COMMUNICATION TOOLS: HOW TO MAKE YOUR IDEA CREDIBLE AND UNDERSTANDABLE
1. Why do you need the toolkit?
2. How to create and use your toolkit?
3. What is in the toolkit?
AGENDA
WHY DO WE NEED THE TOOLS?
SLIDE 4
B-plan
Exec Summary
PPT Deck
White paper
Communicate to employees
Solicit investment
Communicate to partners
Communicate to customers
INVESTORS MUST UNDERSTAND WHAT YOU DO AND
WHO CARES
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Investment Opportunity
Clear Message
Focused Company
EXPLAIN HOW YOUR BUSINESS WILL WORK
South Park Clip: From 18 min18 sec -‐> To 19:00 min
USERS NEED TO UNDERSTAND HOW YOU SOLVE A PROBLEM THAT THEY HAVE
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Repeatable Sales
Product-‐Market Fit
~40% of users will be very upset if your product does not exist
HOW DO THE TOOLS WORK?
The tools EXPLAIN and ILLUSTRATE:
What is unique about your business?
Who cares?
How will you execute?
Slide 3
DIFFERENTIATED SUSTAINABLE
VALUE PROPOSITION
SELLING VS. PLANNING
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VS.
HOW TO CREATE AND USE THE TOOLKIT
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
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
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LEAN START-‐UP
1. Customer discovery
2. Customer valida[on
3. Customer crea[on
4. Company building
MATCH YOUR TOOLKIT TO THE STAGE OF YOUR COMPANY DEVELOPMENT
B E P W
MAKE YOUR MESSAGE MEMORABLE
ENGAGE your audience
Make informa[on meaningful to them Case studies, tes[monials
Address knowledge gaps Visuals, charts, graphs
Let them arrive at their own conclusions Pace your delivery
Re-‐iterate value proposi[on
Slide 8
POWER OF STORYTELLING LEFTY THE SALESMAN TRIES TO SELL ERNIE AN INVISIBLE ICE CREAM
CONE
http://www.youtube.com/watch?v=Xk365oP1tiM&feature=related
From 1 min 14 sec -‐> To 2 min 20 sec
Sesame Street Clip:
YOU ARE THE MOST IMPORTANT COMMUNICATION TOOL
Understanding ‘Honest Signals’ in Business
-‐ Tone of voice, variability
-‐ Level of energy
-‐ Pacing your delivery
“This ‘second channel’ of human communica3on acts in parallel with that based on ra3onal thinking and verbal communica3on, and it is much more important in human affairs than most people like to think”
Alex Pentland, MIT
EXAMPLE: ILLUSTRATIONS MAKE COMPLEX IDEAS UNDERSTANDABLE
EXAMPLE: TOTAL ADDRESSABLE MARKET
Source: Based on eMarketer 2008 data
Total US market for our enabling technology
$0
$400
$800
$1,200
$1,600
2009 2010 2011 2012 2013 2014
Millions
Local Ads $100B
$7.5B expanded market for Ad Networks $6B new revenue for ISPs
$1.5 Billion for our enabling technology
2014 $15B Local Gap Online Represents
By providing 3D imaging at low cost, we aim to make the procedures of the 21st century safer, faster and cheaper with beder success rates, fewer complica[ons and shorter hospital stays.
XYZ Inc. medical device startup, is based on the premise that image guidance will be a key element in the successful deployment of emerging minimally invasive therapies over the next decade.
EXAMPLE: ACCESSIBLE MESSAGE, CLEARLY STATED VALUE PROPOSITION
Beder……Product and Benefits
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Not bad….Opportunity
COMMUNICATION TOOLS HELP YOU BUILD RELATIONSHIPS
Be strategic about what you provide and when you provide it Not everyone should see your white paper or business plan Leave some details for later, don’t give away everything in the first mee[ng
Your documenta[on should radiate professionalism Ensure accurate grammar, spelling, dic[on, illustra[on, layout, etc.
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KNOW YOUR AUDIENCE
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Speak to your audience in language that they understand: Ins[tu[onal investor – do not speak ‘techie’, [e everything back to
money
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
Angel Investors -‐ access their background; understand their interests
Customer – understand their industry and pain points
SOCIAL MEDIA TOOLS
• Create an engaging conversa[on with bloggers and customers
• Let peers, partners, journalists and investors “discover” your story through the social web
• Show what you do through images, video and make it easy to find through SEO;
• Many access points: LinkedIn Group, Twider stream, YouTube, Flickr Gallery, Wikipedia Think of Twee[ng as an easy way to call aden[on to news and a call for ac[on
CREATE CONTEXT
Idea# 1: “Don’t Dive Straight into the Technology” (Value ProposiOon)
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.
• No hype. Let investors become enthusias[c on his/her own FATCUAL
• Business planning is an itera[ve and adap[ve process DYNAMIC
• A clear, precise structure is a courtesy to those inves[ng their [me in reading the proposal VISUALLY COMPLELLING
• The storyline and all the facts presented must fit together and generate a well rounded impression
CONSISTENT, CONCISE, CLEAR
• Acknowledge style, recognize knowledge gaps and biases AUDIENCE-‐CENTRIC
• Those who allocate investment resources rarely are technical experts for the technology used in the proposal EASE OF UNDERSTANDING
PRINCIPLES FOR BUSINESS PLANNING AND COMMUNICATION
WHAT IS INCLUDED IN THE TOOLKIT?
