entrepreneurship 101: business communication tools with veronika litinski

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

Slide 5

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

Slide 7

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

Slide 9

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

Slide 11

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

Slide 19

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.

Slide 20

KNOW YOUR AUDIENCE

Slide 21

  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?

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

Slide 27

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…

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

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

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

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

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)

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