Communication Tools: How to make your idea credible and understandable - Entrepreneurship 101 (2012/2013)

COMMUNICATION TOOLS: HOW TO MAKE YOUR IDEA CREDIBLE AND UNDERSTANDABLE

AGENDA •  1. Why do you need the toolkit? •  2. How to create and use your toolkit? •  3. What is in the toolkit?

Business is…. Being adap:ve For proﬁt

You can start with a product idea

Seeing a need in the market •  hBp://www.youtube.com/watch?v=i5UbII_Q0_c •  0.59 to 1.22

You need tools on your journey of “validated learning” Ideas Data ProductThe minimum viable product is that version of a new product which allows a team to collect the maximum amount of validated learning with the least eﬀort.

Your are building a proﬁt engine

•  hBp://www.youtube.com/watch?v=i5UbII_Q0_c •  From 1.57 to 2.38

You will always deal with people

Customers, Investors and Employees all want to know •  What do you do? •  Who cares? •  How do you make money?

Percep:on We all see, understand and remember in diﬀerent ways

Create cohesive Solicit investment rela:onship with partners Convince Direct work of the B-‐plan customers to employees Exec Summary purchase from you PPT Deck White paper

Meaningful Milestones=3Ps Problems that the customer actually has and cares about Founders with domain knowledge Path to success for customers to inves:gate, compare, test and purchase ¤  Revenue model ¤  Demo or prototype technology ¤  Early indica:ons of the marke:ng equa:on (cost of customer acquisi:on & customer life:me value) Proof that the results, outcomes and value are real; How to scale the company ¤  Team that has its key team members ¤  Scalable working solu:on

Break your Customer Discovery in 2 phases 1. Problem Discovery 2. Solu:on Discovery Talk to your customers

How the customers deﬁne “quality”? •  hBp://www.youtube.com/watch?v=NoGnOscqyg8

How to create your toolkit? •  Do not start by building your business plan –  You will not have the informa:on you need –  You will examine issues out of priority –  You will expose lack of understanding •  Use the PowerPoint Deck as receptacle for all ideas and informa:on that comes to light – easy to manipulate, organize and adapt •  Build your execu:ve summary and eventually your business plan based on your PowerPoint deck

PowerPoint B-‐plan with Execu:ve Financial Summary Projec:ons

How to create your toolkit? •  Use your Business plan to communicate tac:cal priori:es to your team •  Develop two versions of the execu:ve summary: –  1-‐page abstract include Technology, Customer, Pain, Revenue, Team –  3-‐5 pages detailed summary with suppor:ng data, commercial risks and milestones •  Develop metaphors to make your innova:on “real” •  Give investors your exec summary and oﬀer to walk them through the PowerPoint slides in person or on the phone •  Develop visual assets (diagrams, videos) to use on-‐line and in your pitch deck

Selling vs. Planning VS. This is a selling toolkit

Understanding Individual Differences & Percep:on Common perceptual biases •  Stereotyping: assump:ons about others based on belonging to a certain category or group •  Halo effect: one characteris:c influences your overall evalua:on of a person •  SelecRve percepRon: tendency to consider informa:on that reinforces your exis:ng beliefs

Know your audience q  Speak to your audience in language that they understand: §  Ins:tu:onal investor – do not speak techie , :e everything back to money §  Angel Investors -‐ access their background; understand their interests

Understanding Individual Diﬀerences & Percep:on Biases related to decision-‐making: •  Availability bias: tendency to base decisions on informa:on that is readily available •  RepresentaRve bias: assessing the likelihood of an occurrence based on pre-‐exis:ng data •  EscalaRon of commitment: increasing the commitment to a decision in spite of nega:ve informa:on

Know your audience §  Strategic investor – may be more technical; will be interested in your ideas as they impact their business §  Strategic Partner – mix of technical and business; understand how a rela:onship will be mutually proﬁtable to both par:es §  Customer – understand their industry and pain points

Achieving Value Through Partnership: Foundaonal Framework for Alliance Success for STRATEGIC INVESTORS 3 Dimensional Fit Cultural Fit How compa:ble are the management teams and cultures? Cultural Strategic Fit Fit OperaRonal Fit How well aligned are How complementary the partners Strategic OperaRonal are the business objec:ves? Fit Fit models? Source: The Waren Company, an Andersen Consulting Alliance

Make your message memorable Make informa:on meaningful to them •  Case studies, tes:monials, personal stories •  hBp://www.screencast.com/t/EK8RSUzkngtM -‐From 10 sec to 32 sec

Social Media Tools •  Create an informed dialog with peers, partners, journalists and investors •  Ask people to engage in the conversa:on, cul:vate the audience with # and streams •  Plan your social media presence, e,g, –  Month 1-‐2: TwiBer –  Month 3-‐4 Facebook or Quora –  Month 6: Google+ –  Month 8: LinkedIn

What is your Value Proposi:on?

