Recently in Presenting Your Company Category
I was having breakfast this morning with Salil Deshpande from Bay Partners. Salil and I were talking about assessing company progress and how best to measure that progress. Salil invests in super early-stage deals and has his companies report to him on their progress on a frequent basis. He said that he had one CEO who would report on his progress in such florid language that eventually Salil had to forbid his use of adjectives in his progress reports. Salil said that he didn't want to hear that things were going great. He wanted to hear precisely how things were going.
I nearly jumped out of my seat. Salil had articulated one of my biggest pet peeves when it comes to company pitches (and board meetings for that matter). I hate adjectives. I don't want to hear that one of the company founders is a "fantastic sales exec." I want to hear that she was Presidents Club the last twelve years running. I don't want to hear that the product is "revolutionary and paradigm-shifting." I want to hear about the specific features of the product that are differentiated and how. I don't want to hear that the company has "massive market traction." I want to see a graph of progressive quarterly sales and a giant sales pipeline.
Adjectives are not convincing. Facts are convincing. I may not agree with the conclusions a company draws from those facts. But I will at least be in a position to appropriately assess those conclusions. Whereas adjectives are all about conclusions without the underlying facts. As an entrepreneur, you are far better off having me determine that your market is "massive," your founders are "brilliant," and your product is "elegant," than to tell me that your company has "an elegant solution serving a massive market designed by brilliant founders." So reread your pitch and remove all of the adjectives. It will go massively, monumentally, gargantuanly. colossally better that way.
When I first started writing VentureBlog, I used to talk a lot about entrepreneurship. At the time, not a lot had been written about pitching VCs or the Venture Capital process, so there was lots of virgin territory. Since that time, dozens of VCs have started blogging and much has been said about what it takes to get a VC down the isle. Bits and pieces here and there -- a good Google archeologist can pull it all together. But having spent the week pontificating about PowerPoint and the likes, I've decided to take one more swing through the basics of pitching a VC.
As I thought about the process of pitching a business, it struck me that no matter what the stage, the information was essentially the same. A good elevator pitch contains the same content as a good executive summary contains the same content as a good PowerPoint contains the same content as a good business plan. The distinction among these business descriptions is not the substance, it is the degree to which the essential elements are fleshed out. Each document contains slightly more detail than the preceding.
Elevator Pitch --> Executive Summary --> PowerPoint --> Business Plan
This makes good intuitive sense. There is no reason that the things that are most compelling about your business would change based upon the nature of the business description. Nor would an investor be interested in different things by virtue of the form that description takes.
What, then, are the essential elements that make up a good PowerPoint, a persuasive elevator pitch, a compelling executive summary? I have no doubt that VCs will differ somewhat on the precise list, as well as the order and the emphasis. But at its core, I believe that a successful business description should include the following elements:
1. Introduction
2. Team
3. Product
4. Market
5. Business Model
6. Competition
7. Financials
8. Conclusion
If you are pitching a VC, start with these 8 slides. If you are writing an executive summary, start with these 8 headings.
Obviously some businesses will require additional information that is outside the scope of these basics. I am not suggesting for a second that you should always pigeonhole your business into these categories alone. But they are a great starting point from which to build a persuasive description of your business.
I was recently reading some old posts on Venture Blog and couldn't believe how short they were. One might call them pithy. Or one might also call them lazy. Either way, they were short. I should really try that again.
I have been teaching a class at Harvard Law School this winter semester called Venture Capital and the Technology Start-up with John Palfrey, the Executive Director of the Berkman Center. It is really fun to be back at the law school and working with John. I have been blown away by the energy that the law students are bringing to the topic of Entrepreneurship and Venture Capital. Sadly, I never had a VC or Entrepreneurship class in law school. Lets see, I had torts, contracts, criminal law, federal courts, administrative law, property, intellectual property, corporations, securities regulation, constitutional law . . . but no entrepreneurship. Then again, I don't know that I would have had the sense to actually take a VC or Entrepreneurship class back then. So its presence would have been wasted on me.
