Some refreshingly different tips on presentations

 

presentationI’ve read several books on presentations and innumerable articles. I even have an entire category on this blog about pitching. But the article on Business Insider by Troy Wolverton, This Silicon Valley founder is an expert in designing presentations, has some excellent advice I’ve not seen before from Mitch Grasso, founder and CEO of Beautiful.AI.

Grasso is a former software designer and serial entrepreneur who has raised millions of dollars in venture funding. Two of his startups, including Beautiful.AI, have focused on presentation software.

Here’s his list of what to include in a pitch deck:

Founder-market fit. Outlining how your team is the team that is best suited to solve this problem or pursue this opportunity is paramount. Aside from the West Coast bias in favor of Stanford, most investors could care less about your academic degrees. What they want to know about the team is what experience and skills they bring to bear on the problem they are solving. I almost never seen pitch decks do this; founders tend to list all their academic degrees and maybe jobs they have held at hot startups.

Product differentiation. Ok, you’ve heard this one before. But Grasso lists it number two for a good reason. There is a sea of products and services out there. What makes your product not only different but why it is better than anything else on the market?

Why now? Founders tend to totally overlook the issue of timing. But timing is critical: too early and you won’t have the necessary infrastructure to support your product; too late and the competition will have staked out the market. Founders need to explain why their product couldn’t have been successful previously.

Grasso sums up with this advice:

All this stuff about traction and go-to-market and business plans, that becomes important as you move further along, but in the earlier stage, it’s more about that vision. Its about convincing rather than showing the data.

But here’s what separates Grasso’s pitch advice from everyone else’s: he outlines what to leave out:

Potential acquirers. Doing this signals to investors that the entrepreneur isn’t committed to the company long term.

Top down market analyses. Painting a picture of a very large market then promoting the idea that the startup just needs a tiny fraction of that market is one of my pet peeves! If you want to demonstrate to investors you are a rank amateur take this route. Otherwise you need to present a bottoms-up analysis: how will your sales and marketing efforts acquire the early adopters? Then later adopters? etc. You should be able to defend your customer acquisition cost projections, as well as your lifetime customer revenue projections.

The five-year business plan. This is a holdover from the last century – I did my share of them. I call this Excel fiction – and it won’t make the best seller list. Even three years is a stretch, but stretch you must.

Here’s Mr. Grasso’s bottomline: “At the end of the day, the pitch is about you, and if you can’t convince somebody of your idea without a pitch deck, then you probably don’t know your idea well enough.”

Bigger fonts, less words, greater impact!

jobs

The most common and most serious problem I’ve seen in the hundreds of presentations I’ve reviewed over the past few decades is presenters cramming far too many words into a single slide. Just to recap, here are the problems with this practice:

  • Try as they might, people actually cannot multi-task. Thus they cannot read your many words while at the same time listening to you talk. If they try they will just get frustrated. e.
  • Too many words on a slide necessitates type that is too small: it is hard to read, especially for middle aged people, many of whom have developed age-related vision deficiencies. Smaller text has less impact than large type.
  • Less room for graphics, which have a higher impact and recall rate than text.

So I was pleased to read the Inc. article by presentation guru Carmine Gallo, Guy Kawasaki Explains Why Steve Jobs Used 190-Point Text on Presentation Slides. The sub-title presents the benefit: Make your presentations stand out with fewer words and bigger text.

Using larger text forces the presenter to user fewer words, which need to be more carefully chosen.

… most presenters try to put as many words as possible on a slide–Jobs did the opposite. He removed and removed and removed through every iteration. The result was strikingly simple, often just one word on a slide.

Jobs would go so far as to have a slide with just a single word, in 190 point type! And he would show slides with no text at all!

According to cognitive biologists, the human brain is far more capable of recalling information when it’s presented as pictures with few words–one or two words to accompany the photo. If you take a look at some of Jobs’s presentations, you’ll see he followed the guideline.

There is one other tip from Mr. Gallo’s interview with Guy Kawasaki: “He [Jobs] really practiced,” Kawasaki says. “He made it look easy because he practiced for weeks.” When was the last time you practiced your presentation for weeks?

How to take advantage of the serial-position effect

presenting-2-1024x502

I came across the what are called the primacy and recency effects in an article on fake reviews.

Consumer psychologist Cathrine Jansson says some sellers might be aware of what is known as the primacy and recency effects. These theories state that people tend to remember the first and last items in a series better than those in the middle.