The Value Proposi:on Value Product Beneﬁts Problem Market Proposi:on Management

Be prepared to go back and change

Principles for Business Planning and Communica:on FACTUAL • No hype. Let investors become enthusias:c on his/her own DYNAMIC • Business planning is an itera:ve and adap:ve process • A clear, precise structure is a courtesy to those inves:ng their VISUALLY COMPLELLING :me in reading the proposal CONSISTENT, CONCISE, • The storyline and all the facts presented must ﬁt together CLEAR and generate a well rounded impression AUDIENCE-‐CENTRIC • Acknowledge style, recognize knowledge gaps and biases • Those who allocate investment resources rarely are EASE OF UNDERSTANDING technical experts for the technology used in the proposal

Do not Rely on “Reality Distor:on Field”

Blueprint for successful presenta:on •  What is my objec:ve? •  How will I close? When it is all over, what will they remember? •  How will I open the presenta:on? •  How will I organize the body? •  How will I get their aBen:on? •  How will I keep their interest? •  What ques:ons will they ask? •  What ques:ons will I ask? •  How will I tailor the presenta:on to the audience? •  What notes do I need? •  How many :mes should I rehearse?

Create Context Idea# 1: “Don’t Dive Straight into the Technology” (Value Proposi:on) •  Don’t start with technology. Everyone has this. Instead create context. •  Understand your customer’s pain points and show them how you offer a value proposi:on that is FASTER, CHEAPER, BETTER Idea #2: Maintain A Degree of Focus & Consistency in your Message (Brand) •  Focus on just a few of the really good things you can do and lead with these points. Idea #3: “Personify your People” (Profiles) •  Profile Managers Backgrounds -‐ Creates context for poten:al clients and investors. Idea #4: “Provide Proof of Results” (Case Studies) •  Tell a story. Focus on Results and the overall customer Experience. Use tes:monials.

Many forks on the road ahead: tools simplify what to say to whom and when

The Elevator Pitch •  What: –  A 30 second overview of your business concept •  Why: –  To get a follow–on mee:ng •  When: –  In a cold call to an investor, customer, poten:al partner, etc. –  Good for networking at trade shows, business func:ons, etc. •  Dos and Don ts: –  Do not spend forever prac:cing and reﬁning this – should come naturally; –  Figure out a few key messages you would like to get across to use as a loose script –  Distribute key messages to outward facing employees – standardize message

The Execu:ve Summary •  What: –  3-‐5 page summary of your technology, product, sales plan, revenue path and financial requirements •  Why: –  A teaser document meant to generate a request for more informa:on or a mee:ng –  Readers will want to get their head around the concepts quickly •  When: –  When you have a warm intro or an invita:on to contact someone –  Integral first interac:on with an investor –  Rides the line between confiden:al and non-‐confiden:al – some degree of trust •  Dos and Don ts: –  Has to have the right emphasis given the maturity of the business concept –  Keep it current

The Whitepaper •  What: –  A fairly concise layman s summary of your technology, product(s), the uniqueness of the technology and products and the value proposi:on •  Why: –  Helps investors to understand how a concept or technology works •  When: –  Awer investors are curious about details or have bought into the big picture business vision •  Dos and Don ts: –  Put the whitepaper on your website –  Don t go so deep as to give away all of your trade secrets/IP – consult your IP professional –  Keep it as short as possible and fully explain all acronyms

The PowerPoint •  What: –  A ~15 slide outline of the key aspects of your business plan •  Why: –  Provides an overview of the business plan in point form –  Allows people to absorb a lot of key informa:on –  in a short period of :me •  When: –  Usually the second piece of informa:on an –  investor receives awer the execu:ve summary –  Investors love these because they can ﬂip through –  them very fast and get highlights •  Dos and Don ts: – Cri:cal document in the fundraising process – – present a sound story; make it look good – Prac:ce speaking to it, preferably in front of friendly people who will ask lots of ques:ons – Use graphics as much as possible

The Business Plan •  What: –  A rigorously prepared and executable descrip:on of how you will build your business Why: –  This is your roadmap for how you are going to build your business –  Describes roles and responsibili:es for building various aspects of –  the business •  When: –  When you have assembled enough solid informa:on to write it –  Highly proprietary; later stages of diligence –  Wait for the investor to ask for it •  Dos and Don ts: –  Owen made a condi:on of ﬁnancing or a board ac:on item –  Re-‐write with every major change in strategic direc:on –  Avoid the tempta:on to turn this into a sales tool – preserve its integrity as an execu:on plan

Communication Tools: How to make your idea credible and understandable - Entrepreneurship 101 (2012/2013)

by MaRS Discovery District on Dec 06, 2012

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