Today my students had to actually pitch business ideas to real live VCs from the Boston area. And they did a great job. As I was discussing with them how to think about company building and pitching, it struck me that much like the law, building great companies is all about applying precedent. Only, instead of the applicable precedent being case law in this instance, the applicable precedent is a business case. Pitching your business is all about finding the right business analogs and describing how they apply to the company you're building (e.g., "we're the Amazon.com of funeral supplies."). That isn't so different from finding the right case analogs and describing how they apply to the lawsuit you're defending. So there may be hope that we lawyers are able to figure out this entrepreneurship stuff yet.
I spent today at the Web 2.0 Expo and am just stunned at the scale and scope of the event. Let me make one observation to start -- the venue of an event really makes a difference. It sets the tone of the event and sets the stage for the sorts of interactions you are likely to have. So the mere fact that the Web 2.0 Expo is at the Moscone Center says a lot. There are conference center events (Expo, SXSW), there are big hotel events (Etech, Demo), there are fancy hotel events (D: All Things Digital), and there are theater events (TED, Poptech). Each one has a different feel. No one is inherently good or bad. It simply sets the expectations for the conference that is to follow. As you can imagine that there is a different vibe in a fancy hotel conference than in a conference center event.
I took part in a panel today called "Venture Capital 2.0: Bright Future or Broken Forever." It was moderated by Mike Arrington and included some good friends from the investment biz, including Josh Kopelman and Jeff Clavier. It was one of the larger audiences I've spoken in front of before -- I'm guessing there were as many as 800 people in the room. Crazy. Mike tried hard to get the traditional VCs (me included) to fight with the angel guys (Josh and Jeff). His thesis was that angel investors will ultimately get all of the returns because there is so little money required to build a big internet business these days. While it isn't an unreasonable assertion, I obviously disagree whole heartedly. As I've said before, while it is certainly the case that it takes less money for a web startup to demonstrate traction, I believe it still takes significant capital for a successful internet startup to scale. Nonetheless, the entertainment value was high (which was likely Mike's real intention). And we had a great time agreeing with each other and disagreeing with Mike.
Speaking of entertaining, Mike took some time out of our panel to shamelessly plug his new conference, the TechCruch20. The idea behind the conference is to gather some of the most interesting new startups and products, and have them critiqued by a group of smart, entertaining and often-times controversial tech experts. He's already lined up Marc Andreessen, Chris Anderson (Wired Magazine), Mark Cuban, Dave Winer, and, of course, himself and Jason Calacanis (with whom he is organizing the event). The TechCrunch20 is going to take place at the Palace Hotel in San Francisco on September 17th and 18th. I have no doubt that it will be a really entertaining event and look forward to attending. If you're interested in attending as well, I strongly recommend you register sooner rather than later because the conference is already well on its way to sold out (here's a LINK to the official TechCrunch20 website).
I want to be an evangelist. That seems like a great job. Your job description goes something like "run around and talk about what great stuff you do." Sometimes you get to evangelize to big companies. Sometimes you get to evangelize to startups. And lots of the time, like me, you find yourself on the conference circuit, where there is critical mass of people to be evangelized.
Why this focus on evangelism? I was just looking at the list of panelists for the Under The Radar: Office 2.0 conference coming up next Friday and the first panelist listed is "Jeff Barr, Evangelist, Amazon Web Services." Jeff is a great guy -- needless to say, I've bumped into him at conferences. I similarly first got to know Robert Scoble on the conference circuit when he was still a tech evangelist and pontificating for a living. (But that's a big company thing. Now that he's at PodTech, he has to do some work for a living.) Perhaps the best known evangelist was Apple's Mac Evangelist, Guy Kawasaki. Now, best I can tell, Guy is an evangelist for Guy. But he's damn good at it.
In any event, if you are interested in meeting Jeff Barr and learning more about what's happening in the business services space, I would highly recommend attending Office 2.0. Great companies like Stikkit, Teqlo and Mashery will be presenting, as will some returning standouts like EchoSign and iUpload. Increasingly, independent web services are finding their way into small and large enterprises alike. This is clearly a trend that is going to accelerate over time. Office 2.0 is a great opportunity to hear three dozen companies talk about how they are attacking this space. If anyone is interested in attending, register HERE and save some money.
