Three is a Magic Number
Three lessons from what didn't and did work.
Once Upon a Pitch Problem #19
Three solutions to three different problems from three different founders.
Kawasaki 10/20/30 is still #winning. Guy Kawasaki published his rules for startup deck building over twenty years ago: 10 slides, 20 minute meeting, and 30 size font. Everyone can have as many opinions of what they believe works for pitch decks but at the end of the day, the best crafted, well thought out, compelling business pitches fall pretty close in line with Kawasaki’s 10/20/30 rule. Forcing your pitch into these limitations levels up your story; constraint forces discipline and discipline forces focus. What didn’t work for this founder? A very expensive marketing agency built 32 page deck that was an explosion of colors, miniature fonts, unrelated images, and videos that often failed to play. The only clear message conveyed was that the founder was fatally disorganized and not investment worthy. What did work for this founder? A large black font, white only slides, 12 page deck with a few static mocked up product images, following the basic deck formula (problem, solution, customer/GTM, addressable market/competition, team, commercial/financials milestones with the ask). In response to my sending a congratulations email to the founder upon reading that the company had closed a Seed Round, the founder responded that the lead investor said her deck was “. . . the most confident intro deck his team had seen in years.”
“Once upon a time . . ..” Technical founders tend to approach communications as a problem to be solved through the brute force application of their intellect and then blame the audience for not being smart or sophisticated enough to understand the idea. If a story does not convey its moral to the audience, it is 100% the storyteller’s problem, never the audience’s problem. What didn’t work for this founder? Being right. This founder consistently overwhelmed the audience with technical speak, chirped immature criticisms of other inventors and companies, omitted the customer problem to show-off his genius idea with no commercial context, and generally, made the audience feel dumb. What worked for this founder? Humility. After being dealt a crushing blow from a technically savvy early-stage fund passing on investing in his idea, he went back to his pitch and suddenly, like runes magically decoding into the hero’s alphabet in a fantasy movie, he saw all the fatal problems with his approach. He took up practicing the pitch with his kids’ 8th and 10th Grade friends, much to the horror of his children. He also repeated a sports visualization style mantra to temper and focus his “arrogance” (his words) before every pitch: “My job is to help everyone to join my story.” By remembering to start at the beginning of the story and then inform and lead the audience through the basics of the problem and the solution, the founder was able to keep conversations going longer, get his audience involved in the idea, and engage in better technical questions as asked by the genuinely curious audience. He called to tell me he received a cold call from a potential new investor and that caller said to him, “I am calling because [confidential name] said he heard your pitch and that I needed to hear it.”
Reality. The financial slide is always hard. Even publicly traded companies with armies of internal and external financial people do not get their future projections right. As Tim Cooley puts it perfectly in The Pitch Deck Book: “No one believes what you put on this slide, at all. But this slide is critical to the success of your presentation and your ability to show you know how to do math. Business is about numbers. If you cannot present your numbers so it makes financial sense, no one will believe any of the other things you have said.” What didn’t work for this founder? A suicidal pre-seed investment ask of $45,000,000 to build the commercial system before proving product-market match. What worked for this founder? Getting out of his own way. Perpetually pitching and remaining unfunded, the founder eventually licensed the idea to an operator-manufacturer who was able to build a demo prototype to perform in simulation, then secure signed LOIs from customers agreeing to buy services if the final system performed like the simulation, and now armed with customer validation, raise $17,000,000 for the next milestone. In the words of this founder, from an email, “I still dislike the plan. Yes, [the system] will be built but so much slower and inefficient than my plan. But what can I say? I raised nothing and now, we have money.”
What They Said
The most important thing for leaders to be willing to do in those early days - and leaders generally includes everyone in the company, not just the founders or executives - is to pick a strategy and run with it. Cultivate decisiveness in the face of a massive number of options. You have a problem? Figure out a solution and fix it. That solution doesn’t work? Try something else. You don’t need to find the perfect solution; you need to find something that will get you through to the next milestone, whether that milestone is the next release, the next growth spurt, the next funding round, or the next hire. - Camille Fournier, The Manager’s Path: A Guide for Tech Leaders Navigating Growth & Change, page 183.
See You on the Track
Author The First Principles Pitch, startup storyteller, board member, advisor and investor. Once Upon a Pitch is a weekly newsletter looking at one business pitch problem and offering storytelling solutions to help solve that problem.
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