by Bill Reichert, Garage Technology Ventures
With all the blogs, videos, books, coaches and workshops for creating compelling presentations, how can it be that we are still inundated with pitch decks full of terrible slides? Okay, it’s really easy to criticize. It’s really hard to design brilliant slides that communicate your key points clearly.
Most articles and blogs on slides focus on design – fonts and graphics, etc. I want to focus on substance and content. My hope here is to steer you away from common messaging mistakes, and show you what investors are really looking for.
So, in traditional top ten format, the top ten terrible horrible very bad slides …
- Cover slide: This slide has the name of the company in big bold letters. Typically, the name of the company looks like an almost random sequence of letters (and sometimes numbers) that no one can pronounce. But the team is super proud that, “We got the URL!” Sometimes there’s a logo or a picture or a tagline. “Advanced Intelligence Empowering the Future of Mobile!” Huh? Please: Make sure that we know what business you are in, where you are located, and who is presenting. This is the easiest slide for everyone to fix. Cardinal sin: Launching your presentation with everyone in the room thinking, “I wonder what this company does?”
- First Slide: “Problem.” Wrong! Almost every template, blog, video and book about pitch decks says that you should “start with the Problem!” No, no, no! Before you talk about the problem, we have to understand your solution. We don’t need to hear how tough it is in the retail world. We don’t need to hear that hacks are proliferating. We don’t need to hear how many people are dying of cancer, or how many polar bears are dying from global warming, or how many people can’t find a parking place. Please: Tell us your solution and why it is incredibly valuable to your target customers. “We improve 10x [something important and valuable to these customers] by doing [something no one else has been able to do before].” Maybe there is a nuance to the problem you are solving that you need to clarify. If so, do it in the context of your solution, or in the discussion of the Market Opportunity (see below). Also, if you have good evidence that you have real traction, you should also mention it here.
- Product Overview: (This is usually labeled Solution or Technology or Secret Sauce.) God bless the scientists and engineers of the world. Without them, we would all still be hunter-gatherers. They should have their day in the sun, but the product slide is not the right place to detail the wonderfully elegant complexity of the technology stack and automated workflows of your brilliant enterprise software solution. At the other extreme, we get a bunch of unreadable screen shots intended to demonstrate your beautiful UI design capability. Please: First make sure we fully understand how a customer uses and gets value out of your product or service. Then, identify the top two or three things you have that represent your novel secret sauce, and why they are highly valuable and defensible. Don’t show us your detailed architecture with 38 boxes and arrows labelled with six-point font. Don’t show us unreadable screen shots. If you’ve got some customers who love your product, have them tell us (testimonials) why they love you.
- Market Size: Some clever person came up with the idea of a three-bubble market size slide with TAM, SAM and SOM. Now every pitch deck on the planet has exactly the same slide. Some creatively and elegantly embed the bubbles inside each other. Others add two-decimal CAGR calculations. The fact is: No one believes that any of your numbers matter! But every pitch coach insists you have to “show a big market.” As if telling us that $310 billion is spent every year on IT security will convince us that you are going to become a unicorn? Almost every target market you can think of is probably “big enough” in terms of absolute size. What will make you successful is not the size of the market, but rather your ability to convert prospects into customers. Please: Stop wasting our time with market size slides. Instead, the slide should be “Market Opportunity.” Show us that you understand exactly who your target customers are, how many there are, where they are, why they buy stuff, how they buy stuff, and how many of them you can reach cost-effectively. Once you’ve outlined your solution and your market opportunity, it should be crystal clear to investors what problem you’re solving and what value you are creating for what target customers.
