What Should Be In Your Pitch Deck — Part 2 — What Investors Think During Your Pitch

You spent weeks getting your Pitch Deck “right” and your team spent just as much time practicing their presentation — among yourselves and in front of friendly warm audiences. You feel ready to “let it rip” and see if anybody wants to help.

Assuming your Pitch Deck is great — and your Pitch is well rehearsed and really, really solid — here’s what your audience will be thinking as you pour your hearts out and run through your spiel.

WHAT INVESTORS ARE THINKING WHILE YOU PITCH

How great an idea/”thing” is it?

How big a problem does this address and solve?

How hard is it to sell?

How great are they at selling?

How long does it/will it take to ramp?

How well are they connected and entrenched?

How quickly will this space and the problems/solutions change and evolve?

Who are/will be their competitors and how rough & tumble is their space?

How hard is “it” to start, build, manage and sustain?

How deep do our pockets need to be if we’re wrong on this company/idea?

Do they have the right assets?

Do they have the right people?

Do they have the right partners/advisors?

How good is their 12-24 month plan?

Is this investment worth the investment — time and risk?

If “it” doesn’t work what is their (and our) Plan B?

Hoe much do we know about this space/how helpful can we be in making it successful?

Break a leg!  Cheers.  DC

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What Should Be In Your Pitch Deck — Part 1 — What Investors Want To See

I’ve been asked several times in the last 30 days to help folks get their Pitch Decks “right”. Always interesting to learn about something new — but — much of the time is spent on helping folks understand What Investors Want To See (this post) and What Investors Think During Your Pitch (Part 2 — my next post).

With the caveat that beauty is in the eye of the beholder (in this case mine) — here’s what your deck should address (the order can vary based on your strengths and selling points):

WHAT SHOULD BE IN YOUR PITCH DECK

THE OPPORTUNITY
– Mission — what are you trying to accomplish?
– Opportunity — how big is the opportunity?
– Timing — why is now a good time to attack this?
– Solution — what are you trying to do/build to address this?

THE BASICS (yeah yeah – “it’s a thing that does a thing”)
– What is “it”?
– How does “it” work?

CURRENT SITUATION
– Competition/Competitive Landscape – who’s there now and how do they compete?
– Progress ToDate – where are you now/what have you done thus far?
– Financial Snapshot – $$ raised life to-date and current spending (monthly burn)?

TEAM (impress me here)
– Team
– Advisors
– Partners

GROWTH
– Growth Plan — Now -> Next -> Eventually?
– When/How do you achieve critical mass?
– Selecting Opportunities — how do you choose among the possible alternatives?

INVESTMENT (the ask)
– Investment Needs
– Spending Plan – $ by spend category and timeline (quarterly)
– Expected Return – how and when do “we” make $ on this investment

SUMMARY
– Why is this great?
– Why should we care?

Break a leg!  Cheers.  DC

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What Business Are You Really In ?

I’ve been meaning to write this post for several weeks — but had other distractions.

A friend dropped by the office for a catch-up and was venting about his very frustrating relationship with his Sat TV content provider (DIRECTV).  Assaulted by ads for great monthly package deals, his own calls to them to renegotiate his package were met with “Sorry – those deals are for new customers only”.  Feeling de-valued as a long term (heretofore loyal) customer he had spent the weekend shopping for an alternative.  DIRECTV’s website states they are  “committed to delivering the best TV experience for you everyday”.  Where does making a loyal customer feel good about paying them “fairly” fit into that experience?  At least for this customer – what business are they really in?

About the same time I read an interview with an HBO executive where the discussion centered around content unbundling, stand-alone content platforms, the difficulties of getting consumers to pay for content and concerns about digital piracy and logon credential sharing.  I’m paraphrasing here but the gist of his response was “we’re in the addiction business”.  In other words, the primary concern was to get consumers addicted to the content — how they accessed it and and how or who paid for it was secondary.  Necessary sure — but secondary.

The different way these two “stories” resonated — reminded me that how we articulate what business we’re really in — to our employees, our customers, even our competitors — can and likely does make a huge difference in the way our teams think, behave and respond.

I read about a class action lawsuit in California brought against Uber — seemingly in response to complaints by taxi cab companies (and regulators) of them engaging in unregulated/unfair competition.  Uber — again paraphrasing — essentially rebutted the complaint by saying they were not operating a competing taxi alternative but were instead a lead generation app that connects buyers and sellers.    They view their business entirely differently than I had viewed them before reading this article.  Kind of like eBay or Ticketmaster?  Again interesting.

Move forward a few weeks — and I was having a discussion with my favorite restaurant partners about what makes them successful.  Expecting comments about food quality, service excellence, menu uniqueness, etc — the quick response was “we’re in the delight the customer business”.  Smart lads these.

What business are you really in?  What would your employees or your customers say if I asked this question?

Cheers.  DC

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Do Simple Better

I love watching baseball – and my favorite is MLB TV and the MLB iPad app – where I catch any of a dozen teams I follow, including the Chicago Cubs.  I love the Cub’s Manager Joe Maddon — one of those really smart types that can break down the complicated and make it actionable.  In a post game media interview recently he wore a t-shirt with the motto “Do Simple Better” and went on to explain which of the 4 or 5 simple things that happened in tonight’s game made the difference for his team.

What a powerful thought though — Do Simple Better.

The next day — a restaurant owner told me a story about his team pondering how to reduce wasted coffee creamer – the winning solution?  Smaller containers.  Simple.

I think we should all get Do Simple Better t-shirts to remind us that the simplest solution is often the best one — but also often the hardest one to see.