A little web searching turns up the article Serial-position effect on Wikipedia. “Serial-position effect is the tendency of a person to recall the first and last items in a series best, and the middle items worst.”

Clearly from the serial-position effect your first and last slides are by far the most important in your entire pitch deck.

What if you only had two slides to convey your entire message to investors? What would be the message on each slide? The graphic? Should these two slides be the first and last slides in your deck? What I’ve noticed is that most entrepreneurs do not pay enough attention to the very first slide in their deck, which typically just lists the name of the company and often the contact information for the founder (which belongs on the last slide, not the first!)

Clearly you need to spend a lot of time on that first slide. That should include coming up with a tagline that summarizes your product in a short and punchy line of text. Secondly you need an impactful graphic that supports your tagline. Try several variations on this slide until your mentors or advisors feel you have nailed it.

Your last slide needs to neatly summarize your pitch supported by a graphic. You may want to repeat your tagline as well.

When presenting give both your first and last slides more time on screen. Speak to those slides! Work on exactly how to open your presentation, perhaps with a venture origin story and how to close it, with why your product will be hugely successful. Keep in mind when doing a pitch at a contest or demo day when you may be one of many presenters that your last slide may stay up on screen until the next presenter gets to the stage. Take advantage of those few seconds with a killer closing slide.

One final point. As I tell my mentees, most people can only remember three things from a presentation. Due to the serial-position effect; the primacy effect will bias them to remember the message from the first slide, the recency effect will bias them to remember the message from the last slide. What other message will all those intervening slides convey that will be memorable?

 

Are business plans back?

 

Screen Shot 2019-04-12 at 10.24.13 AM.pngI was very pleased to see business plans die out, replaced by pitch decks. IMHO no one reads, and even fewer people actually read business plans! By the time these plans were completed they were obsolete. They tended to be more fact than fiction and were usually accompanied by voluminous Excel spreadsheets showing the classical hockey curve of revenue growth.  A giant waste of time for all involved!

But the Business Insider article by This serial founder thinks pitch decks are passé. Here’s what his startup used instead to raise $45 million in new funding argues that pitch decks are so over, replaced by a “pitch memo.” The pitch memo sounds exactly the wordy business plan of yore. But Parker Conrad, who founded three venture-backed startups — SigFigZenefits, and, most recently, Rippling, argues that a pitch memo is far more effective than the typical pitch deck. He clearly understands that pitch decks are meant to be presented, not read and thus must leave out a lot of detail that is provided on the fly by the presenter. So yes, pitch decks rarely standalone, in fact they shouldn’t. As I’ve written previously, founders need two versions of their decks: one to enhance their standup presentation, they other meant for sit down reading by an investor. I encourage founders to start with the highly detailed version, then edit it down for presentation usage.

There are two advantages to the written narrative, one is obvious, it can contain a lot more detail; the second is much less obvious and relies on a deep understanding of how VC firms work, which obviously Parker Conrad possesses. Investment decisions are made at weekly partners meetings – usually on Mondays – where the partners who are seeking an investment by the firm need to convince their colleagues it’s a good investment for the fund. By providing a “pitch memo” the founder can make it very easy for the partner championing their cause to write the memo to their partners for the firm’s investment decision meeting.

Riplings’ pitch memo is included in the article. It’s only 11 pages long and basically covers the same topics as a pitch deck, just in much more depth. In other words it looks just like the “business plans” that were de rigeur in the VC game back when I was raising money in the last century.

But while Parker Conrad has had great success raising money with his pitch memos, I’m not convinced pitch memos will replace pitch decks for two reasons: one, it’s so much easier to get feedback from friends and mentors on a pitch deck than on an 11 page memo, and two, people don’t read! The safer play is just to send a more detailed pitch deck that can be read by your target investor instead of taking the risk that 11 pages of dense text will not only get read, but not get passed around the firm either.

So I’m not convinced by the Business Insider article that founders should take the time to do both a pitch deck and pitch memo. These things change often and trying to keep both of them in sync is not easy – simpler to keep two different version of a deck in sync.

But that doesn’t means founders can skimp on detail – they need to foresee all the questions an investor may ask in the detailed version of the deck they email to them.