In the mean time, if anyone is looking for an evangelist, I've got the attending conferences part down.
In his first post on a new blog called "Ask The Wizard," Dick Costolo rightfully notes that there a whole bunch of VC blogs discussing the entrepreneurial process from the investor perspective. But there aren't that many blogs discussing company building from the entrepreneur's standpoint. Dick intends to fix that. Ok, he doesn't intend to single-handedly fix the lack entrepreneur blogs. But he has decided to start writing about entrepreneurship. That is great news for entrepreneurs.
Dick is the co-founder and CEO of FeedBurner. Before that he was the co-founder and CEO of a company called SpyOnIt, which he and his co-founders (the same gang building FeedBurner) sold to 724 Solutions. He is not only the prototypical "serial entrepreneur," he is really smart, really funny and can really write. In a few short weeks of blogging about company building, Dick has already written about fund raising, pitching your business, outside board members, non-founder equity, types of investors, resources for entrepreneurs, the hard work, strategic advantages, company culture, and attacking markets. That's a whole lot of great information since February. I look forward to reading more from Dick in the weeks and months to come.
Have you tried NetVibes yet? If not, you should. It is a really powerful, flexible service that allows you to control the way you experience the web. It is the poster child for RSS feeds and web services and open architectures. And it is the poster child for viral marketing. it has become a large, global service through the power of word of mouth with virtually no marketing dollars spent. Never was that word of mouth stronger than at the Le Web conference. It was the sweetheart of the show. The name "NetVibes" was intoned dozens, if not hundreds of times throughout the conference. Speakers pointed to NetVibes as evidence that Europe could compete in a global market and they pointed to Tariq Krim, NetVibe's founder, as evidence that European entrepreneurs had the drive, smarts and savvy of their counterparts in Silicon Valley. I had the good fortune of spending some time chatting with Tariq at Le Web (and at Web 2.0 before that) and I will certainly second that. He is not only smart and accomplished but a really charming guy. I have no doubt that Tariq's magnetism has had a lot to do with NetVibes' great success at spreading the good word.
Speaking of spreading the good word, I have another superhero to add to the online marketing pantheon. His name is Jonathan Coulton and he is my favorite new musician in years. I love Jonathan's music. If you haven't heard Code Monkey yet, stop reading right now and CLICK HERE (Michael Sippey gave me a hard time last time I wrote "CLICK HERE" in all caps -- he suggested that I had been seduced by the likes of Ronco and Guthy Renker -- to Michael I say, CLICK HERE -- $1.3 Billion!). But the chances are you have heard Code Monkey already. Not just because it is a fantastic song. But because Jonathan has used the Internet to its fullest to spread the word about, well, Jonathan. Code Monkey is licensed under a Creative Commons license and he has encouraged fans to create their own music videos, use it to back slideshows, find inspiration for their artwork (all of which Jonathan blogs about when he learns of someone's take of his music), and now Jonathan himself is holding a remix competition in which he has released the source files for Code Monkey and is encouraging people to make their own versions of the song.
Not surprisingly, Jonathan's website isn't a static website, it's a blog and he is an active writer, engaging his audience to be part of the conversation and part of the show. He writes from home. He writes from the road. He's funny and smart. And, of course, he has a podcast. For a year he wrote a "Thing a Week" -- a new song every week for 52 weeks -- which, while it sounds like it nearly killed him, resulted in some amazingly great songs, all of which he shared on his weekly podcast. On top of all that, rather than discourage the taping of his shows, Jonathan frequently points to videos of his performances that have been posted on YouTube and the like. The result of Jonathan embracing new media to its fullest has been a whole lot of great publicity from all corners of the web (now even VentureBlog) and beyond. My hat's off to Jonathan for schooling the labels in how to do marketing in this post-Napster era. I have no doubt that it will lead to great success for him and we can all learn from what Jonathan has been able to accomplish with a bunch of hard work, a pile of talent and a broadband connection.
