Way back in the last century we entrepreneurs had to product called business plans in oder to raise money. Long, text-heavy documents accompanied by pages of spreadsheets of financial projections. There were entire books devoted to how to write a business plan, web sites of business plan templates, seminars on how to write a business plan. I wrote about a dozen business plans myself. Like an unpublished author, most of them languish in a desk drawer.
But now in the 21st century business plans have disappeared and been replaced by the pitch deck. Why? Founders and investors have begun to realize that people these days don’t read. Too time consuming!
So as a founder how do you communicate with investors if they don’t read? Make it easy for them. Linear, word-by-word reading has been replaced by three new ways to consume information:
Scanning means to look at all parts of something carefully in order to detect some particular element. So make it easy for your reader to scan by formatting your document to highlight what’s most important: minimizing the amount of text, putting important words or phrases in bold, using larger fonts for important information, using indented lists, and plenty of white space. For example, many investors are most interested in the team and who is the CEO, so they are going to be scanning for that information. Make it easy for them to find.
Skimming – Time is the resource in shortest supply and in highest demand. So rather than read, reviewers will skim: pass their eyes lightly and quickly over your pitch deck, executive summary or even email, looking for something that might catch their attention. So that’s your job as a communicator. Stop the skimmers in their tracks! Do it with a stunning graphic, a mind-blowing statistic, a totally novel idea, or a little known but amazing fact. If everything in your document has equal weight reviewers will just skip over the surface and never sink their teeth in. Give them something to chew on!
Summarizing – many, if not most decisions have multiple parties involved. This is especially true with VC firms, where an associate may get entranced with your pitch deck but the actual investment decision will be made by a unanimous vote of the partners. So make it very easy for a reviewer to summarize your document. There is an old saying accredited, probably apocryphally, to Aristotle, Tell them what you will tell them. Tell them. Tell them what you just told them. Again, you are making it very easy for the reviewer by providing a summary that can easily be passed on verbally or excerpted for an email.
A related tip is the power of three in marketing communications, something I have arrived at by experience, but doing some Googling for this post I find it’s pretty common knowledge. Here’s a great article from Business Insider entitled Marketers Must Understand The Power Of Three. I believe we are hardwired to be attracted to 3’s – stories have a beginning, a middle, and an end. Read the Business Insider article for a deep dive into the power of three and how it applies to marketing communications. It’s a powerful technique to capture attention in the age of the non-reader.
And finally, and most obviously, the image has overtaken the word in social media and thanks to SnapChat and Facebook, video will soon replace the image. So for the time being you can get away with using lots of images, but you better learn how to produce, shoot and edit video (and audio), because video is rapidly becoming the replacement for text and graphics. In fact I’m now seeing video replace demos in meetings with founders, as videos rarely, if ever crash – though getting a laptop to work with a video projector still seems to be a black art.