investor repellers: gli errori da non fare con gli investitori
DESCRIPTION
Workshop Girls in Tech - Italy #3 Andrea Baldini e Tomaso Rodriguez rivelano dalle loro esperienze personali e con un po’ di humor cosa (non) fare nel preparare e presentare pitch e business plan ad investitori. by Junior Jedi WorkshopTRANSCRIPT
WorkshopsWorkshopsWorkshopsWorkshops
Investor Repellers
“10” mistakes to avoid when
you present to investors
Andrea Baldini – Tomaso Rodriguez
WHAT’SWHAT’S THISTHIS??
WHAT’SWHAT’S GONNA GONNA HAPPENHAPPEN??
Short workshop on some things you should (NOT)
do when presenting to investors…do when presenting to investors…
…with a bit of humor and theatrics…
…for all the startuppers out there!
FORMAT: MISTAKE � RULE
� Presented to you by Junior Jedi 2
RULERULE # 0# 0
GOODGOOD COMMUNICATIONSCOMMUNICATIONS
It’s a story I want to believe in
4
5
RULERULE # # 11
EXECUTIVE SUMMARYEXECUTIVE SUMMARY
What are you going to tell me?
7
FIRST THINGS FIRSTFIRST THINGS FIRST
Golden rule:
Tell me what you are going to tell me,
then tell me,
then summarize (= tell me again)
8
RULERULE # # 22
IT’SIT’S THE THE PRODUCTPRODUCT, , STUPIDSTUPID!!
What is it? What is it for?
10
Source: https://www.apple.com11
RULERULE # # 33
BUSINESS MODEL FIRSTBUSINESS MODEL FIRST
Financials will come
13
BUSINESS MODELBUSINESS MODEL
Razor Blade
Reverse Razor Blade
14
SOME EXAMPLESSOME EXAMPLES
• Advertising
• Add On
• Razor Blade
• Freemium
• Low Cost• Low Cost
• Pay as you Go
• Subscription model
• Brick & mortar vs Digital Distribution
• Virtual goods
• …
15
BUSINESS CASEBUSINESS CASE
• New product/service � addressed needs
• Breakthrough innovation � nearest comparable
• Business case: the reasoning for switching from the
existing to the newexisting to the new
• Always consider:
– Laziness of people
– Fear of the unknown
Pros Cons
• ...
• …
• …
• ...
• …
• …BE
CONVINCING!
16
RULERULE # 4# 4
SUPPORTSUPPORT WITH WITH METRICSMETRICS
investors MANAGE risk
18
METRICSMETRICS
• Follow business model and strategy
• Financials should reflect them
• VCs love measurable things
– Make their job easier– Make their job easier
– Help in proving the value of a concept
– Can validate an idea that «sounds good»
19
METRICS FOR A WEBCO (OLD SCHOOL)METRICS FOR A WEBCO (OLD SCHOOL)
CAC
Customer
Acquisition
Cost
• SEM
• SEO
• Retargeting
• Affiliation
LTV
Lifetime
Value
• MWA
• Lead Lifetime
• Churn Rate
Cost• Affiliation
• Mob Ads
• …
Value
• Recurring Sales
• …
LTV > CAC ???
20
YOUR OWN STRATEGY, YOUR OWN METRICSYOUR OWN STRATEGY, YOUR OWN METRICS
• «old school» vs. start up � VCs don’t like
buying user bases
• Key: acquire quality users at the lowest cost
possiblepossible
21
RULERULE # 5# 5
EXECUTIONEXECUTION
So you got an idea? That don’t impress me much
22
EXECUTIONEXECUTION
• Idea is NOTHING without execution
• No plan = No money from an investor
• Go-to-market plan � coherent with strategy
• Measurable performance• Measurable performance
23
RULERULE # 6# 6
FINDFIND THE MARKET BEFORE IT THE MARKET BEFORE IT FINDSFINDS YOUYOU
How to segment and identify my segments
24
THE OLD WAYSTHE OLD WAYS
• segment = people with the same buying
motive
• Judging what people will buy based on:
– Job
– Salary– Salary
– Level of employment
• Largely irrelevant as:
– people do not conform to
stereotypes
– people from all classes and
occupations share similar aspirations.
© Prof. Paul Fifield
http://www.fifield.co.uk/25
THE NEW SCHOOLTHE NEW SCHOOLThe best (real) segments comprise people with the same needs &
motivations – these change depending on the time, place and event
People share the same
needs and motivations, not
because of who they are, but
what brings them together
© Prof. Paul Fifield
http://www.fifield.co.uk/26
HD AND THEIR BUSINESS DEFINITIONHD AND THEIR BUSINESS DEFINITION
© Prof. Paul Fifield
http://www.fifield.co.uk/27
“Product led” Company “Market led”
Big Boys’ Toys
Fashion Accessories
DIY = Do It Yourself
Entertainment
Jewelry
Motor Cycles
Watches
Electric Motors
Electronics
Watches
Harley Davidson
Swatch
B&D
Sony
Rolex
IN WHICH BUSINESS ARE YOU IN?IN WHICH BUSINESS ARE YOU IN?
Jewelry
“Hope”
The Third Place
The Art of Traveling
Parental guilt
Watches
Cosmetics
Coffee Shops
Leather/Luggage
Encyclopedias
Rolex
Revlon
Starbucks
Louis Vuitton
Britannica
Our Product? Our Company Our Business
© Prof. Paul Fifield
http://www.fifield.co.uk/28
MARKET ≠ ADDRESSABLE MARKETMARKET ≠ ADDRESSABLE MARKET
• Sector / niche
• Segmentation
• Geography
• Distribution• Distribution
• Legal constraints
• Competition
• Barriers to entry
• …
29
RULERULE # 7# 7
VALUATIONVALUATION
Where does taht number come from…
30
SHOW ME THE MONEYSHOW ME THE MONEY
• For VCs and investors valuation comes out of many
elements (strategy, focus, market, metrics, biz
model, etc., etc., etc.)
