SlideMagic Blog

Sometimes a startup idea is already stuck in the mind of a potential investor. I think pretty much any VC is convinced that ultimately mobile payments or social friend-to-friend shopping recommendations could be huge businesses. The bottle neck is: how to make it work. When you pitch your startup idea in one of these fields, you will be welcomed by a healthy dose of cynicism.  Do not waste your time on preaching to the converted, but have your pitch target the bottle neck in the mind of the investor.

Case studies in investor and sales presentations are most of the time hollow and fluffy quotes that were clearly the result of an email saying “Do you mind if I quote you saying that our solution is highly flexible and scalable?”.

Here are a few ways to make a case example real:

• Focus on one specific benefit, if you try to put your entire story in the mouth of your customer, you need 30 slides, not one
• Cut the fluff
• Be very specific, and very detailed, quantify if you can.
• Add an image of your client to make things more authentic.

Case studies can be more than a simple quote of text. If you want to show that your system can be installed within 6 weeks, why not show a bar chart of your last 10 customer installations, with the exact time it took to install the system?

Tell a real customer story.

Here is a strategy to sabotage new ideas in a meeting. Have a dominant personality. Be very loud. Make general statements. Distract attention from the point discussed. Avoid difficult questions. Shoot from the hip. Make personal attacks.

Such meeting dynamics requires careful presentation design. Identify all the key points you want to make. Make very bold, very simple, even simplified visuals to support each one. The objective is that the highly simple chart becomes a mental placeholder for the verbal discussion, its actual content is not that relevant (factual details can be in an appendix). Burying the sentence “Having 2 IT help desks in Luxembourg does not make sense” somewhere in a list of 7 bullet points does not help. Showing tiny Luxembourg on the map with 2 looming call center org charts will create that mental logo.

Now group all the discussion points in terms of importance and controversy. Then, create a final check list, overview map, pro/con table with a visual link to the mental place holders you created before. As soon as a random comment comes up, you can deflate it by pointing out that you already talked about it. As soon as someone tries to deviate the discussion you can point at it and say, we are now discussing this one.

Visual agendas can be more powerful than written or verbal ones to keep a discussion on track.

I was asked to mention common pitfalls in IPO presentations the other day. Here are some of my thoughts in random order

• Using an internal strategy deck as the basis for your presentation, rather than starting from scratch. Internal presentations are targeted at insiders, IPO presentations are meant for people who do not suffer from the Curse of Knowledge.
• Talking management speak, full of buzzwords. Institutional investors are sifting through investor pitches and data all day long, they are trained to cut out the noise. If you provide a lot of noise and padding, they automatically think there is no real substance to talk about.
• Over-structuring, repeating, repeating again. In a short investor pitch tell a story, do not try to get investors to remember key facts by drilling it in their heads.
• A generic investment thesis. Very high-level bullet points that could apply to just about any company: growth, profitability, etc. Diluting the core of what is special about your company with many, many other positives that are valid, but not that important. Like in marketing: too many benefits, no benefits.
• Avoiding the elephant in the room. institutional investors probably are pretty well informed about your company, and the key questions they have (often shared with journalists and bloggers) are pretty clear. Your presentation should address those, maybe not explicitly (here are our weaknesses), but implicitly. These questions are the only thing that people are worried about.
• Avoid the long-term growth options. There are legal restrictions to what extent management can provide business forecasts in an IPO filing, but that does not mean that you cannot educate investors on how you can think about valuing your business. Give a framework on what value components could be there for the long-term.
• Focus only on the company, not on trends in broader society. Sometimes the key driver behind the success of a company is a fundamental shift on how people are operating, how things are changing in the world. Your IPO is an opportunity for an investor to invest in that trend. If that is the main driver, discuss it.
• Confusing financial data. A 30 minute pitch is not enough time to go over the financial data in full detail. Still, there is no reason why you should confuse things instead. Give a good overall picture of the components of your company. Show how the revenue model is working. Show how the cost structure works.
• Forget the front line. Management talks about a company in terms of top line revenue, overall market share, but the real action is in the front lines. Give customer case examples, they are often a much more powerful illustration of the attractiveness of a business than top line figures.
• Recording your presentation in front of a camera, without an audience. Unless you are a professional TV host, people find it difficult to look natural in front of a camera. Invite a small audience when you are video-ing your tape. If that is not possible, maybe tape some images of people on some chairs in the studio/conference room so you can imagine talking to the people who are listening/watching you later.

