Howard Love’s Blog
Things I’ve learned from very expensive lessons.
The Perfect Pitch Deck
Today is the official launch date of my book, “The Start-Up J Curve”, so I thought it would be a good day to share something which can greatly benefit most start-ups – and especially those who are looking to raise money. I call it The Start-Up J Curve Perfect Pitch Deck.
My venture partner, David Hehman, and I have seen hundreds, probably thousands of pitches over the past 20 years. Many of those presentations, I dare say, were not very good. It’s not that the entrepreneur isn’t good, or that their idea doesn’t have some merit – it’s that the presentation just fell short. It didn’t present the business in the best light and usually left lots of unanswered questions. In not having a great presentation, they did themselves and their idea a disservice. So when I was writing the Start-Up J Curve book, one of the things I set out to do is describe how to make a perfect pitch deck. I did extensive research (the VC firm Sequoia, for example, had one of the better ones) and looked through a bunch of old ones that had been presented to us. Then I put together a PowerPoint deck with 20 slides. Finally, I sent it around to some of my VC friends and asked them for their input. It’s a template that describes exactly what to put on each slide. If you follow it, you will not only give your business the best possible shot at getting funded, but perhaps even more importantly, it will force you to really think through your business.
The Perfect Pitch Deck also contains general pointers for the presentation, such as:
- KISS – Keep It Simple. Be succinct.
- Don’t have more than 3-4 points per slide
- Don’t have anything on a slide that forces middle-aged people to squint.
- Skip fancy graphics
- Shoot for 15 slides total, no more than 20.
- It’s OK to leave some of the finer details out. You can elaborate in the ensuing discussion.
- Don’t read off your slides. Slides should illustrate the points you want to make, not serve as speaking notes.
If you really, really know your business, this deck will only take 2-3 hours to complete. If you don’t, it may take weeks. BTW, it’s OK if it takes you weeks to nail it – the work you are doing is INVALUABLE! By going through the process, whether you get funded or not, your odds of start-up success will certainly go up. That’s a promise.
The deck is available for free at howardlove.com. Let me know what you think (but please don’t send your deck unsolicited) – my email is howard@howardlove.com.
The Billion Dollar Idea
Recently the Dollar Shave Club was bought by Unilever for one billion dollars. I know many will think “why didn’t I have that idea?” However, perhaps a more productive thought is “how could I come up with an idea like that?” Well, it may sound far fetched but I actually do believe that you can. In my book, The Start-up J Curve: Six Steps to Entrepreneurial Success, I talk about the process of coming up with the winning idea. In fact, I even mentioned the Dollar Shave Club as a classic example.
Here is the excerpt:
One great method to help surface good ideas for the Create
phase is to become problem sensitive. This means training yourself
to notice the problems all around you or, rather, overcoming
your natural propensity to gloss over problems. We mentally
fast-forward through problems as a matter of survival; if we
obsess over every minor obstacle that crosses our path, we’ll never
accomplish anything, and we might be miserable. I’m not suggesting
that you become so problem sensitive that you become
incapacitated. I am suggesting that increasing this sensitivity will
facilitate your search for a marketable product.
For instance, say you have to make a last-minute, inconvenient
trip to the store because you’ve run out of razor blades. So you
drag yourself out of the house late on a Sunday night, arrive at the
store, find your package of eight razor blades, and buy them for
$32. Right there are two big problems: inconvenience and cost.
The guys who started the $1 Shave Club were probably sensitive
to these problems, and it led them to a solution: Subscribe
to the club for $1, and the club sends you razor blades monthly.
It’s a simple but brilliant problem-solving idea, and it hooked
me. Their costs of manufacture and shipping are low, and they
also upsell you to fancier blades, resulting in even more profit.
As the club’s motto goes, “Shave time, shave money.”
By paying close attention to problems in your life—when you
shop, at work, when you’re online—you can find potential ideas
for start-ups. On top of that, you can determine if a problem is
significant and widespread (rather than minor and a result of your
own idiosyncrasies) by talking to others. Are your friends and colleagues
as irritated as you are by a given problem? If so, and if you
think it’s a problem you can solve, you may want to move forward
on creating a solution. And this is a much better approach
than the typical brainstorming sessions that some start-up aspirants
favor—in which people throw out all sorts of imaginative
concepts that sound good in the conference room but lack a realworld
foundation and customer resonance, like having to go out
to the store for an overpriced package of razor blades.
I recognize that looking for problems may sound simplistic
from an idea-generation standpoint. Obviously, it takes more
than the recognition that gasoline is too expensive to develop a
marketable alternative fuel. At the same time, don’t be daunted
by big problems. Elon Musk was determined to tackle our
dependence on fossil fuels, and his boldness has led him to
create Tesla and Solar City. Training yourself to recognize the
problems in life is a great start, but don’t stop there. Be creative
in coming up with solutions, and then figure out a way to make
your solution a reality and a viable business.
You also need to ask yourself if you’re passionate about the
given problem and solution. Passion is a key ingredient and will
help you overcome the many hurdles a start-up presents. Startups
are incredibly hard, and if you aren’t fully engaged in what
you’re doing, then you have a problem you can’t solve.
Numerous factors affect whether a start-up idea bears fruit,
but the genesis is often some problem that bothers you or
inspires you—a problem that an observant entrepreneur grasps
and responds to before their potential competitors, who are still
in their conference rooms brainstorming.
