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Getting Behind the Perfect Pitch - U First 2019
The document outlines essential components for startups to perfect their pitch for funding, emphasizing the storytelling aspect known as 'story selling.' Key elements include identifying the problem, presenting the solution and unique value proposition, understanding market opportunity and competition, and explaining the business model and financials. It advises founders to authentically convey their narrative while highlighting their distinctive advantages and growth potential.
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Getting Behind the Perfect Pitch - U First 2019
- 1. Proprietary and ConfidentialProprietaryand Confidential START UP SECRETS An insider’s guide to unfair competitive advantage Getting behind the Perfect Pitch @underscorevc #startupsecrets A VC’s eye view of your pitch and how to perfect it for funding
- 2. Proprietary and ConfidentialProprietaryand Confidential The VC’s Agenda Getting BEHIND the perfect pitch • Problem • Solution / Value Prop / Product • Vision/Mission • Market Opportunity / Size • Competition/Differentiation • Go to Market • Business Model • Financials • Team
- 3. Proprietary and ConfidentialProprietaryand Confidential Your Agenda
- 4. Proprietary and ConfidentialProprietaryand Confidential 4 Your story ?
- 5. Proprietary and ConfidentialProprietaryand Confidential Story telling ?
- 6. Proprietary and ConfidentialProprietaryand Confidential Story telling – Pixar Story telling • Through YOUR eyes Finding YOUR Dory
- 7. Proprietary and ConfidentialProprietaryand Confidential Story telling -> “story selling” Story telling • Through YOUR eyes Finding YOUR nemo • With your plot (s) Leaving your audience wanting more
- 8. Proprietary and ConfidentialProprietaryand Confidential Story telling -> “story selling” Story telling • Through YOUR eyes Finding YOUR nemo • With your plot (s) Leaving your audience wanting more • Your characters Which are you? • And your story arc Building to a close Becomes “Story selling”
- 9. Proprietary and ConfidentialProprietaryand Confidential The arc of your story 10
- 10. Proprietary and ConfidentialProprietaryand Confidential The arc of your story - as a startup – it’s “younique” The call – question, opportunity, need, pain and why you? (founders) The challenge – the immensity of the problem, opportunity and the consequences of not solving it, now! The conflict – impossibility of the solving it without change (gain/pain ratio, architectural shifts disabling competitors etc.) Growth – learning why your experience can address the conflict (team, customer examples, market size, barriers to entry) Solution (product/service) – why you uniquely have solved it! (leading to business model etc.) 11 These are just guidelines – make it authentically your story!
- 11. Proprietary and ConfidentialProprietaryand Confidential The arc of your story as a startup – fill this in 12
- 12.
- 13. Proprietary and ConfidentialProprietaryand Confidential Orient with purpose: YouTube 14startupsecrets.comGetting behind the Perfect Pitch Sometimes thought of as your Mission STORY = The Call
- 14. Proprietary and ConfidentialProprietaryand Confidential Problem?
- 15. Proprietary and ConfidentialProprietaryand Confidential Problem Statement: YouTube startupsecrets.comGetting behind the Perfect Pitch 16 February 2005 STORY = The Challenge
- 16. Proprietary and ConfidentialProprietaryand Confidential Problem Statement What problem are you solving? 4U: Unworkable Unavoidable Underserved Urgent 17startupsecrets.comGetting behind the Perfect Pitch STORY = The Challenge
- 17. Proprietary and ConfidentialProprietaryand Confidential Market Opportunity 18
- 18. Proprietary and ConfidentialProprietaryand Confidential Market opportunity Why NOW ? 1. Market dislocations? 2. Forcing events? 3. Buyer Triggers? Vision of the future • How the market will evolve? • How will you will lead it? 15startupsecrets.comGetting behind the Perfect Pitch If you’re not early with a vision, you’re probably too late STORY = Challenge
- 19. Proprietary and ConfidentialProprietaryand Confidential Market opportunity | Size it Why NOW ? 1. Market dislocations? 2. Forcing events? 3. Buyer Triggers? Vision of the future • How the market will evolve? • How will you will lead it? 15startupsecrets.comGetting behind the Perfect Pitch STORY = Growth
- 20. Proprietary and ConfidentialProprietaryand Confidential Solution 24
- 21. Proprietary and ConfidentialProprietaryand Confidential Solution -> Product Your Product / Service… • How fully does it address the pain / need? • Is it compelling enough to get people to take action? Is it 3D ? • Discontinuous breakthrough? • Disruptive? Think beyond tech – eg Business Model • Defensible? 17startupsecrets.comGetting behind the Perfect Pitch 3D’s STORY = The Solution
- 22. Proprietary and ConfidentialProprietaryand Confidential “Gain/Pain ratio” The gain delivered to the customer vs. The pain and cost for the customer to adopt 20 Gain Pain startupsecrets.comGetting behind the Perfect Pitch STORY = The Conflict What’s the right ratio?