When you start to write a college text book, or you are cutting up the project work for a team, you start with a structure: market, cost, competition, etc. When you start with a presentation, you start with the meat, the substance, the story, what you want to say. Big difference, often confused.

The other day I watched a startup CEO pitch, and his story sounded too good: “There are huge exits in my industry, a few IPOs, everyone uses this technology now, 5 similar companies in the world do really well and one is worth $1b”

“We started out 6 months ago and already have a great technology.”

While he convinced me that this is probably an attractive sector of the technology market to invest in, he also did not answer the elephant in the room question, “Are you arriving too late at the party?”

A year after discovering it, I finally got around to reading Moonwalking with Einstein(affiliate link), by Joshua Foer. A journalist gets fascinated by memory championships, and takes on the challenge to participate himself. On the way he explains how to train your memory, and puts memory in a historical context.

Why am I interested in these types of books? Presentations are all about helping people remember your story. We all know that forcing people to remember bullet points be repeating and repeating and repeating them does not work. The brain needs a visual story around which to store your message.

And it turns out that is exactly what memory champions do. They commit random numbers, names, facts, to rooms in virtual memory palaces in their brain. These palaces are often based on places the contestants know very well: a home, a school, a library. In these rooms, the objects are placed in the most outrageous (memorable) ways possible, including smells and sounds. After you put everything there, you can simply take a walk in your virtual memory palace and see all objects in front of you.

Scientists now think that the brain actually never forgets anything (capacity: 10-100TB). The problem is accessing the information. The brain needs an emotional stimulus (smell, visual) to unlock its memory. Slightly different than a indexed memory access of a computer. People think that we are so good at remembering places, locations, stories is survival: how to find a place with food, and then more importantly, how to find the way back home was a more useful skill in the stone age than remembering phone numbers.

Common presentation design wisdom is to start your design process by going analogue, sketching an outline on a piece of paper, on yellow stickers on a whiteboard, or in a mind mapping app. That is one of three components I start a presentation design with. Two others:

1. A completely finished, random slide that is easy to make (a financial forecast for example) and just looks great to design the overall look and feel for the deck, yes going straight in to slide design software at hour 0
2. A sketch of “killer chart”, a diagram that is the core of the whole story, the most important concept that needs to come across.

With these 3 pieces done, the biggest creative problems have been solved, and it boils down to executing your design.

This tweet by Michael Arrington says it all: investors are human, take it slowly and answer the very first thing what is on their mind: what is it that you are actually doing. You might have been working on this startup for months now, an investor hears about it for the very first time. You suffer from the Curse of Knowledge, and remember, an audience who is guessing what you do in the back of the mind is not paying attention to all the other things you want to say.

Just read an entire investor presentation, twice, carefully. No idea what this company wants to build or sell.Maybe sensors. We’ll see. — Michael Arrington (@arrington) March 21, 2012

Michael tried reading the deck twice, most investors will not do that.

Usually, a pitch starts really great. When asked, out comes a short and to-the-point story about what you are about. Then we add more info on this, more info on that, until we have diluted our story so much that it sounds pretty much like any other company or fund in your market.

Use the fact that everyone in your industry is creating noise about why the market is so bit, how it is growing so fast. Trigger a recall of this information in the mind of your audience through simple charts. Focus the majority of the time and slides on that unusual story about why you are different than all the others.

Maybe it is good to record that very first pitch on video so you can go back to it in the middle of the design process. Part of the value of a professional presentation designer is sticking to the story that came across in the briefing.