To recap my recommendations made previously here’s what you need in your search for capital:

  • A short executive summary of your business plan – one page or less with one eye popping graphic
  • A great subject line for the email you send to prospective investors
  • A body of text for the email that is so compelling that the recipient will open the attached file – which is your one page business plan
  • A pitch deck designed to be used as part of a presentation
  • A very detailed version of the deck to be emailed to prospective investors

With these documents in hand you can contact are large number of investors. But keep in mind the goal is not to give a presentation but to engage an investor in a conversation. Pitch decks and pitch memos are a means to an end, not an end in of themselves.

 

 

 

It’s pitch scrub season!

lyft

Every year MIT’s  Venture Mentoring Services selects a number of its ventures to present at Demo Day. A number of us mentors help the presenters by doing a two part pitch scrub for them in preparation for Demo Day. On day one of the pitch scrub they present their decks and we give them feedback, on every slide. They then take a day to revise their decks and present to the same group of mentors again. The changes are always amazing, as they far exceed our expectations. If you can say one thing about MIT affiliated entrepreneurs they learn and learn fast. And they can apply that learning superbly.

But it never hurts to get some tips, especially from Carmine Gallo, who is an expert on presentations and the author of several books on presentations that I highly recommend, including The Presentation Secrets of Steve Jobs.

Lyft’s anticipated IPO roadshow kicked off this week. Carmine extracts five communication strategies from Lyft’s 24 minute presentation.

1. Start with the inspiration behind the product.

Origin stories as they are known, are powerful  ways to open a presentation. They quickly answer the “Why should I be interested in this presentation” question. “Why does this product exist?” Co-founder John Zimmer studied hotel management where he learned about occupancy rates, a key metric in the hotel business.

“Cars are occupied only 5 percent of the time. The other 95 percent of the time they’re just sitting there. If you have a hotel with a 5 percent occupancy rate, you have a failing business.”

It you don’t have a good origin story that’s ok, but you will still need to quickly answer the “why” question. One good way to do this is to present a surprising statistic about your target market or customers. Such as, “Do you know that X% of bicyclists fall at least Y times in their first year of competitive cycling?” While personal stories forge the strongest connections with your audience, stories about your customers can also work well.

2. Frame the opportunity.

While  journalists call Lyft a “ride-hailing company,” the company does not position itself that way. I prefer the term “positioning” to “framing” as it tells the audience what you are and what you are not.  The two co-founders position Lyft as “On demand peer-to-peer ride sharing.”  Your positioning or framing basically answers the question, “What is it that your product does?”

This is also a good time to answer questions about your market opportunity: what’s its size? How fast is it growing? What are its dynamics?

Lyft does a great job of this:

“We have an opportunity ahead of us to deliver the largest shift to society since the invention of the car” and “Lyft addresses one of the largest market opportunities of our lifetime; a shift from car ownership to transportation as a service.”

3. Create simple lists.

People do love lists, as evidenced by the thousands of listicles begging us to click on them. Carmine Gallo notes how Lyft makes use of lists, by creating a list of why Lyft is a good investment. As I advise my mentors, Mr.Gallo advises you to keep your lists short, no longer than three to five points.

4. Focus on key metrics.

Investors need to see the numbers, and that’s never more true than at an IPO Roadshow. Lyft’s Chief Marketing Officer compares Lyft’s market, transportation to three other markets: healthcare, entertainment, and housing. Comparisons between the known and the unknown – your venture – are a powerful way to help the audience visualize the opportunity before them.

5. Make it simple.

This tip may be last but it is not least! At a pitch scrub yesterday with group of research scientists the words “you need to simplify your slides” were said to every presenter! I advise you to limit yourself to one point or message per slide. That can be conveyed in two parts, a text header and an illustrative graphic or even very short (15 – 30 second) video. Even more importantly, your product must be simple to use. If possible you should be able to demonstrate that ease of use and simplicity as part of your presentation.

It’s highly unlikely any readers of this blog will be presenting at an IPO road show any time soon. It usually takes years for a venture to go public. But these tips from Carmine Gallo will benefit any presenter. And do follow the links to watch the video of Lyft’s road show presentation. After all, if a picture is worth a thousand words, a video is worth a thousand pictures!

Sometimes advice columns don’t dish out the best advice!

 

businessMost of the ventures I mentor plan to raise capital at some point in their venture’s life, if they haven’t already. So being as I have been out of the capital raising game for the better part of a decade, I try to read as much as I can to keep up with current trends in startup investing. Thus I just had to read the article 4 Reasons Why Investors Won’t Invest In Your Business Model, sub-titled Approaching the private equity firms or investors and persuading them in [sic] the most daunting task for businessmen. A typo in the sub-title is not a good leading indicator, but I read on. And it’s repeated in the first paragraph! But this is from Entrepreneur.com, usually a reliable source … So let’s look at their “four reasons.” But first, always look at the author. In this case it’s not a person, it’s “BusinessEx Staff” not a named individual. So credibility goes down a few notches.