- 23. Proprietary and ConfidentialProprietaryand Confidential “Gain/Pain ratio” > 10 to overcome inertia, to do anything, let alone mitigate startup risk 21startupsecrets.comGetting behind the Perfect Pitch RISK Gain Pain >10 “An order of magnitude” STORY = The Conflict STORY = The Solution
- 24. Proprietary and ConfidentialProprietaryand Confidential BeforeAfter
- 25. Proprietary and ConfidentialProprietaryand Confidential Solution -> Value Proposition 19 Before After Acute Pain Absolute Joy Vitamin vs. Penicillin startupsecrets.comGetting behind the Perfect Pitch STORY = The Conflict STORY = The Solution
- 26. Proprietary and ConfidentialProprietaryand Confidential Solution -> Value Proposition: AirBnB 19 Before After Acute Pain Absolute Joy startupsecrets.comGetting behind the Perfect Pitch STORY = The Conflict STORY = The Solution
- 27. Proprietary and ConfidentialProprietaryand Confidential Competition 31
- 28. Proprietary and ConfidentialProprietaryand Confidential Competition “We have none…” 34startupsecrets.comGetting behind the Perfect Pitch
- 29. Proprietary and ConfidentialProprietaryand Confidential Competition “We have none…” 34startupsecrets.comGetting behind the Perfect Pitch As a startup you’re often in a zero sum game Alternatives, Substitutes, Incumbents
- 30. Proprietary and ConfidentialProprietaryand Confidential Competition “We have none…” 34startupsecrets.comGetting behind the Perfect Pitch As a startup you’re often in a zero sum game
- 31. Proprietary and ConfidentialProprietaryand Confidential Competition -> competitive advantage Unique differentiation • Not just technology Barriers to entry • Rewind, repeat: not necessarily just technology! What is impenetrable, sustainable? • IP, patents, network, data etc 34startupsecrets.comGetting behind the Perfect Pitch Alternatives, Substitutes, Incumbents
- 32. Proprietary and ConfidentialProprietaryand Confidential Competition -> competitive advantage Unique differentiation • Not just technology Barriers to entry • Rewind, repeat: not necessarily just technology! What is impenetrable, sustainable? • IP, patents, network, data etc 34startupsecrets.comGetting behind the Perfect Pitch High HighLow Low b c d {whitespace} Bubble sizing for relative size of competitors The choice of axes is critical a
- 33. Proprietary and ConfidentialProprietaryand Confidential Business Model 37
- 34. Proprietary and ConfidentialProprietaryand Confidential Business Model: How do you make money / become sustainable? What is your model for • Creating • Delivering • Harnessing VALUE? 40startupsecrets.comGetting behind the Perfect Pitch
- 35. Proprietary and ConfidentialProprietaryand Confidential Business Model: How do you make money / become sustainable? What is your model for • Creating • Delivering • Harnessing VALUE? 40startupsecrets.comGetting behind the Perfect Pitch • Development, Co-creation, Partnership • Sales, Distribution, Customer Success • Pricing, Revenue, Profit Model
- 36. Proprietary and ConfidentialProprietaryand Confidential Business Model: How do you make money / become sustainable? What is your model for • Creating • Delivering • Harnessing VALUE? 40startupsecrets.comGetting behind the Perfect Pitch CORE value? CORE
- 37. Proprietary and ConfidentialProprietaryand Confidential Business Model: How do you make money? What is your model for • Creating • Delivering • Harnessing VALUE? 40startupsecrets.comGetting behind the Perfect Pitch = CORE value
- 38. Proprietary and ConfidentialProprietaryand Confidential Business Model: Mint How do you make money? What is your model for • Creating • Delivering • Harnessing VALUE? 40startupsecrets.comGetting behind the Perfect Pitch
- 39. Proprietary and ConfidentialProprietaryand Confidential Business Model -> Go To Market example highlights: Marketing Plan • Segmentation, targeting, personification • Marketing & Sales cycle • Inbound / Outbound Sales Plan • Inside / outside pre-sales and sales • Direct / indirect channels & distribution • Services and or product … in sync with and / or part of the business model 37startupsecrets.comGetting behind the Perfect Pitch Sales Plan Marketing Plan Awareness Interest Understanding Engagement Trial Purchase
- 40. Proprietary and ConfidentialProprietaryand Confidential Numbers 44
- 41. Proprietary and ConfidentialProprietaryand Confidential Financials • P&L, Cash Flow – Headcount – Bookings – Revenue • May need to break out things like Services depending on your business – Gross Margin – Expenses • Major categories like R&D, Sales, Marketing, G&A shown as needed – Profit/Loss – Cash • Historic – KPI analysis • EG Cohorts showing trends • Projected – 6 quarters minimum – Matches cash raise – 3 to 5 year = bonus startupsecrets.comGetting behind the Perfect Pitch 4545 : Realistic optimists?
