How to Create an Enchanting Pitch #OfficeandGuyK

Welcome to the first in a series of blog posts Ill be doing as part of a partnership with Microsoft and Office
Web Apps. Over the next two weeks, Ill cover everything a budding entrepreneur needs to turn an idea
into an enchanting investment opportunityfrom the perfect pitch to a killer business plan to financial
forecasts.

Im going to start with a little dissertation on creating effective PowerPoint pitches for your company. I
embedded the sample deck for you to click through by using the PowerPoint Web App. When youre ready
to get started, you can download the deck from my public SkyDrive folder and use it as the starting point
for your own perfect pitch. Enjoy!

To cut to the chase, there are two extremes in online dating: eHarmony and Hot Or Not. When you use the
former, you provide the data along twenty-nine dimensions to find your soul mate. When you use the
latter, you look at a picture and decide if the person is hot or not in a few seconds.

When it comes to PowerPoint pitches for your company, think Hot Or Not, not eHarmony.

End. Of. Discussion.

This post and PowerPoint outline will enable you to succeed in the real world of presentations to potential
investors. Mind you, very few investors will tell you what youre about to readthats because its much
easier to smile and say, Thats interesting than to tell you the truth. First, some background information
for you:

You do not present in a vacuum. There were pitches before you. There will be pitches after you. (Just
like there are pictures of people looking for dates before and after you.) You need to look hot in a
river of bright, shiny objects.
The scintillating adjectives that you think apply to your business are tired and worn outpatent-
pending, revolutionary, innovative, scalable. Been there, heard that. Four times. Today. Just
like people who describe themselves as bright, outgoing, and warm on dating sites.
Think of two airplanes: 747 and F18. A 747 lumbers down the runway and takes one to two miles to
get off the ground. A F18 catapults off an aircraft carrier and reaches 165 mph in two seconds on a
270-foot deckor falls into the ocean. Guess which plane youre in when you are making a pitch.
The best-case outcome of pitch is not a request for wiring instructions. There is a much more
modest goal: rising above the noise and avoiding elimination. You want to live another day and get
to the next stage: due diligence.

Download the full PowerPoint here.

Slide #1: Title page. This slide should be visible as people walk into the room. Its purpose is to orient
people so that they know who you are. From the start, you need to look more professional than you are, so
spend a few bucks on a decent logo. Include your contact information on this slideGod forbid that an
investor is interested in your company and has to search for how to get in touch.

Slide #2. Overview. This slide is the so-called elevator pitchthirty seconds to explain what you do in a
clear, if not wow, manner. For example, Manufacture solar panels that are 2 x as efficient at 1/10th the
cost. In many pitches, fifteen minutes goes by, and I still dont know what the company does. But I have
heard that you are a proven team with a proven technology in a proven market.

Heres a power tip for wowing people: Tell your audience (if its true) that youre already doing
$100,000/month, youre adding 1,000 users a day, or youre in beta tests with five Fortune 500
companies. In other words, you have proof that the dogs are eating the food. The longer you can bootstrap
without raising money, the more powerful your pitch.

Slide #3. Problem/Opportunity. The purpose of this slide is to cause your audience to salivate when they
hear about either the pain that you relieve or the opportunity that you enable people to tap. Note: this is
about your customers pain or opportunity, not yours. Your opportunity is a derivative of what you do for
your customers.
Rookie entrepreneurs cite a bull shiitake study from a market-research firm that proves that the
opportunity is big. Something along these lines: according to Jupiter Research, there are 300 million
Americans, one in four owns a dog, therefore there are 75 million dogs, each dog eats two cans of dog food
per day, therefore there is a 150 million can per day total addressable markethow hard can it be to sell
1% or 1.5 million cans per day?

Make this slide work by either addressing a problem/opportunity that is intuitively obvious (for example,
people who want to listen to music) or, if the market size isnt obvious, discussing a case study or
scenario (for example, the person who runs social media for Virgin America needs to monitor Twitter,
Facebook, LinkedIn, and now Google Plus). The goal is to enable the audience to fantasize about how
great the market is, not for you to prove it using high-order mathematics.

Slide 4: Unfair Advantage. By now, the mouths of your audience should be watering because they
understand what you do, theyre wowed by the potential, and now they need to start to believe that you
can take advantage of this green and fertile pasture. They want to know, Why you? What is your
competitive advantage? Why is the field tilted in your direction?