1.    Fail To Foresee The Future

I have the feeling this was written by a non-native English speaker, as the title would typically be “Failure to…” or “Failing to…”  First of all private equity firms rarely “scrutinize new entrepreneurs” because they rarely invest in new entrepreneurs. Private equity firms invest in on-going businesses or even buy them outright, with the goal of re-engineering the business and thus being able to sell it or even take it public at a significantly higher value than they paid for it.  Yes, “buy low, sell high.” Remember that! The only way one can know for sure if an entrepreneur can successfully foresee the future is to wait for the future to arrive … which can take years. But I do have to agree with the statement that “… it is vital as to how a business owner executes the plan and mould [sic] an emerging, nascent company out of it.” As Bill Gates has said, “Ideas are cheap, success is 99% execution.”

And I also agree with the statement: “The entrepreneurs, who lose this vision or get diverged by the money factor, fail to build concrete foundations of the business.” While again the English is tortured, the point is that entrepreneurs do need a lodestone to focus their attention. Having no vision or losing site of the vision results in companies thrashing – constantly pivoting. So no one can foresee the future, but you can execute your plan well, or not. And you need to build a plan to achieve your vision.

2.    Improper Cash Flows

Yes, the saying “cash is king in startups” is true. The worse thing an entrepreneur can do is to run out of cash. So being able to present a cash flow statement based on strong assumptions and early performance is indeed important.

3.    The Enormous Size Of C-Suite Executives

I’ve written before about the incredible growth in the size of the C-Suite. We now have Chief Design Officers, Chief Security Officers, Chief People Officers. You name it, there’s a Chief for it. Too many cooks do indeed spoil the dish. I am in violent agree with the message that startups should not have too many C-Suite executives. CEO and CTO should be enough for a raw startup. Having more CXXs is a red flag. Cliches prove true yet again: “Too many chiefs, not enough Indians.”

4.    Inability To Understand The Competitors

Back in the last century investors used to say in all my pitch meetings, “But what if Microsoft decides to copy what you are doing?” That got superseded by “What if Google decides to copy what you are doing?” I used to tell my mentees to ignore the “What if GiantCo enters your market?” question until I saw Instagram rip off the Stories feature from SnapChat, which fueled the growth of Instagram and hobbled SnapChat. So you better be sure that you aren’t hanging the entire fate of your company on one feature that isn’t difficult to clone – because success breeds many cloners, failures none.

Despite the inelegant English like “The business owners should further avoid these mistakes by planning strategized moves to entice funders and investors.” the advice is correct, but the idea the startups are going to be pitching private equity companies is just wrong. Where private equity does come in these days is in later rounds of companies growing rapidly that need a lot of capital, like Uber. The risk is much lower for these late round investors.  Let’s hope you are so successful that private equity comes knocking at your door! Until then execute, manage your cash tightly, keep the number of executives down to the bare minimum, and keep your eye out for competitors. Better yet build your company on a sound, sustainable competitive advantage.

A simple technique to improve your presentations

 

call out one

I learned a bit about publishing and the printed book while working at Addison-Wesley Publishing Company as General Manager of their Educational Software Division.  Back in those days of yore software actually shipped with user manuals, so I had to deal with layout, typesetting, printing, etc. How quaint!

But there’s one technique from print that I do recommend you borrow for your presentations, though this piece of advice is aimed at ventures who are far enough along to have a product to show, or at least a prototype.  The screenshot above was taken from an Apple presentation about a new version of the Apple TV.

While you may not have a giant screen behind you like this presenter (whose all black outfit merges with the image) you can still use the technique of call outs to help viewers understand your product. You can think of a call out as a special type of image caption. Instead of captioning the entire image a callout calls your attention to a specific part of the image, in the case above, to the numerous output on an Apple TV.

You can get really fancy and use the build function of PowerPoint or KeyNote to progressively add new captions to the same image.

call outs

With all due respect to Apple, kings of the keynote, I wouldn’t put a black product image on a black background, nor would I have the presenter dress all in black. Very funereal! Make sure your product or prototype image stands out against the slide background and that your callouts are big enough to read and clearly attached by fine lines to the features you are trying to highlight.