Good luck with your next billion dollar idea, and if you want get that idea to success as fast as possible, check out The Start-up J Curve: The Six Steps to Entrepreneurial Success !
The Complications with Complexity
Recent conversations with several very young startups reminded me of a common problem that many start-ups face while they are in their early days: The product is too complicated.
Complicated products don’t work for many reasons, the first of which is they are just too hard to explain and “message”. When somebody asks you what your product does, you need a crisp one-line answer and you need to be able to deliver it without hesitation. If you fumble or hesitate when asked, you can assume you have a problem. If you deliver your one-liner and the recipient gives you a blank stare, that is also likely a problem. The other big challenge with complicated products is that they are complex to build, so they take too long to get out the door. And since time is money (and nowhere is that more pronounced than in start-ups), you end up burning precious amounts of cash before your product gets to market. Hard-to-make and hard-to-sell is not a great way to begin your startup adventure.
So I find myself pushing these early entrepreneurs to cut things out and do so quickly. You can get there by asking, what is the one single thing I am doing that is unique and really solves a problem? Chuck everything else overboard, focus on that one thing and get it out in the marketplace ASAP to see if anyone cares. This begins the true journey to find out what the REAL product needs to be.
In my book, The Start-up J Curve, I highlight how the toughest part of the journey is the first few steps: Create, Release, Morph and Model. Those steps form the bottom of the J Curve, which I also refer to as the “long cold winter.” The trick is to get through these first steps as fast as possible. Complicated products delay traversing the nadir of the J Curve and make those first steps a long and painful process.Don’t go there. Simplify your product now. Strip it down to its essentials and “Get the Damn thing out there!”
The Magical Importance of a Dashboard
My venture partner David Hehman and I have noticed that all of our best performing companies have dashboards that they share with us. It’s critically important that the CEO of a company, it’s senior employees and primary investors understand what is going on with the business. The best way to do that is to have a dashboard that shows clearly the Key Performance Indicators (KPI’s). Tracking those KPI’s will show you early signs of progress or trouble. Numbers that are tracked tend to seemingly magically be the ones that improve, so picking the right KPI’s is very important.
Getting Started
The key is just to start, don’t put it off. I’ve seen founders get daunted about getting a dashboard going and there is no reason to. Just create a Google Doc Spreadsheet and on the first row, put in today’s date and on the column next to it fill in the traffic, or sales, or posts or whatever metric you consider important. If the next few columns are obvious as to what they should be, then fill those in too. There you have dashboard. Total elapsed time, 5 minutes. Google docs allow you to share that sheet with others, so do so with your senior management team and primary investors. Now you’re up to 6 minutes. Each day, you fill in a new row. Takes a few minutes and suddenly you’re riveted on the primary drivers of your business. And when you as a founder are riveted on the numbies, guess what – soon your entire team is as well. Start each meeting by reviewing the numbers, it is the reality that everyone should be facing.
Our Dashboard at LoveToKnow
LoveToKnow is over a decade old, but I still start every day with looking at the numbers. I get my numbers from two sources, Google analytics for traffic and Google docs where we track the revenue sources for each site each day. I use Google Analytics to track the traffic of each of our sites as well as the primary categories within each site. About once a week I’ll look at every channel within our sites, about 80 overall. If I have questions, I’ll do a quick screen grab (I use SnagIt – and highly recommend) and then annotate it or highlight it, then fire off an email asking a question or pointing out an observation. If anything I tend to over-react and if I see troubling trends I tend to wait a day or two now to confirm rather than sound the alarm. But I think that everyone at LTK knows I’m watching our two primary business metrics of revenue and traffic very, very closely.
There are important things that you can’t put easily into a dashboard like product quality and employee performance, but over time, these both will show up in the numbers. The trends are going to head south unless you have great product quality and motivated capable employees.
KISS
Also, don’t confuse a dashboard with analytics. Analytics have their place, where you can dive into the black hole and pull out interesting observations about your business and how to make it better. I’m all for analytics, though they can also be a time waster and divert you from nailing the big picture. A dashboard should be simple enough that everyone involved has no doubt how to read it. It also needs to be simple enough that everyone can zoom in on the few key metrics. I’ve seen companies get carried away with KPI’s and the problem is that if there are too many, suddenly nobody really cares anymore. Kind of like complicated comp plans, they just don’t work because the average person can’t figure them out. They roll their eyes and figure it’s just random if they hit a bonus. Think KISS (Keep It Simple Stupid)!!
Intellectual Honesty
As I explain in my upcoming book, called The Startup J Curve, intellectual honesty is a very critical ingredient of startup success. The reason is that it allows you to save critical time and time is money. Without intellectual honesty and without dashboards that encourage it, David and I see companies drift. They think they are doing stuff but none of it is tied back to reality so they just float along haplessly. Then suddenly, we are having a conversation with them and we realize that really nothing much has happened in the past 3 months. We just shake our heads because no startup has 3 months to waste. That’s when we realize that this company is in serious danger of heading for a zero. A commitment to a decent dashboard would have saved 2 of those 3 months and then you have 2 extra months to figure it out. Critical.
Just Do It
If you don’t yet have a dashboard yet for your startup, stop whatever it is that you are doing and take 5 minutes to begin one today. Just start. You can make it better tomorrow, and the next day. Make it simple, share it widely and start each day with it. Before you know it, the metrics will start getting better and you will be headed for startup success. That’s the way it works and, yes, it’s kind of magic!