- 42. Proprietary and ConfidentialProprietaryand Confidential Assumptions, Milestones & Metrics are more important than the spreadsheet! E.G. • Key hires • Product beta, ship • First customers • Channel partners • Etc… 46
- 43. Proprietary and ConfidentialProprietaryand Confidential 47
- 44. Proprietary and ConfidentialProprietaryand Confidential ??! 48
- 45. Proprietary and ConfidentialProprietaryand Confidential Cash raise Use of proceeds falls out of Financials Typically 18 months of runway Highlight key milestones that would set up for next round 51startupsecrets.comGetting behind the Perfect Pitch
- 46.
- 47. Proprietary and ConfidentialProprietaryand Confidential Team – YOU! Why are you the people to do this? Founders: • Hackers • Hustlers 51startupsecrets.comGetting behind the Perfect Pitch Entrepreneurs • Company builders • Market makers Board, Advisors • Rain makers • Power brokers
- 48. Proprietary and ConfidentialProprietaryand Confidential Summary & ask (next step) Recap on what you said you’d cover in your agenda, making it obvious why this is a great investment and why your are advantaged to succeed… Underscore is a VC firm that backs transformative entrepreneurs from inception to scale with dynamic capital and an aligned community designed to fit each startup's unique needs. startupsecrets.comGetting behind the Perfect Pitch 5352
- 49. Proprietary and ConfidentialProprietaryand Confidential Proprietary and Confidential Problem andwhy dotheyvalue it Solution Team (Why You?) now andintothefuture? Value Proposition GotoMarket User/Buyer WhyNow? Before After Seemoreat startupsecrets.com Business Model Market Opportunity Market SizeProduct Competition CORE Future(Vision?) What problemareyousolving? 4U: Unworkable Unavoidable Underserved Urgent • Howyouexperiencedit… • What uniqueinsight doyouhave? Isit 3D ? Discontinuousbreakthrough? Defensible? Disruptive? Thinkbeyondtech– egBusinessModel • Isthereacontinuousneed+use case? Product / Service… • Isit BLAC? • Isit aFeature,Product,or Company? • WholeProduct? • Market dislocations? • Forcingevents? • Buyer Triggers? • Howthemarket will evolve? • Howwill youwill leadit? • TopDown-Total AvailableMarket • BottomUp- AddressableMarket • Isit bigenough? • Trends,Drivers? • Uniquedifferentiation • Not just technology • Barrierstoentry • What isimpenetrable,sustainable? • Howcanacompanywithscarce resourceswin? What isyour model for • Creating • Delivering • Harnessing VALUE? Development Co-creation,Partnership • Sales,Distribution,Customer Success • Pricing,Revenue,Profit Model • Isit capital efficient? Whyareyou thepeopletodothis? • What uniquelyqualifiesyou? • What isyour advantage? • What isyour culture? • DecisionMaker vsCheckWriter Avg Revenue Per User, A Users per Customer, U No of potential Customers, C Growth rate of market, G% A * U * C = $ / year * (1+G) each year Howfullydoesit addressthepain/ need? 1 2a 7 2b 6a 3 4 5 6b What problem areyou solving uniquelywell for who Behind the Perfect Pitch – Weave your storyline throughout this… Perfect PitchCanvas
- 50. Proprietary and ConfidentialProprietaryand Confidential Questions? 54
- 51. Proprietary and ConfidentialProprietaryand Confidential T 617.303.0064 @underscorevc 53 State Street, 10th Floor, Boston, MA 02109, USA T 617.303.0064 @underscorevc 45 School St, 2nd Floor Boston, MA 02108 Thank you… startupsecrets.com /mjskok linkedin.com/in/mjskok @mjskok
Editor's Notes
- #3 One more thing – starts with a story…
- #4 But where should you start in your Pitch? Just like I did here, give an Agenda of what you’re going to cover, mainly to set expectations. What expectations you ask? Well, given my comment earlier that presentations often replace business plans, it’s important to set out your pitch. Is it a comprehensive coverage of your business that will go into detail covering your entire business plan, or is it brief introduction to your business to encourage your audience to learn more in person? Or is it something in between like an update to your current stakeholders on progress in the business with an interim capital raise? Whatever the case, present your agenda and set your audience’s expectations clearly so you can exceed them with that Steve Job’s like zeal for “one more thing” to put your audience over the top.