Update: I got an email the other day from Brian Dear, the founder of Eventful. Brian is also a Jonathan Coulton fan and wanted to point out that Eventful is yet another Web 2.0 marketing channel that Jonathan has embraced. You can not only use Eventful to track when Jonathan is coming to your town. You can also use Eventful Demand to request that he come to a theater near you. If enough people "demand" a Jonathan Coulton show in their city, he'll hop on a plane, train, automobile to play for you and the hordes of other voracious fans in your neighborhood. I joined the Demand for a Jonathan Coulton show in the Bay Area and my wish has been granted. Hope to see some of you at the JC show at Cafe du Nord on Sunday, February 18th.
I can't decide what is making it harder for me to write this morning. Is it the fact that I am still completely exhausted after a weekend of too little sleep and too much mental stimulation? Or is it the more mundane fact that God-awful music is blasting out of my speakerphone courtesy of the now 57 minutes I've been on hold with Bank of America credit card services? I'm going to go with mental overload because I refuse to cede the power to communicate to B of A musak.
This weekend I was privileged to attend Tim O'Reilly's FOO Camp. FOO stands for "Friends Of O'Reilly" but the crowd is only a small subsection of those who count Tim as a friend. Tim has long been not just a uncanny predictor of future technology trends but a supporter and promoter of both those technologies and the individuals responsible for inventing them and shepherding them from concept to phenomenon. The individuals present at this year's FOO Camp had played significant rolls in the creation and dissemination of some of the most important technologies over the past decades (from Lotus 1-2-3 to Perl, Python, Ruby, Flash, you name it). But the conversations of FOO Camp were clearly pointed at the future, which leaves one's mind spinning.
One of the things that is striking about FOO Camp is that nearly everything that takes place over the weekend is collaborative. Talks are rarely lectures -- they are conversations. Ad hoc projects at FOO take interesting twists and turns because they are necessarily interdisciplinary, driven by experts in hardware, software, networking, who are encouraged by the environment to think out of the box (a child of FOO's inventive environment was unveiled at this year's gathering -- Chumby is an open source hardware and software platform that truly embodies the collaborative and interdisciplinary nature of FOO). As I wandered around O'Reilly's campus Saturday night I was struck by the incredibly inclusive, social and creative energy everywhere -- in one room a group of folks were singing and strumming Simon and Garfunkel tunes, in another a crowd was engaged in their 5th or 6th hour of Werewolf, on the patio a few pyromaniacs enjoyed a fire sculpture involving propane and a zen sand garden, others gathered 'round the laser in Make Magazine's office engraving their laptops and cell phones with various a sundry images and insignia.
Two of my favorite sessions during FOO Camp were further testimony to the collaborative nature of the weekend. One of the "talks" was entitled "Halfbaked.com: entrepreneurial improv theatre." It was organized by Dave McClure, Paul Rademacher and James Levine, who had the great idea of randomly assigning teams of participants two word company names and, with fifteen minutes of preparation time, having them then present their business plans to a panel of VC judges (namely, me and Paul Graham). The results were clever and funny and felt sufficiently close to my day job as to be a little disconcerting. The winning team pitched Bottlecap Porn, fully functional (if somewhat under-featured) website and all. The other session I can't stop talking about was called "That Sucked," which was organized by Joshua Schachter. In Joshua's session, he started off by telling about times he'd been faced with technical challenges that really sucked. He then opened up the floor to the crowd to share their stories. The tales of woe expounded were like a history of computers gone bad, from printers shooting parts across the room to infinite loops to missing source code (the inspiration for SourceForge). They were simultaneously the geekiest and funniest stories I'd heard in some time. And like the "Halfbaked" session, virtually everyone in the room participated, making the session all the more illuminating and entertaining.
I hope that Tim and the entire O'Reilly organization get as much out of FOO Camp as do the participants. We all certainly owe him a debt of gratitude for hosting this incredible event.
Post Script: I hung up on Bank of America after being on hold for 190 minutes! I hope there is less of a wait when I call to cancel my card.
I watched the 20/20 story last night on Kyle MacDonald's quest to trade "one red paperclip" for a house. The story is another testimony to the power of the Web as both a commerce machine (the very first trade -- a paperclip for a pen -- was facilitated on Craig's List) and PR Machine (how else would he end up on 20/20 and every other traditional media outlet you can imagine). But it is also a great story about resourcefulness and salesmanship.
