have "fresh" knowledge. The shelf life of advice is pretty short: technology moves on, the fund raising market develops, etc. etc.

Keep it in mind when someone critiques or praises your slides.

"They are just interested in the numbers"

One client told me the other day that a later-stage investor was interested in investing in his company, and the main interaction was with a relatively junior analyst who kept on asking questions about the numbers in the business plan, rather than probing the quality of the technology.

This can mean 2 things:

• The best way to present to late-stage investment fund focus most of the time on presenting growth assumptions to the junior analyst
• The company went more or less through the full due diligence of the company, they (think they) understand the main strengths and weaknesses of the technology, what is left to be done is stabilize the numbers in the valuation model. 

Option 2 is probably more likely. Although they keep on asking for numbers, does not mean that the overall story and context is not important.

Triangulating market sizes

It is hard to forecast the size of a market that exists today in a few years. It is impossible to predict the size of a market for a product that does not even exist. Startups working on new products deal with this issue in every investor presentation.

My suggested solution: come at it from different directions to give a potential investor confidence that there is something there.

• Big billion dollar point estimates from Gartner or IDC research reports, and pointing out that in the future part of that spend might be cannibalized.
• Looking at comparable markets. For example IT security spend is roughly 10% of every IT budget. If you are working on a new product category that you think will be as indispensable as IT security, you can provide a market size range by applying a % to a future IT spend forecast.
• Going down to company level, and point out that of the few pilot customers you have, they were willing to pay x$ per seat, x% of their IT budget, and then scale that up to the total market.
• Bottom up: customers x product per customer x price per product
• Etc.

In most cases your "made up" numbers which are backed up by a transparent and logical analysis will be more useful than point estimates lifted from out-of-date, out-of-context research reports.

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Investor versus client positioning

In most big B2B enterprise sales dialogues the client understands the market, knows the key players out there, knows the issues she is trying to solve. They don't care about margins, market sizes.

In most investor pitches, the potential investor knows the broad market segments that sound similar to the one you are operating in, knows how big they are roughly, knows major competitors. They are less interested in specific feature comparisons.

Presenting your differentiation, what makes you special, is different to each of these audiences.

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Which clients raise money?

I see dozens and dozens of technology startups and yesterday I sat back and jotted down the similarities between my clients that manage to raise money. Disclaimer: it is not scientific, it is not conclusive, and in many cases I actually do not get updated on whether the fund raising round was successful or not.

Here are some similarities:

• More than one exceptional team member, the company is not just carried by one strong CEO
• Straight to the point discussions during the briefing meeting, no buzz words, no vague marketing frameworks, no empty discussions about flow in the absense of substance
• A positive and happy working environment. Supportive feedback, respecting people's time instead of negative comments all the time, insisting on unreasonable deadlines, making people wait a long time, calling in person meetings to communicate something that could have been done in a phone call. These are places you want to do your best
• People are open to reposition, change things that are pretty fundamental to the company. 
• Taking advice and input form people the right way. Some people get listened to, others ignored.
• A realistic awareness of strengths and weaknesses

OK, you need to have a good business concept. But looking back at the above points, these are companies that designers like to work with (and presumably investors want to work with them as well). There is a contagious, positive energy among them.

Where to put the team slide in the pitch deck?

Venture capitalist Mark Suster posted a quick video about this issue.

His advice:

1. What you do (he is right, some pitches are vague about this), if you can, even without slides to make direct eye contact with the audience and establish rapport.
2. The exec bio, to establish credibility, why you are the right person to pursue this opportunity
3. The body of the presentation

He has a point. BUT, I would keep that bio slide super short, maybe limit it to the CEO and/or people who are presenting in the room and put the dense, detailed CV information in a slide later in the back. Grinding through lots of CVs of everyone on the team can break the momentum of the presentation (unless everyone on your team is a unique rockstar). Also not every startup has that rock star team (which probably gets you a minus from Mark anyway).

A final note, if you are presenting to Mark, there is no question, put that full bio slide on page 2. You should research every person you pitch to, and this is how he likes to see things, so that's what you do.

Problems, problems, problems, solutions, solutions, solutions

Most product pitches go something like this:

• Existing solutions have this problem
• Existing solutions have this problem
• Existing solutions have this problem
• Existing solutions have this problem
• Existing solutions have this problem
• Our solution does not have this problem
• Our solution does not have this problem
• Our solution does not have this problem
• Our solution does not have this problem
• Our solution does not have this problem

The story gets repeated, which makes the whole things boring. A better option is to elaborate on the problems, but then keep the solution section relatively short. You can even show a grid of small screen shots of all your "problem" slides, with tick marks over each one of them.

Example startup pitches

Here is a nice collection of early-stage startup pitch decks that managed to raise money successfully.

There are some common concepts in all of them:

• Most importantly, they are actually great ideas. LinkedIn, YouTube, AirBNB now look like totally obvious concepts, but back when they started out they were not.
• They explain clearly what the company/product actually does, often via a demo of screen shots. Many startups omit this important part of your pitch (surprisingly).
• Often, there is a very powerful traction slide inside. If you have grown your business from nothing to millions of dollars in 6 months, investors will pay attention, and forgive you if the rest of the slides in the pitch deck are not that good.
• All these decks are email friendly, you get the idea without the need for a presenter to explain it to you. (That is now actually the main type of presentation I design for my clients) 

Full circle

Every pitch starts with an informal, but often very good, story/conversation. Then we start to complicate things with slides, templates, storylines, structures until we get to some slide deck. Then, it is often useful to step back to the very fundamental investor questions:

1. What is it they are trying to do? (Often not clear in a presentation)
2. Will anyone want to use it? (Rational logic, emotional gut feel)
3. Can you make money from it? (There are many good ideas that do not deliver a profit)
4. Can this team pull it of? (Probably most important question)
5. (Can I construct a good deal given valuation, cap tables, Board seats, etc.)

Raising money with 5 slides

It happens. Some startups can create one slide that shows a line from 0 to 100 million users or $500m revenues in 1 year. Some startups can show a slide with clinical data proving they have the cure for cancer.  If you are not one of them, don't listen to pitch advice by these startups and have some more backup information.