- #5 To entertain you along the way, as this is pretty dry subject, I will tell a story, as that is often a key element of any presentation. Usually it’s a story about you and how you came to decide to devote your working life to this new idea. In my case it is the story of a recent trip I made and you can try to guess where I was and then as you do I’ll tell you my story. It's in italics if you want to skip it during this read and just focus on the main slides So here is my starting point on that journey. It was a hazy morning. I really couldn’t see much except a few glimpses of the fall foliage. But I’ll tell you it wasn’t New England as you can probably tell from the terrain.
- #14 Next we need to shed some light on what the business is that you're going to build. It should be a gradual reveal - just as here all you can see is the light and none of the view Get your audience intrigued to learn more at each step - just as I was with the shadow being at right angles to what I would have expected from the window I could see…
- #15 This needs to be a simple statement, summarizing what you do uniquely well for whom and how. Keep it short and sweet, to provide context and orientate your audience to what is about to follow. Get your audience wanting to learn more.
- #16 Problem protect the Chinese from the northern nomadic invaders like the Mongols or risk losing their country. the Ming walls measure 8,850 km (5,500 mi).[4]
- #19 What is the market opportunity for bricks? Building materials? Etc …!
- #20 People often don’t include the 3rd point around customer urgency. You could say it’s optional, but in uncertain economic times, the default option for any customer is to do nothing. It’s incumbent on you to make sure that your solution, is considered at the top of the list of other potential projects or priorities, as many vendors will no doubt be vying for dollars from your potential customer. And remember that as a startup, you will usually be seeking funds from an existing budget, so you’re actually displacing planned spending priorities. Hence understanding customer urgency is very important.
- #21 People often don’t include the 3rd point around customer urgency. You could say it’s optional, but in uncertain economic times, the default option for any customer is to do nothing. It’s incumbent on you to make sure that your solution, is considered at the top of the list of other potential projects or priorities, as many vendors will no doubt be vying for dollars from your potential customer. And remember that as a startup, you will usually be seeking funds from an existing budget, so you’re actually displacing planned spending priorities. Hence understanding customer urgency is very important.
- #22 People often don’t include the 3rd point around customer urgency. You could say it’s optional, but in uncertain economic times, the default option for any customer is to do nothing. It’s incumbent on you to make sure that your solution, is considered at the top of the list of other potential projects or priorities, as many vendors will no doubt be vying for dollars from your potential customer. And remember that as a startup, you will usually be seeking funds from an existing budget, so you’re actually displacing planned spending priorities. Hence understanding customer urgency is very important.
- #23 People often don’t include the 3rd point around customer urgency. You could say it’s optional, but in uncertain economic times, the default option for any customer is to do nothing. It’s incumbent on you to make sure that your solution, is considered at the top of the list of other potential projects or priorities, as many vendors will no doubt be vying for dollars from your potential customer. And remember that as a startup, you will usually be seeking funds from an existing budget, so you’re actually displacing planned spending priorities. Hence understanding customer urgency is very important.
- #24 People often don’t include the 3rd point around customer urgency. You could say it’s optional, but in uncertain economic times, the default option for any customer is to do nothing. It’s incumbent on you to make sure that your solution, is considered at the top of the list of other potential projects or priorities, as many vendors will no doubt be vying for dollars from your potential customer. And remember that as a startup, you will usually be seeking funds from an existing budget, so you’re actually displacing planned spending priorities. Hence understanding customer urgency is very important.