Stuff that wont work: We really believe in what were doing. As opposed to the five other teams that the
audience met today that dont believe in what theyre doing? We have a patent. So you have years of time
and millions of dollars to litigate? We have the first mover advantage. There are probably ten other
teams as far along as you are, pitching just up the street. We are smart and work hard. Unlike that other
five teams the audience met today? Get real: this isnt elementary school where trying hard is enough to
get by.

Stuff that will work: You were the vice president of sales for CNN, so you know all the buyers of the major
brands. You ran industrial design for Apple. You have a PhD in materials science from Stanford. You
implemented social media for Starbucks. Your audience wants to believejust give them a rational reason
to do so that is beyond were hardworking folks who really believe in what we are doing.

What if you didnt work for Yahoo, Apple, or Starbucks, or you dont have a PhD (or any degree) from
Stanford? Then you do what all great entrepreneurs are good at: take your best and brief shot with
competitive advantages, admit that you dont have a perfect, world-class team to deflect objections, and
move quickly to a demo that makes heads explode.

Slide 5: Demo. This really isnt a slide. Its where you dive into a demo that lasts approximately ten
minutes. What if your product isnt at a stage to do a demo? Then you are pitching too early, and youre
wasting peoples time. Of course some technologies are easier to demo than others. If you have a novel
architecture for a nuclear reactor, you are probably going to be limited to compelling graphics.
There are three questions that you can answer in a demo: what, how, and why. Dont waste time on why.
You should have answered this already with your Overview and Problem/Opportunity slides.

You need to focus on what and how. Whether you emphasize what versus how depends on your
product. Generally, if you do something thats never (or seldom) been done before, then focus on what.
If you do something that has been done before, but you do it much easier, faster, or cheaper, then focus on
how

Slide 6: Sales and Marketing. Lets say that people are salivating so much after your demo that theyre
choking on their spit. Now you have to answer the question, In a world of TVs, telephones, websites,
blogs, social media, and smartphones, how are you going to roll out your product and make a dent in the
universe?

Again, investors want to believeyou just have to give them something believable. Whats not believable?
Well use viral marketing. Viral marketing isnt a strategyits at best a goal, not a means to a goal. And
the single greatest determinant of viral marketing is luck, so saying that your strategy is viral marketing is
the equivalent of saying that your strategy is to get lucky.

What is believable? Your established contacts with the buyers of large companiesthat is, circling back to
the Unfair Advantages slide. Investors love it when they hear that you have already lined up brand name,
referenceable customers or partners. Other believable means: an email database that your founders have
compiled throughout their careers, a successful pitch to SXSW for a panel, 50,000 Twitter followers, and
50,000 Google Plus followers.

What if you have none of these? Thats why they are called unfair advantages. Lifes toughyou just have
to be willing to grind results out. If everyone had them, the field was level, and everyone was created
equal, then they would be called fair advantages, which is an oxymoron.

Slide 7: Competition. Most entrepreneurs put up a slide that says that there is no competition or that the
competition is feeble. The problem with the former is that that lack of competition indicates that you are
either addressing a market that doesnt exist or you dont know how to search the internet.

The problem with the latter is that the competition probably isnt feeble if youre going after a meaningful
market. And your competitions competition slide probably says youre feeble, but I digress.

You want competition. It shows, though it doesnt necessarily prove, that the market is attractive. Your
task with this slide is to show how and why you can beat the competitionthat is, what you can do that it
cant. You also want to provide information about your weaknesses vis--vis the competitions. There are
three reasons to do this.
First, it shows that you know how to use the internet, and youve done your research about the capabilities
of the competition. Second, it shows that youre intellectually honestor at least not delusional. Third, if
you tell people what you cannot do, theyll believe you when you tell them what you can do.

Slide 8: Business Model. Investors are not your friends or your soul mates, so they want to know how
youll make moneyand therefore how youll make them money. The key to this slide is simplicity: show
that you rely on simple, proven business models, not a new technique that has never been done before.
These kinds of business models include sales, licensing, advertising, sponsorship, affiliate fees, digital
bling, and upgrades to additional features and services.

Pick one or two and stick with them until you need to try another one or two. Many entrepreneurs throw
up (in more ways than one) multiple models because they think several revenue streams will make
investors believe that the company is more attractive. However, its far better to have one business model
that prints money than several that dont.

In fact, you could purposely exclude an obvious additional revenue stream. Then when an investor has an
aha! moment and shows off his brilliant business strategy mind by mentioning it, you could flatter him by
adding it to your plans and exclaim, Wow, this is why we need a seasoned investor like you. Then,
theoretically, the brilliant investor has a psychic investment in your success.

