SlideMagic Blog

In yesterday’s post VC Fred Wilson gave another interesting peek inside the brain of an investor:

• Investors are in the business of taking calculated risks
• Any investment has risks attached to it, you just need to manage/mitigate them
• And here is the key point: an entrepreneur who does not see (or does not want to talk about) the risks is an absolute no-go.

Investors are potential future Board Members looking for CEOs they can work with. Act like one.

Image: Painting by Tigran Tsitoghdzyan

You are only aware of your own sales or investor pitch. Your audience (investors, clients) sit through dozens of them. After 10 sales or investor pitches in a certain industry, they probably understood the key industry trends, and in their heads they are wondering how you are different from the others.

Have the “101” slides ready, but the body language of your audience should tell you whether you are the first presentation they are watching, or number 12.

Image by Malcolm Carlow

Cover emails that introduce a presentation are very important. It is the first thing the recipients sees. And given that more and more emails are read on smartphones that are not very good at handling attachments (still), they have become more important.

Here  are 2 poor cover emails:

• One that says too little: “Please see the attached business plan”
• One that says too much: the whole pitch cramped into the body of the email with out the visual support of your slides

The enemies we are fighting: getting ignored (the email is not opened), or getting deleted/archived before the whole message has had a chance to come across.

What can you do better?

1. A good subject line. If it is a cold email, use the full space you have, almost like a Tweet. Good subject lines intrigue, they don’t have to  tell the whole story. Good subject lines tell more or less what you want.
2. Write who you are, how you got to the recipient, what you do (no intriguing here, super factual and super short, let the recipient put you in a box) and say what you want.
3. The body of the email is all about intriguing. Unlike when you are in the room where you can stand in front of the door to prevent people from leaving, here, it is you versus the mouse click:

• Think very hard about what the intriguing aspects of your story are. Every pitch has usually only one, or two. (A completely counter intuitive approach to solve an issue, a truly unique team, etc.)
• Forget about the classical business plan story line, you need to get these intriguing aspects across as soon as possible, BUT think of a story flow that allows you to do that. In most cases you need to educate the recipient a bit before you can deliver the key surprise.
• As you add more content, think hard: does this line increase my chance of a response (pick up the phone, click the attachment, write a reply)? Sometimes the best is to keep things short. Cut buzzwords, cliches, any baggage.
• Look at the typography, line breaks, paragraph lengths. Do the right things pop out?

I noticed that many of the pitches I have been designing recently follow this kind of narrative:

• [Something] has been going on for ages
• It is hard to understand that with all technological progress we still have to do [this], [this] way
• Well, there is a good reason for, because until now it was not possible to get [this] right
• Enter [company] that for the first time can offer [this] and [that] at the same time
• This is not as easy as it sounds: for example look how hard it is to do [this]
• It is not hard to see why in a couple of years, everyone who used [this] will now be using [that]

After this, the more standard “about” section follows with information about the company, the product economics, financials, team, etc. etc.

Art: Vincenzo Campi, The Fruit Seller, 1580

The majority of business presentations are not TED Talks, are not major product launches, are not State of the Unions. Corporations automate and simplify many processes: accounting, HR, planning. These non-critical “presentations” are the glue/oil on which corporate middle management runs. Decision making and deal making is done around endless iterations of confusing and boring PowerPoint decks because we do not have time (see the irony) or are not in the same place to communicate directly and clearly and sort things out on the spot. Asking for another version of a PowerPoint deck and a meeting next week is the most convenient form of procrastination.

My presentation app SlideMagic (sign up to try it) has been created to kill this inefficiency and give everyone a simple tool to create good enough, decently designed business documents that can be created in an instant, freeing up time to do more interesting and important things.

Here are 2 types of internal corporate documents and reasons why you spend too much time creating them, and the audience is spending too much time decoding them.

• Big decision trade offs. The audience wants to understand what the options are and a clear set of pros and cons (preferably quantified and comparable) to make a decision. And, yes, they want to know which option you prefer. You write endless pages with market context, general trends, project team history, description of the work, without getting to the point.
• M&A deals. Consultants produce endless amount of pages with company backgrounds, company history, description of assets. While the buy side is out to make a DCF valuation model. It needs to understand what the basic business units are, how the economics of the business work, and how to think about forecasting things in the future. Maybe you should not write down a generic business description, but instead create a document that spoon feeds assumptions for a valuation model.