- #25 The solution was really quite simple – build a great wall – but you’ve got to watch it too! And as I walked along the Jinshangling section, I could not help but be struck by the domineering watchtowers, of which there were no less than 67 on this section alone.
- #26 However you describe your value proposition, ensure your audience really “gets it”, before proceeding. And be careful not to make any assumptions here, that may come out of your familiarity with the opportunity. Instead be explicit about what could simply not be done without the solution you are proposing and why that is so compelling. (One other word of caution here. Many entrepreneurs, particularly technically driven thinkers spend too long on this section of the pitch. Just present it and don't try to describe every detail of the solution, no matter how proud you are of it! Present just enough to be clear as to why it is a breakthrough. And then use outside examples as proof points. See later on for more of this. )
- #27 Gain / Pain ratio? If like me you believe you can’t manage what you can’t measure, then you might find the following concept useful. It’s a ratio, designed to test the validity of value proposition and ultimately your proof points.
- #28 Gain / Pain ratio? If like me you believe you can’t manage what you can’t measure, then you might find the following concept useful. It’s a ratio, designed to test the validity of value proposition and ultimately your proof points.
- #29 In this picture I capture a section of the wall where the contrast between the new bricks on the left and the old bricks on the right is clear. Your value proposition should be equally clear.
- #32 The whole point of the Great Wall was as a barrier to entry The amusing thing to me was that looking at the terrain it was built on - that felt like enough of a barrier in itself, but clearly the Chinese didn’t feel that was enough Check on your own barriers. - Are they impenetrable?
- #33 This is always a fun section. Entrepreneurs often claim they have no competition because the idea is so unique.
- #34 This is always a fun section. Entrepreneurs often claim they have no competition because the idea is so unique.
- #35 This is always a fun section. Entrepreneurs often claim they have no competition because the idea is so unique.
- #36 This is always a fun section. Entrepreneurs often claim they have no competition because the idea is so unique. While that may indeed be true, it’s unlikely that you won’t have competition for at least the dollars that the customer has to spend on either existing approaches or alternatives. So what helps here is to describe very clearly what your unique differentiation is Then be clear what barriers there are to others following you. Technology is one obvious differentiator to bring out, but don’t forget others For example your business model, which may include your pricing advantage or your open source development capability or your ability to partner and or open up new channels. Other sustainable advantages may include the network of users you build up or the data being collected. In the end all these may be as compelling as your technology differentiation, and more important as a barrier to entry for competitors. Setup for “unlike” in positioning statement / vaiue prop
- #37 This is always a fun section. Entrepreneurs often claim they have no competition because the idea is so unique. While that may indeed be true, it’s unlikely that you won’t have competition for at least the dollars that the customer has to spend on either existing approaches or alternatives. So what helps here is to describe very clearly what your unique differentiation is Then be clear what barriers there are to others following you. Technology is one obvious differentiator to bring out, but don’t forget others For example your business model, which may include your pricing advantage or your open source development capability or your ability to partner and or open up new channels. Other sustainable advantages may include the network of users you build up or the data being collected. In the end all these may be as compelling as your technology differentiation, and more important as a barrier to entry for competitors. Setup for “unlike” in positioning statement / vaiue prop
- #38 Apart from defense, other purposes of the Great Wall have included border controls, allowing the imposition of duties on goods transported along the Silk Road, regulation or encouragement of trade and the control of immigration and emigration.
- #39 A business model describes the rationale of how and organization creates, delivers and harness value Again this is potentially a whole subject unto itself, but you should at least cover the basics of how you create, deliver and harness value. For example in a software company you should cover how you develop your product, sell, install and support it, and how you package and price it, and what channels you may sell it through.
- #40 A business model describes the rationale of how and organization creates, delivers and harness value Again this is potentially a whole subject unto itself, but you should at least cover the basics of how you create, deliver and harness value. For example in a software company you should cover how you develop your product, sell, install and support it, and how you package and price it, and what channels you may sell it through.
- #41 A business model describes the rationale of how and organization creates, delivers and harness value Again this is potentially a whole subject unto itself, but you should at least cover the basics of how you create, deliver and harness value. For example in a software company you should cover how you develop your product, sell, install and support it, and how you package and price it, and what channels you may sell it through.
- #42 A business model describes the rationale of how and organization creates, delivers and harness value Again this is potentially a whole subject unto itself, but you should at least cover the basics of how you create, deliver and harness value. For example in a software company you should cover how you develop your product, sell, install and support it, and how you package and price it, and what channels you may sell it through.
