SlideMagic Blog

In a startup pitch try not to define yourself early on through an explicit competitive positioning. Early in the presentation, you can mention how current solutions fall short, and you do something clever to fix that. But only later should you introduce the actual names of the competitors.

Many hightech investor pitches contain parallels to big success stories (Facebook, Google, Twitter, etc.). Many of these analogies are forced. They do not make the right comparison, and worse, might actually confuse the audience.

There are two ways to use an analogy correctly:

1. Use it in a very short sentence to frame your idea very quickly to investors: “We are a facebook for old people”. After this statement the audience knows roughly what you are going to talk about, and you have set the stage to add details and nuance.
2. Use an exact and precise analogy. Broadly speaking, AirBNB is disrupting the hotel industry, but you cannot use this analogy if you want to disrupt the space travel industry. When you are planning to create trust among total strangers to engage in a privacy-invading transaction in some industry, you can pull the AirBNB card.

Update: Fred Wilson posted his thoughts on “This for that” investor pitches.

If a conference audience loves your presentation, it probably means that you are trying to achieve something that resonates with consumers. An investor presentations though, needs more: OK, you checked the consumer box, but is this a profitable business opportunity? Different question, different audience, different presentation slides.

Almost every presentation by a tech company has a big architecture slide in it, lots of boxes that are connected to the cloud. This slide does not explain what your products are, let alone how these products help solve your customer’s problems. It does show that though that your product is a master piece of engineering. If you want to say the latter, use the big architecture slide, but probably not on page 2.

Kickstarter has posted its 2013 overview here. What I like about it: done in HTML, adjusts for different screen widths, beautiful typography, and very nice use of video.

However, the opening slides with the stats are actually not that powerful. Rounding up numbers, using a simple data chart here and there, and maybe use maps would have driven the points home much stronger.

Still, it would be good if more people try to find a different format to publish their annual report.

Your audience has mental models of businesses in their head. For example, if you are raising money for your own new venture capital fund, people expect to see that you only invest in companies with a clear competitive advantage, great management teams with track record, that you as an investor are hands on, that your investment team is great and that the carry is 20%. All venture capital pitch decks sound like that.

If your approach to the business is different than the mental model, you need to explain it carefully upfront, explain the pure mechanics of the situation, before launching into the more emotional part of the presentation (showing how great your team is, and how great the investment opportunity is).

Your different model might be completely obvious to you, it is unlikely to be the case with an audience who hears it for the first time. I you wait for it in the back of the presentation, your audience all of a sudden will be confused (“Wait a minute?”) and the questions/discussions you are going to get in the end are practical ones, not about the great investment opportunity, but how exactly your fund works.

Investment bankers use presentations that are documents for reading, they are even denser than the slides a management consultant typically produces. And whereas a management consultant usually can be convinced easily to change a presentation approach, investment bankers stick to their traditional approach. I have been thinking why this is the case, because I believe that a more visual presentation approach also works in the world of finance. Possible reasons:

• Finance is a conservative industry, and a different looking presentation might give the impression that you are not serious.
• Bankers are actually good sales people and do most of their sales pitches verbally, they put up the confusing and dense slide with all the facts, but when you listen to the audio track, the story is quite clear. The slides are for reading after the meeting, the presentation is for listening only
• Bankers work under very strict time pressure, so there is simply no other practical way than to produce a deck by writing bullet after bullet.
• Bankers usually do not get very deep in to the strategy of a company (like a management consultant does), a company is a company with sales, growth, margins, PE multiples, and leverage. As a result, the presentation will look more generic.
• Bankers are used to reading/interpreting financial ratios: a EV/adjusted EBITDA ratio of 6.8 instantly rings a bell. A less financially savvy audience might need more than a bullet point to be impressed by this.

In most of my projects with a conservative investment banker, I try to negotiate a highly visual summary deck that goes in front of the dense appendix. Over time, we iterate the summary deck more and more, and the appendix gets used less.