Cheers.  DC

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“Smart People Drag Around More Baggage”

One of my many breakfast discussions with business friends and associates got onto the topic of hiring (or electing) the right people — and what criteria really matters.  Not just the simple stuff like verifying experience or credentials — but the visceral stuff like spontaneous insight, goodness of fit, malleability, transparency, self-throttling, alignment on definition of achievement.  You get it — the “yeah, yeah they’re all qualified” but can our team agree on what really matters most?

Out of this discussion came the statement “Smart People Drag Around More Baggage” (thanks Chuck!).  In a lot of ways this is really true.  In our discussion, “smart” meant really high talent, high intelligence or high achievement workers — these folks are never really plug & play. They are capable of delivering the extraordinary — but much has to be a great fit to see that happen.  Bringing them on demands a pretty astute corporate self-awareness as these folks often have non-linear career assignment and progress, making peer acceptance challenging — or work hour/style flexibilities, built around their own peak performance scheduling — or business allies and enemies from prior lives, so there’s now a band in the background.

You get the drift.

The person matters a lot.  But the baggage (good and bad) they drag with them matters a lot too.  Interesting visual.

Cheers.  DC

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Georgia SB63 Beer Jobs Bill Turned Into Sausage

Much has been written about the trail of tears SB63 — the GA “Beer Jobs Bill” — has had to travel to even get considered by the Georgia Legislature, in a state that stands out for its extraordinarily restrictive three tier alcoholic beverage distribution system.  Unfortunately, most miss the point, the new bill will do nothing for jobs and has become a protectionist piece of legislation that bear hugs the status quo and smacks free enterprise in the face.

Imagine a small start-up brewer in GA.  The start-up makes small batches of different craft beers and wants to build a following and a product base.  They don’t make enough product to rely on others to collect and distribute their product across any meaningful market so they touch their customers the old fashioned way — face-to-face.  Folks come in and visit the brewery or brewpub, buy a tour or a meal and sample the wares on-site.  But now what?  Aside from personally visiting the storefront there’s no way for a consumer to get more of their product — and there’s no crowd build or revenue build for the brewer because the business model has no headroom. You want our beer?  Come tour our brewery (again) or come eat at our brewpub (again).

That’s where the brilliant Beer Jobs Bill came in.  Allow consumers to take home small quantities of beer direct from the brewery or brewpub and, over time, this will build new fans, slowly grow revenues to match slowly growing demand, create new jobs, and provide expansion capital — so eventually the production volumes and consumer demand will rise enough to fit GA’s alcoholic beverage control system.  And its far from radical — 45 other states have already passed similar legislation.

Sounds simple right?  Visit a brewery and you can buy up to 12 beers to take home. Twelve beers too many? OK – how about six?

Nope — can’t happen in GA — because these struggling Nano breweries conceptually threaten the exclusive chokehold Wholesalers/Distributors have on our markets here. (Any wonder Georgia ranks 47th among breweries per capita – 2013 stats brewersassociation.org)?

So after the sausage gets made what you end up with is (a) from a brewpub a single container of no more than 64 ounces to go — BUT only if you opened it at the brewpub and drank some of it first before getting it re-closed (which introduces oxygen effectively shortening the shelf life of the bottle) or (b) from a brewery one “souvenir container” not to exceed 64 ounces purchased only as a part of a tour.

Folks this is now window dressing and creates no new jobs.  Is it better than nothing? — yes but just barely.

The shame here is that a Beer Jobs Bill got turned into a Status Quo Protection Bill ensuring brewing start-ups in GA remain small and struggle for growth while the big Wholesalers and Distributors (not to mention the giant Brewers) aren’t threatened by these pesky start-ups.

Meanwhile Georgia legislatures’ seem content to celebrate this great deed and pretend to support free enterprise.

What a disappointment.  Sausage anyone?

Cheers.  DC

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What Type of Customer Are They ?

Great breakfast conversation with a friend this morning — CFO of a company having difficulty forecasting monthly revenues.

We’ll ignore in this post the obvious difference between difficulty in PRODUCING revenues and the difficulty in FORECASTING them (but that’s fodder for another blog post as lots of time what’s labelled as a forecasting problem isn’t really a problem with reporting its instead a problem with production).

In this case let’s just focus on thermal layering customers (and their associated revenues) into reporting/forecasting segments.  These are the ones I like to use for subscription based customer/product sets:

New Customers – exactly what you think they are.  Set some definitional parameters on when a “New” customer matures out of this category (e.g., 6 months or 1 year).  New customers are valuable for growth.

Recurring Customers – this is the default category that a New Customer matures into.  In most cases these are also your most valuable customers — make sure your recognitions, rewards and sales compensation plans reflect this (often NOT the case as companies chasing growth frequently bestow higher rewards on securing new customers than on retaining and nurturing existing ones — generally a flawed practice).

Recurring/Non-Recurring Customers – these are customers that we’ve seen before – and will likely see again – but for seasonal, product or competitive reasons seem to buy from us on some rhythm but not continuously.  This is a critical category to track — and a category where customers are frequently lost in the weeds during down periods only to be reclassified as New Customers when they reappear again.

Lost Customers – again exactly what they seem.  Just as with New Customers, set some definitional parameters on when a customer becomes “Lost”  (e.g., no orders in the last 12 months).

Transient Customers – what’s left — usually those folks that are one-timers or only occasional subscribers.

Sales strategies, compensation plans and financial modeling should vary for each category.

Happy Forecasting.  Cheers.  Doug C.

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