- #43 A business model describes the rationale of how and organization creates, delivers and harness value Again this is potentially a whole subject unto itself, but you should at least cover the basics of how you create, deliver and harness value. For example in a software company you should cover how you develop your product, sell, install and support it, and how you package and price it, and what channels you may sell it through.
- #44 Tools for sales funnels – MANY! EG https://ignitevisibility.com/tools-using-every-stage-sales-funnel/
- #45 Number of people on the wall was staggering – but tailed off the further I went !
- #46 Financial planning is a specialist skill though, and few entrepreneurs have it. It's an example of where we can often help introduce the right resources to get your plan together. Outer years are directional only – to show how big the business can be, how the model works, how growth and profitability can be thought about
- #47 Don’t be afraid to get into the details at this point – just as I was focused on the details of colors and contrasts in photo For your model for example it would be the details of ASSUMPTIONS and how they connect Assumptions milestones and metrics are more important than just the numbers your spreadsheet pumps out.
- #48 It can be a steep slope to climb, building a business…
- #49 If you look closely you can see a guy who got off the wall and decided to walk back down – that’s rarely an option for us ! And we know the really successful entrepreneurs have the passion and persistence it takes to go the distance.
- #50 One of the key things we need from the Financial plan is the cash forecast to determine how much you need to raise. Here the key is to figure out what you need to get the company through some key milestones, and to a place where it makes sense to raise your next round, if necessary. And if you raise that next round you’ll want to do it at a higher valuation based on the milestones you've hit. At North Bridge we typically finance about 18 months at a time, because from experience we’ve learned that’s often a good chunk of time to allow the team to get focused on things like building and validating a product. And beyond that we all find it hard to predict too far out.
- #51 I took this picture of a boy we met along the walk I was talking. I always feel the best way to experience a new place is to meet the people. I purposely took along a translator to find a way to do this, and met many interesting locals on my day out. I was particularly enchanted by the way this boy was surveying the landscape around him, framing it with his hands as if to take a photograph in his mind’s eye. It reminded me that everyone sees things from their own perspective and it’s important to try to get aligned with that perspective when reviewing people’s vision. Similarly for us as venture investors, it’s always all about people.
- #52 So first, if you haven’t already had the chance to introduce yourselves on the way into the room or in prior meetings, get the Team slide up as soon as possible. We invest in people first and foremost and we want to know who you are right up front, so we have context for where you are coming from. Founders and Management might be one and the same, but we distinguish between entrepreneurs and functional managers
- #53 Summarize with what you’ve covered in your agenda and explain why this a great investment. If you’ve done this right, as VCs we should be thinking how can we invest in this? EG… It’s such a uniquely qualified team going after such a game changing opportunity with such clarity of how to lead with a compelling value proposition. And the business model make such good sense we can’t fail to make money together!
- #55 Check in with your audience and see if they got what they needed – and thank them for their time. Then agree next steps.
- #66 This needs to be a simple statement, summarizing what you do uniquely well for whom and how. Keep it short and sweet, to provide context and orientate your audience to what is about to follow. Get your audience wanting to learn more.
- #67 This needs to be a simple statement, summarizing what you do uniquely well for whom and how. Keep it short and sweet, to provide context and orientate your audience to what is about to follow. Get your audience wanting to learn more.
- #69 Get the VC hooked and wanting to learn more.
- #71 This needs to be a simple statement, summarizing what you do uniquely well for whom and how. Keep it short and sweet, to provide context and orientate your audience to what is about to follow. Get your audience wanting to learn more.
- #72 This needs to be a simple statement, summarizing what you do uniquely well for whom and how. Keep it short and sweet, to provide context and orientate your audience to what is about to follow. Get your audience wanting to learn more.
- #76 Gain / Pain ratio? If like me you believe you can’t manage what you can’t measure, then you might find the following concept useful. It’s a ratio, designed to test the validity of value proposition and ultimately your proof points.
- #77 Gain / Pain ratio? If like me you believe you can’t manage what you can’t measure, then you might find the following concept useful. It’s a ratio, designed to test the validity of value proposition and ultimately your proof points.