• Investors are (usually) in for the long term
• Market (usually) wins
• VCs reason BACKWARDS (exit and dilution)
• Incentives needs to be aligned
• CAVEAT: be certain to know what you are buying
with a certain valuation
31
RULERULE # # 88
BE BE TRANSPARENTTRANSPARENT
We are gonna find it out anyway…
33
SECURITY BY OBSCURITY IS NO GOODSECURITY BY OBSCURITY IS NO GOOD
• Be transparent on TEAM, don’t hide missing
pieces, be practical
• Be transparent on COMPETITORS, which
one keeps you awake at night?
• Be transparent on LOCK-IN, how you avoid • Be transparent on LOCK-IN, how you avoid
losing ground and user base or customers?
• Be transparent on anything, there is going
to be a Due Diligence if everything goes
well…
34
RULERULE # 9# 9
GETGET CHALLENGEDCHALLENGED BEFORE BEFORE PRESENTINGPRESENTING
Feedback is good, secrets are not
35
IRIDIUM CASEIRIDIUM CASE
• 66 low earth orbitingsatellites
• Allowing subscribers to make phone calls all over the world
• Cost of the project over • Cost of the project over $6 bln
• IPOed in June 1997 for $20 / share, in less thanone year price increasedto $ 72.19 / share
• In November 1998 the service was launched
36
IRIDIUM CASE (IRIDIUM CASE (contcont.).)
“We’re a classic MBA case study in how not to
introduce a product. First we created a marvelous
technological achievement. Then we asked how
to make money on it.”
• In May 1999 share price was just $ 3.06
• Bankruptcy in August 1999
Hey! Didto make money on it.”
Iridium Interim CEO John A.
Richardson, August 1999
Hey! Did
somebody tell
these guys
that the
product is too
bulky???
Source http://lfp-blog.com/how-the-
mighty-fall37
LESSONS LEARNED (AT HIGH COST)LESSONS LEARNED (AT HIGH COST)
Always get challenged,
feedback is good!
DON’T FALL IN LOVE WITH YOUR
PRODUCT/IDEA, OR YOU’LL SEE
ONLY WHAT YOU WANT TO SEE
38
RULERULE # # 1010
GETGET INFO ON INFO ON VCVC BEFOREBEFORE PRESENTINGPRESENTING
One size doesn’t fit all
40
GET INFO ON GET INFO ON VCsVCs BEFORE PRESENTINGBEFORE PRESENTING
• VCs will provide «smart» money for your business
• But every VC has its own expertise in terms of:– Geographies
– Sectors
– Network– Network
– Markets
– Stages of growth
– …
• Getting financed by a VC is like getting married, you have to choose accurately!
41
RULERULE # # 10+10+
DON’T BE (TOO) BULLISHDON’T BE (TOO) BULLISH
One size doesn’t fit all
42
THERE ARE NOT MANY GOOGLES AND THERE ARE NOT MANY GOOGLES AND
FACEBOOKS OUT THEREFACEBOOKS OUT THERE
Need of cash
€ 500 k
Planning to sell the company
at 15 x EBITDA in 4 years at
€ 1,2 B
43
COMPARISONS SHOULD BE FAIR ENOUGHCOMPARISONS SHOULD BE FAIR ENOUGH
Feature1
Feature2
Feature3
Feature4
Feature5
Feature6
Feature7
Feature8
MyProduct
44
ThankThank YouYou!!ThankThank YouYou!!
Investor Repellers
“10” mistakes to avoid when
you present to investors
Andrea Baldini – Tomaso Rodriguez
FrancescoFrancesco
InguscioInguscio
MatteoMatteo
ScarabelliScarabelli
TomasoTomaso
RodriguezRodriguez
AndreaAndrea
BaldiniBaldini
MatteoMatteo
FagginFagginMatteoMatteo
PanfiloPanfilo
EmilEmil
AbirascidAbirascid
GiusyGiusy
CannoneCannone
AnnaAnna
SargianSargian
AlessandraAlessandra
GiuffrantiGiuffranti
FedericaFederica FrancescaFrancesca PierantonioPierantonio MarinaMarinaFedericaFederica
PasiniPasini
FrancescaFrancesca
BresciaBrescia
PierantonioPierantonio
LuceriLuceri
MarinaMarina
CalcagnoCalcagno
UmbertoUmberto
De FeoDe Feo
RaffaeleRaffaele
MauroMauro
EugeniaEugenia
Di SommaDi Somma
http://www.juniorjedi.comhttp://www.juniorjedi.com46
Next workshop:Next workshop:
Finanziamento VC: capire un term sheetPierantonio Luceri , Matteo Panfilo
28 giugno 2012 @ StartMiUp
Register on EventBrite!
Q&AQ&A
49
GUERRILLA MARKETINGGUERRILLA MARKETING
Drastic
HumorousGoodwill
Guerrilla
Marketing
One shot
Completely
Unexpected
Cheap
50
EXAMPLE OF BAD EXECUTIONEXAMPLE OF BAD EXECUTION
• Ben-Gay is a cream to relieve
pains very successful in US
• When the company decided
to launch the Aspirin it was a to launch the Aspirin it was a
flop
• It was just a naming
problem… would you
swallow a Ben-Gay?
51