Sometimes, your company has 2 products with similar, but different stories. Pitch the products in full detail sequentially duplicates some of the common parts of the story (and bores the audience) A generic pitch followed by example 1 and example 2 makes the product pitches too weak.

A possible solution that I recently applied to a medical technology startup:

• Layout the basic idea behind the innovation that is shared between the products, not necessarily as a pitch, but more to educate the audience
• Set up the company as a combination of 2 parts
• Do a full pitch for product 1 (without repeating the basic concept that was explained in the introduction)
• Do a slightly shorter pitch for product 2, just highlighting the differences in the technology for product 2 compared to product 1.

Art: John Everett Millais: Twins, Kate Hoare and Grace Hoare, 1876

Everyone knows that you made them up, nobody knows the future, all startup pitches predict hundreds of millions of revenues at some stage in the future. Why bother putting these shaky financials in?

Yes, there is no point in including your highly precise 10 year financial forecast model, exactly for these reasons, but, there is still a place for financials in your pitch. Here is what I usually do.

• A reasonably detailed and precise “forecast” of the short term financials. In most startups, this usually involves only costs. And unlike the revenues, you can be pretty certain about where you are going to spend that investment on in the near future. The benefit: 1) investors know where their money goes, and 2) investors see that they are talking to a CEO who seems to know what she is doing, has things organised.
• A very high level annual revenue outlook for the next 5 years. Nobody will pay much attention to this hockey stick chart.
• But - and this is the useful bit - add another slide that shows in a few simple calculations what you would have to believe in order for that year 5 revenue and profit number to be true. The best is a multiplication of 5-10 simple numbers: # countries, people / country, market share, price / user, gross margin, fixed $ million cost. You teach the investor how your business model works (what factors are important) and provide a way to evaluate whether your forecast is highly optimistic, or totally insane. The underlying Excel model can still be very detailed (it should be), but the 5-10 numbers should be very simple. I have had design projects where the company went back and revisit the Excel model because of an inconsistency in these high level numbers.

Here in Israel everyone puts a “Thank you” slide as the last page of the presenting. Almost to thank the audience as it is impossible for the voice to be heard during the roaring applause. People ask me, should you use it?

It depends how.

The huge “thank you” with a big cheesy stock image of applause is definitely not the way to go. A dense page the repeats/summarises the entire presentation in detail also won’t work.

You want to end any presentation with a strong upbeat message. The worst ending is, “well, this is it, we are running out of time, and I just managed to stay in my slot”. It is better to put up a slide that puts in some call to action: “Sign up now to change the world!” or something.

For investor presentations, this is a bit harder. “Wire to this bank account” is pushing it too much. In these cases I actually put up a slide with a small/subtle “Thank you” (for your attention) title and the contact details of the person in charge of fund raising at the bottom.

As a visual I tend to use the a memorable photo, graph, concept from the presentation that works as a memory shortcut to my entire story.

In many investor presentations, startups want to educate the audience first on a big trend that is happening. But, especially in consumer/internet, people catch up really quickly and you will loose the audience attention and your credibility of you spend time and slides on explaining things that everyone understands.

Some examples I can remember (some of them from my time at McKinsey):

• Home pages
• Sticky eye balls
• Portals
• Market places
• Social networks
• Social media
• Viral videos
• Location-based services
• Online video and the growth of bandwidth
• Sharing economy

Smart VCs read the same blogs as you.

Art: Student at his desk, Pieter Codde, 1630

Your company changes rapidly, your pitch stays the same. I meet many company CEOs that started their company years ago, often at some startup pitch event. The story opening then was about them, in the absence of a real company. Years later, that same intro can often still be found in the presentation, just with an update of the sales and employee numbers.

Your pitch presentation should be one step ahead of your company, not one step behind.

Art: Lautrec, Woman at her toilette, 1889