- #79 Ultimately no matter what you claim, examples and case studies that proved from your customer’s viewpoint what you can deliver, are more credible than anything else. So if you have that proof try to explain the tangible benefits the customers are enjoying from your solution. And try to explain in terms of ROI and payback period. As investors these mean more to us than random superlatives. But for you as an entrepreneur they should also help you in the pitch to your customers. To state the obvious if you can walk in with a solution that takes just a few days to show results and thereafter provides a clear ROI, it will be much more successful than an offering that takes months to implement years to show a return and is not measurable in dollars and cents For extra credit articulate in these proof points how from your own viewpoint the solution was both easily and repeatedly sold and therefore represents a scalable business for you. This will help you lead up to your business model and how you will make money from it later in the presentation.
- #83 The Great Wall is often compared to a huge dragon winding up and down in the mountains, grassland and deserts. So what was the Business model on the Great Wall? Well there were certainly plenty of vendors selling drinks and snacks Some didn’t make the products, they just distributed them, where others were clearly home made. ALL had a markup! It turns out that the wall became a basis for trade So to stretch the point… is the business model simply tourism, what does that bring to China in revenue, goodwill and the like and how does that compare to the costs of supporting rebuilding of the wall?
- #88 My video from the walk along the wall.
- #91 Show clarity of milestones and thinking around how to achieve what is in your control Recognize the need for humility in regard to what you can’t control = often the market and timing It turns out that most entrepreneurs are over optimistic – thinking along the blue line Of course if you came in and pitched the black, boring line, you will not likely attract funding. And if that’s what you really think your business will do it may not be appropriate for VC funding anyway. Whereas most businesses take longer to take off than people think and if they are successful can exceed expectations. See the red line. In the end no one can really predict all this, but it helps if you can be a “realistic optimist” and plan somewhere in between and adjust along the way – eg the green line.
- #93 This should lead you up to describing your vision, for how the market will evolve and how you plan to lead it. Vision is very important to us, because you will usually be looking at markets that will emerge over many years. And because it will be important to be early into a market to lead the it, we look for entrepreneurs who have the vision to see how it will unfold into a big opportunity down the road. What are the possibilities opened up by your vision?
- #94 Market sizing helps quantify the total available market for your project and is best done both top-down and bottom-up. Top-down analyses are usually available from analysts like IDC and Gartner, and while there directionally helpful, they rarely predict the true nature of the market you will specifically be addressing. That’s why bottoms up analyses are often more important. They can be as simple as defining the average deal size for your product and clarifying the target segment and size of that segment, and multiplying the two. But what we’re really looking for as VCs is people who understand their market in a very granular way, right down to the persona of the buyer, and where that is distinct, the user of the product or service. Really good analyses will therefore involve careful segmentation of the true addressable market and thoughtful descriptions of how those customers will pay for the solution over time to build up a picture of a realistic market size.
- #95 For me at this point in my walk the gain/pain was in the balance. I had just climbed up these steps, which the photograph barely shows the true incline of, and turned around to see that I had still a few miles to go before the agreed rendezvous with our driver.
- #97 People often don’t include the 3rd point around customer urgency. You could say it’s optional, but in uncertain economic times, the default option for any customer is to do nothing. It’s incumbent on you to make sure that your solution, is considered at the top of the list of other potential projects or priorities, as many vendors will no doubt be vying for dollars from your potential customer. And remember that as a startup, you will usually be seeking funds from an existing budget, so you’re actually displacing planned spending priorities. Hence understanding customer urgency is very important.
- #104 So first, if you haven’t already had the chance to introduce yourselves on the way into the room or in prior meetings, get the Team slide up as soon as possible. We invest in people first and foremost and we want to know who you are right up front, so we have context for where you are coming from. Founders and Management might be one and the same, but we distinguish between entrepreneurs and functional managers
- #105 Light at the end of the tunnel = or in this case sun rising out of the clouds
- #106 People often don’t include the 3rd point around customer urgency. You could say it’s optional, but in uncertain economic times, the default option for any customer is to do nothing. It’s incumbent on you to make sure that your solution, is considered at the top of the list of other potential projects or priorities, as many vendors will no doubt be vying for dollars from your potential customer. And remember that as a startup, you will usually be seeking funds from an existing budget, so you’re actually displacing planned spending priorities. Hence understanding customer urgency is very important.
- #107 A business model describes the rationale of how and organization creates, delivers and harness value Again this is potentially a whole subject unto itself, but you should at least cover the basics of how you create, deliver and harness value. For example in a software company you should cover how you develop your product, sell, install and support it, and how you package and price it, and what channels you may sell it through.
- #108 Only when the sun came up could I really begin to see the extent of the wall stretching into the distance.