A 20 minute presentation is usually to short to carry a live product demo. You might run into technical difficulties, and you are losing time/attention with banal product features such as logging in, etc.

In those cases it is better to use application screen shots, rather than the real thing. You can still point at your computer and say that there is a working prototype, and that you are more than willing to take people through in a separate, longer meeting.

The next level up is to crop/magnify the screen shots and focus only on those aspects you want the audience to see. Your Skype window, menu bars, and all other unnecessary screen real estate can be cut out.

Next level up: put big, bold, explanation arrows explaining what the user should see. Say that it is a really minimal UI, if it is minimal.

Now here is the big difference. Do not just structure your product demo alongside the feature list of your app. Instead, create a user story and let the app screens flow with the story. You can also include visual images that are not screen shots into this story board. Even better, link back to story elements you have used elsewhere in the presentation.

A product demo is a user story, not a list of features.

What you measure is what you get is a common management saying. Most line managers in large corporations are focussed on market share rankings and top line sales figures. Chart after chart of many investor presentations often repeat that same message, look how big we are. But a simple “We want to bet the biggest” is unlikely to be a compelling strategy to investors. How are you going to turn that size into shareholder return?

The Twitter IPO presentation is posted online. Overall it looks good and very professional, here are my thoughts on how it could have been even better (comments in random order):

UPDATE: The official presentation has been taken down, it is still out there on YouTube:

• The whole story is structured around a description of Twitter, what do we do, how do we make money, how are we going to grow. It could have been pitched more to the point: why is Twitter such a great company to invest in. This would have changed the flow of the story significantly
• For knowledgeable investors, there are a number of huge elephant-in-the-room questions about Twitter: the biggest one being, how are you going to make money? The presentation should have included hints to the answer to that question upfront in the presentation, and elaborate on it more during the presentation (the CFO only gets to the meat around 27 minutes into the talk, many potential investors might have tuned out by then).
• The presentation is full of social media speak: engagement, driving conversation, rich media experiences, content, etc. To an industry insider, the sentences make the exact point, but to an audience who might be tuning in and out (watching the presentation online, while now and then checking the email inbox in another tab), this creates too much white noise to which the brain pays limited attention.
• The look and feel. Twitter has an incredibly powerful branding (colour blue and the bird). It could have been used more prominently in the slides. Not by increasing the side of the logo, but by using the graphical language in the actual content of the presentation.
• Using the actual embedded Tweets in the presentation is good, but the small print makes them hard to read for the audience. Also complicated conversations (a celebrity chefs replying to a person preparing for a dinner party for example) do not really come across, or worse, the audience is trying to read all the stuff that is going on on the screen (windows, tweets, hashtags) and loses the audio narrative that drivers the big point home. A better solution would have been a tiny representation of the actual Tweet with an extreme close up of the content that actually matters.
• The 16:9 aspect ratio leaves some canvas blank on the tiny 4:3 screen of this 1990s video delivery platform of the Retail Roadshow service. For an IPO this size, they should have resized the slides.
• The energy of the presenters (CEO, CFO) is held back a bit sometimes. In some sections, it flares up. For example: the interesting statistics about Tweets during TV shows, or the CEO closing remarks about the importance of the platform that can give everyone a voice.
• Some very interesting messages are not reinforced by explicit slides. I found interesting for example that on Twitter, advertisers can target people by their actual interests in life, while traditional advertisers have to derive/guess these interests from demographics information. A big point, it deserves a slide. Another example: the majority of Twitter users are outside the US, while international ad revenue is a fraction of the US one, again a point that can be made in a slide, ideally with some growth curve that shows that it is not unreasonable to assume that international ad revenue is catching up to US levels fast.
• Video is used only in the beginning of the presentation (mainly portraying the founders), it could have been used throughout the presentation.  Interviews with people, or snap shots of important live events that were broken on Twitter. The video animation of the spread of the Obama-4-more-years Tweet was amazing to watch, and only popped up in a small window.