Slide 9: Forecast. I hate this slide because everyone knows that youve made up numbers that are big
enough to interest people but small enough to prevent them from laughing out loud. (I see a pitch a week
that conservatively forecasts the fastest sales ramp up in the history of man.)

Alas, you need to include this slide to communicate the rationale behind your fabrications. My advice is
that you make your first year sales $0 because your product will be a year late and make your fifth year
sales $75-$100 million if you want to raise venture capital. (History has shown that your actual results will
be 10% of your most conservative forecast.)

You should concentrate on the reasonableness of the assumptions behind your business model and
forecast. Business models vary, but think along these lines: Are you going to do more business than Apple,
Amazon, and Cisco achieved in their first five years? Because the likelihood of this is smaller than the odds
that Ill play in the NHL.

Do you need roughly the population of India to make your model work? Are you assuming advertising
CPMs that are 20x typical advertising rates? Do you predict that more than .5% of the people who see your
ads click on them? Do you require more than 1% conversion rate from free to paid use of your service?

The first two rows of the forecast are windows into the soul of your company because it reveals how many
customers and employees you need. If you need an ungodly high number of customers to make your sales
numbers, youll discourage investors. If you need an unrealistically low number of customers, investors
will think youre clueless.

Ditto for employees: if you need a lot, something is wrongor maybe your business isnt scalable. If you
hardly need any, then investors, again, will think youre clueless. It is a wicked web that you must weave to
make investors truly believe.

Slide 10: Team. This the infamous team slide. You may wonder why its not earlier in the pitch. After all,
youve heard and read that investors invest in teams, not simply products, services, or markets. The
problem is that at the point of investment, its hard to truly know that a team is good. If this was
possible, then investors would only back good teams, and every investment would pan out.

The fact is that your team isnt proven or completethis is why youre raising money. If you were Steve
Jobs, John Chambers, Steve Case, Larry Ellison, Howard Schultz, Jeff Bezos, or Bill Gates, you (a)
wouldnt need outside money and (b) you could simply make one or two phone calls to get it. You certainly
wouldnt be reading about how to make a good PowerPoint pitch.

The most likely case is that you can show that your backgrounds are relevant to the market that youre
serving and the technology thats necessary to build. For example, its a stretch to think that a bunch of
friends from Home Depot are going to find the cure for cancer. But it is believable that they could create a
DIY advice site sponsored by Home Depot with ads from Orchard Supply with a freemium model that
requires membership to receive answers to questions.

Dont let this depress you. The people who founded the great tech successesApple, Microsoft, Facebook,
Cisco, YouTube, and so onwere hardly proven entrepreneurs. In fact, you could make the case that these
companies represent unproven teams in unproven markets with unproven technology. In other words,
they were zero for three according to what professional investors say they are looking for.

This is why the Demo slide is earlier in the presentation than the Team slide. A mind-blowing demo makes
up for a lot of shortcomings and objections. Id rather see a great demo than a great presentation. Ideally,
youll have both.

Slide 11: Status and Milestones. The purpose of this slide is to tie a bow on the present. You recap where
you are in terms of delivery of your product or service, how customers are reacting to it and what the next
major milestones are. A word about milestones: these are events that are so big that youd call your spouse
up to tell him/her that it occurred. For example, printed stationary isnt a milestone. A milestone is an
event such as shipping, first sale to a customer, website launch, or profitability.
Conclusion

What happens next? The best case is that the investors start due diligencethat is, checking your
references, talking to the customers that you said loved what youre doing, and investigating the current
state of your market. All you want at this point is to get on the investors short list of deals he or she
wants to follow up on.

However, believe it or not, its hard to tell when you are turned down. For this reason, I will translate
investor speak for you. When the investor says, Come back when you have a lead investor, Come back
when youve built out your team, or Come back when you have some sales traction, it means that shes
saying, No. When the investor says, Lets start due diligence, it means maybe.

So now you have it: all you need to know to make an enchanting presentation to potential investors.

One last word: most companies have the same general challenges to overcome, and this guide is intended
to cover those. But each company has its own unique combination of challenges that represent the critical
priorities of that company. For an electronic medical records company the key issues are different than for
a mobile game company.

Make sure that you put the emphasis on the most important issues for your company, rather than giving
equal weight to everything. One of the most important assessments investors will make about you is
whether or not you really understand your business and whether or not you know how to prioritize. You
dont want to look like someone who is just filling out a template.

With that in mind, download my PowerPoint template to get started right away. Onward and upward!

Promotional consideration paid by Microsoft.