I recently participated in a great event in NYC called the VentureVoice Workshop, put on by Greg Gallant and the team from the fantastic podcast VentureVoice. One of my fellow "instructors" in the workshop was a really impressive young entrepreneur named Tom Szaky. Tom is the CEO of TerraCycle, a company producing organic plan food and pesticide products, made and packaged entirely from waste. It is a product that literally has a negative ecological footprint -- by buying it you are helping the world. But, as Tom made clear, he is entrepreneur to make money first and save the world a distant second.
I was reminded of Tom's discussion of entrepreneurship by the One Red Paperclip story because Tom has managed to build his company by begging, borrowing and bartering. The initial funding for TerraCycle was won, in part, on the business plan competition circuit. Tom entered 6 business plan competitions, taking second in his first effort but winning each of the 5 subsequent competitions. That added up to thousands of string-free dollars. He got his furniture and computers from local universities that were upgrading offices and dorm rooms (they were thrilled to give the stuff to Tom because they would otherwise have had to pay for the equipment and furniture to be hauled away). He built his office and factory off the beaten path (in Trenton rather than NYC) to save on rent. He packages his product in recycled bottles that he gets for free. And Tom and the company are PR machines -- they get all their best marketing for free (check out all this press coverage thanks to a super charasmatic founder, clever marketing gimiks and a great product to talk about).
Sure, it is impressive to manage to trade up from a single paperclip to a house. But it is more impressive still to build a multi-million dollar corporation on a bunch of free worm poop, recycled soda bottles and the will to succeed.
A few weeks back I was on a panel at the Under the Radar conference. We were discussing vertical search. Rafe Needleman, who was moderating the panel, asked something to the effect of "hasn't search been solved? Is there anything left?" This was right before Fathers Day and I responded that I had spent the week looking for information on the best bar-b-q for which to ask for Dad's Day, but had come up with very little useful information. My conclusion was that at least the bar-b-q ecommerce search space remained wide open. Josh Jafee, one of my favorite tech reporters, proceeded to distilled my comments down to the headline "David Hornik wants BBQ.com 2.0."
About a week after the BBQ 2.0 discussion and Josh's write-up, I met with an entrepreneur who had just flown in from New York. When he got down to his pitch, he said to me "I understand that you're looking for the perfect bar-b-q -- We'll I've got it right here." He proceeded to pull out brochures from the Barbeques Galore store for some fabulous new grills (coincidentally, including the bar-b-q I had just gotten for Fathers Day). While the brochures were just a joke, they made me really appreciate him as an entrepreneur. He had done his homework. He had caught my attention. He had a sense of humor. In that short piece of schtick, he had gained my rapt attention for the rest of his pitch. What's more, he managed to appropriately bring the conversation back to BBQ 2.0 later in his presentation -- he had developed some very interesting fuzzy search technology which could actually be brought to bear on the BBQ search problem. If that presentation was any indication of how prepared, facile and resourceful that particular entrepreneur would be when tackling business problems, he was just the sort of guy I like to back.
BBQ 2.0 came up yet again the other day while I was meeting with an entrepreneur who had built a different sort of search technology. His search engine was designed to sift through manipulated results to give real information about items in the shopping vertical. In particular, this technology was intended to find information to help guide in the buying decision. As he described his search engine in the context of consumer electronics, I told him about my failed quest for good information on bar-b-q features, pricing, etc. To which he responded "well, let's see what you would have gotten if you had used my search engine." He proceeded to confidently pull up a browser and search for "barbecues" -- to his credit, his technology came up with much better results than all the other search engines I had tried. It was a great testimony to the company's technology and a testimony to the entrepreneur that he was willing to believe in that technology and go out on a limb mid presentation. I absolutely love it when entrepreneurs let their technology speak for itself. It isn't just a testimony to the technology, it is also a testimony to the entrepreneur for having the confidence and flexibility to take a risk. In this instance, it paid off in a big way.
It is always a privilege to be pitched by folks like the two guys I described above. While I may not ultimately fund either company, both entrepreneurs were able to capture my attention and make me ask "why not?" rather than "why?"