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THE TOOLS
The Tools You Need to Raise Money
http://www.marsdd.com/entrepreneurs-‐toolkit/articles/Investor-‐engagement-‐The-‐tools-‐you-‐need-‐to-‐raise-‐money
THE ELEVATOR PITCH What: A 30 second overview of your business concept Why: To get a follow–on meeting When: In a cold call to an investor, customer, potential partner, etc. Good for networking at trade shows, business functions, etc. Dos and Don’ts: Do not spend forever practicing and re[ining 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
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ABC Inc. is a location-‐based advertising company focused on bringing hyper local targeting to any website.
Through a unique privacy architecture, Inc's technology allows media companies and advertising agencies to accurately reach the most relevant and responsive demographics online.
PAIN POINT
A need for…
The Elevator Pitch
VALUE PROPOSITION
Allow one to…
SLIDE 29
THE EXECUTIVE SUMMARY
The Executive Summary
http://www.marsdd.com/entrepreneurs-‐toolkit/articles/Investor-‐engagement-‐The-‐executive-‐summary.html
The Executive Summary Template
http://www.marsdd.com/entrepreneurs-‐toolkit/articles/Investor-‐engagement-‐Executive-‐summary-‐template
THE EXECUTIVE SUMMARY What: 3-‐5 page summary of your technology, product, sales plan, revenue path and [inancial requirements
Why: A ‘teaser’ document meant to generate a request for more information or a meeting
Readers will want to get their head around the concepts quickly When: When you have a ‘warm’ intro or an invitation to contact someone Integral [irst interaction with an investor Rides the line between con[idential and non-‐con[idential – some degree of trust
Dos and Don’ts: Has to have the right emphasis given the maturity of the business concept
Keep it current
Slide 30
THE WHITEPAPER What: A fairly concise layman’s summary of your technology, product(s), the uniqueness of the technology and products and the value proposition
Why: Helps investors to understand how a concept or technology works When: After 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
Slide 31
SLIDE 32
THE POWERPOINT
Elements of a Pitch Deck http://www.marsdd.com/entrepreneurs-‐toolkit/articles/Investor-‐engagement-‐Elements-‐of-‐a-‐pitch-‐deck
Building a Strong Presentation http://www.marsdd.com/entrepreneurs-‐toolkit/articles/Investor-‐engagement-‐-‐Building-‐a-‐strong-‐presentation.html
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 information in a short period of time When: Usually the second piece of information an investor receives after the executive summary
Investors love these because they can [lip through them very fast and get highlights
Dos and Don’ts: Critical document in the fundraising process – present a sound story; make it look good
Practice speaking to it, preferably in front of friendly people who will ask lots of questions
Use graphics as much as possible
Slide 33
SLIDE 34
THE BUSINESS PLAN
The Business Plan http://www.marsdd.com/entrepreneurs-‐toolkit/articles/Investor-‐engagement-‐The-‐business-‐plan.html
The Business Plan Template http://www.marsdd.com/entrepreneurs-‐toolkit/articles/Investor-‐Engagement-‐Business-‐Plan-‐Template
Business Plans for SE and SPBs http://www.marsdd.com/entrepreneurs-‐toolkit/articles/Business-‐plans-‐for-‐SEs-‐and-‐SPBs
THE BUSINESS PLAN What: A rigorously prepared and executable description of how you will build your business
Why: This is your roadmap for how you are going to build your business Describes roles and responsibilities for building various aspects of the business
When: When you have assembled enough solid information to write it Highly proprietary; later stages of diligence Wait for the investor to to ask for it Dos and Don’ts: Often made a condition of [inancing or a board action item Re-‐write with every major change in strategic direction Avoid the temptation to turn this into a sales tool – preserve its integrity as an execution plan
Slide 35
SLIDE 36
BUSINESS PLAN
Executive Summary Company & Opportunity Summary Product & Technology Market Size and Growth Sales and Marketing Plan Competitive Overview Operations Plan Management Team Financials & Investment Requirements
Outline
SLIDE 37
POWERPOINT/INVESTOR DECK
Outline
Company Description (1 paragraph) Company Overview, Management & Vision (2-3 slides)
Need & Existing Solutions (1-2 slides) Technology, Products and Product Rollout (2-3 slides)
Market Opportunity (1 Slide ,Graphical) Competitive Overview (1 Slide , Largely Graphical)
Sales Strategy & Channels (2-3 slides) Partnerships and/or Partnerships strategy ( 1 slide)
Financials & Path to Liquidity (2-3 Slides (Largely Graphical)
SLIDE 38
EXECUTIVE SUMMARY
Company Description (1 paragraph) Basic Need & Company Solution (1 paragraph)
Technology and Product(s) (1 paragraph; diagram)
Value Proposition (couple of bullets) Market Size and Growth (diagram) Sales Plan (1 paragraph) Competitive Advantages (couple of bullets)
Management (detailed bullets) Revenue Growth Projections (diagram) Financing Requirements (1 paragraph)
Outline
Veronika Litinski Advisor, MaRS Discovery District T 416-‐673-‐8113 E [email protected] W www.marsdd.com