June 22, 2004
The Torturous World of Powerpoint
I've looked at thousands (tens of thousands?) presentations pitching new businesses since the mid 1990's. The vast majority of them suck. Unfortunately, it's not Powerpoint's fault (no - it wouldn't be better if Freelance has become the standard).
It's the content creators fault. Edward Tufte - a master of The Visual Display of Quantitative Information, thinks Powerpoint is evil and corrupts absolutely. Blogs like Beyond Bullets help reduce the corruption, but given that I'm trying to get a very specific set of information in a short period of time (usually 30 - 60 minutes), more specificity about what I think is "good" is probably helpful.
Several years ago, Chris Wand (one of the guys that works with me at Mobius Venture Capital) put together a list of questions that a pitch to a VC should address. The world would be a better place if all entreprenuers could automagically incorporate this outline into their pitches - at least to me.
Following are the questions to address.
1) WHAT IS YOUR VISION?
- What is your big vision?
- What problem are you solving and for whom?
- Where do you want to be in the future?
2) WHAT IS YOUR MARKET OPPORTUNITY AND HOW BIG IS IT?
- How big is the market opportunity you are pursuing and how fast is it growing?
- How established (or nascent) is the market?
- Do you have a credible claim on being one of the top two or three players in the market?
3) DESCRIBE YOUR PRODUCT/SERVICE
- What is your product/service?
- How does it solve your customer’s problem?
- What is unique about your product/service?
4) WHO IS YOUR CUSTOMER?
- Who are your existing customers?
- Who is your target customer?
- What defines an "ideal" customer prospect?
- Who actually writes you the check?
- Use specific customer examples where possible.
5) WHAT IS YOUR VALUE PROPOSITION?
- What is your value proposition to the customer?
- What kind of ROI can your customer expect by using buying your product/service?
- What pain are you eliminating?
- Are you selling vitamins, aspirin or antibiotics? (I.e. a luxury, a nice-to-have, or a need-to-have)
6) HOW ARE YOU SELLING?
- What does the sales process look like and how long is the sales cycle?
- How will you reach the target customer? What does it cost to "acquire" a customer?
- What is your sales, marketing and distribution strategy?
- What is the current sales pipeline?
7) HOW DO YOU ACQUIRE CUSTOMERS?
- What is your cost to acquire a customer?
- How will this acquisition cost change over time and why?
- What is the lifetime value of a customer?
8) WHO IS YOUR MANAGEMENT TEAM?
- Who is the management team?
- What is their experience?
- What pieces are missing and what is the plan for filling them?
9) WHAT IS YOUR REVENUE MODEL?
- How do you make money?
- What is your revenue model?
- What is required to become profitable?
10) WHAT STAGE OF DEVELOPMENT ARE YOU AT?
- What is your stage of development? Technology/product? Team? Financial metrics/revenue?
- What has been the progress to date (make reality and future clear)?
- What are your future milestones?
11) WHAT ARE YOUR PLANS FOR FUND RAISING?
- What funds have already been raised?
- How much money are you raising and at what valuation?
- How will the money be spent?
- How long will it last and where will the company "be" on its milestones progress at that time?
- How much additional funding do you anticipate raising & when?
12) WHO IS YOUR COMPETITION?
- Who is your existing & likely competition?
- Who is adjacent to you (in the market) that could enter your market (and compete) or could be a co-opted partner?
- What are their strengths/weaknesses?
- Why are you different?
13) WHAT PARTNERSHIPS DO YOU HAVE?
- Who are your key distribution and technology partners (current & future)?
- How dependent are you on these partners?
14) HOW DO YOU FIT WITH THE PROSPECTIVE INVESTOR?
- How does this fit w/ the investor’s portfolio and expertise?
- What synergies, competition exist with the investor’s existing portfolio?
15) OTHER
- What assumptions are key to the success of the business?
- What "gotchas" could change the business overnight? New technologies, new market entrants, change in standards or regulations?
- What are your company’s weak links?
----Comments----
One other interesting point Bill Joos raised: he's always surprised that entrepreneurs never start off their presentation by asking *them* questions. In particular, he thinks entrepreneurs would be well-served by asking two questions before presenting: "What attracted you to our company/business plan?" and "What are the top three things you would like to learn about our company/business plan in this presentation?"
[...]
Tim Oren responded to this item on his blog (which doesn't have comments enabled for some reason):
"One commenter suggests first engaging the VC in the meeting by asking their view of the market, and why the company was picked to pitch. I disagree on this one. I don't want my own views reflected back at me. I want to hear the entrepreneur's view of the market and the company's value add."
I believe Tim misunderstood my comment - I don't believe Bill Joos was suggesting entrepreneurs ask a VC ask these questions to enable them to parrot the VC's opinions. Instead, I believe the purpose of asking questions before the presentation is to allow the entrepreneur to engage the VC early in the presentation, gain insight into how they might tailor their message to the specific interests of the VC, rather than just flip into "presentation mode", blast their message out indiscriminantly, and then leg it out of there.
A presentation is like an accordian - you should be able to 'expand' or 'compress' the various sections according to your audience and their interests (expressed both overtly and implicitly through their questions, body language, etc). If, for example, the VC indicated that they were drawn to your business plan because they were quite familiar with the history of members of the management team, then you could probably compress the details of the management section of the presention and expand another area.
Tim goes on:
"The situation will get interactive soon enough if we're interested. At least at our place, it's a very bad sign to get through the first 15 minutes without being interrupted by questions."
This echoes a pet peeve expressed by Steve Jurvetson at a recent panel - entrepreneurs who weren't prepared to interact as part of the presentation and who cling to their slides and presentation format. After all, this is supposed to be a conversation - how comfortable will a VC be if you, the entrepreneur, appear to lack the confidence, vision, or in-depth understanding of your business to depart from your "script"?
[...]
Brad -- This is good stuff.
1. Although content is 99 percent of the game, tools do matter -- would you rather write a business plan in Word 2003 or Wordstar? Axon (www.axoninc.com) publishes a software package called Axon Solo that was designed for McKinsey and is a fantastic tool for creating presentations. PowerPoint's default templates are third grade at best, while Solo's templates provide the McKinsey look -- no 3D pie charts, just classic, basic, elegant design.
2. I get really pissed when at the beginning of the presentation someone doesn't provide me with a copy of the slides. I want to take notes and write down my thoughts, and to do so on a piece of paper that shows what I'm seeing on the screen.
3. In some cases it would make sense to have more detail on the printed copy. Every data should have a source and you might want to have the source on the printed copy but not the slide.
4. I want to be told where you're going. At the beginning, I want them to say, "I'm going to cover 10 points." The first slide lists those ten points. Each point is then numbered on the corresponing slide, so I can always know where I am in the presentation (and get a sense for how much longer it is going to last).