- Competition: Entrepreneur Lie #5 is “We have no direct competition.” But you can’t avoid having a Competition slide in your deck. There are two universal templates for this slide — the multi-column checkbox table and the two-axis landscape chart. They all are the same. Either a bunch of green checks or bubbles in the column of your product, with the competitors’ columns filled with nasty red Xs showing how sucky their products are. Or, on the landscape version, you are high and to the right (at least when measured against “Ease of Use” and “Initial Cost”), while everyone else is below and to the left. No one believes that either chart is an accurate indication of the competitive challenge. Please: Tell us the two or three key buying factors for your target audience and give us customer-based evidence that you are superior, at least in most cases. Imagine your key competitor is in the room. What could they say, truthfully, about the difference between their product and your product? Any savvy investor will eventually uncover this, and so you should address this up front.
- Go-to-Market Strategy: Almost every pitch deck dumps a generic laundry list of marketing and sales tactics on this slide. Every consumer company is going to use social media, search optimization, word of mouth, and key influencers. Every enterprise company is going to use direct sales, channel partners, trade shows, content marketing, and key influencers. Please: Show us that you have evidence that you can develop an efficient, replicable, scalable marketing and sales process. Before you pitch, you should do the research, and ideally even do some testing, to narrow down a go-to-market approach that will be optimum for your business. If you’ve got some great evidence that you have cracked the nut on Customer Acquisition Cost and Customer Lifetime Value – that is, you already can show a path to profitability – this is where you can astound us with your entrepreneurial acumen!
- Business Model: We don’t want to see your business model canvas. (Whoever is coaching entrepreneurs to put that in their pitch deck should be forced to eat a hundred packs of sticky notes.) Usually, we get something about SaaS and Freemium, and maybe, if we’re lucky, something about unit economics. Please: Make sure we understand who buys what and for how much. If upsell is key to the model, what is the conversion rate? If you are splitting revenues with partners, make sure that’s clear. It’s a real downer when we discover later that the numbers you have been showing us are really Gross Merchandise Value, and your take is only 15%.
- Traction and Milestones: This is an extremely important slide, and yet it is frequently missing from pitch decks. Often we find ourselves having to ask after the pitch, “Where exactly are you now?” Product, customers, revenues, funding, team? At the other end of the spectrum, the slides we do see are frequently unreadable because there are so many marginal milestones listed. “Reserved URL.” “Opened office at WeWork.” “Finalized logo.” Please: Tell us the two or three most amazing achievements to date, and the two or three major hurdles you’re going to accomplish in the next 12 to 18 months. This is your chance to demonstrate that you understand your highest priorities, and you are execution oriented.
- Team: This is usually the most boring slide in the deck. Rarely does a startup company actually start out with a team that is World Class. Nevertheless, entrepreneurs try to snow us with a cloud of logos showing that someone on the team actually visited Stanford once and uses Google products. We don’t expect you to have a world class team day one. We just want to know that you can attract and build a world class team. Please: Tell us why this team is the right team to execute against your critical milestones in the next 12 months, and show us that you understand where the key gaps are that you intend to fill. The fact that someone went to Harvard Business School is largely irrelevant. (Some investors might consider that a negative). What is more important is that the individual is, for example, particularly qualified to land the first three beta customers.
- Financial Projections: Increasingly, entrepreneurs are leaving this slide out of the deck. Too many investors have told them, “I know you’re just making the numbers up, so I don’t bother to look at them.” Still, most savvy investors want to see that you understand the economics of your business. So, entrepreneurs just put up a crazy hockey stick. They all look alike, they are really hard to read, and none of them are credible. Please: Show a table, not a graph, with a limited set of numbers, and then highlight the three or four key numbers on the table – when you become cash-flow breakeven, how much capital you need to get there, what your revenues are in year five, and how many customers you have to get to meet your numbers. Before you try to convince us that you will be a $256 million company in five years, do your research and find successful companies that are comparable to yours, and then emulate their path to success in your numbers. If you can identify another company that is similar and successful, you will dramatically improve the credibility of your financial projections.
Final words: Beware of templates! Too many pitch coaches, with all the best intentions, wind up hurting entrepreneurs by imposing their standard templates. You cannot just fill in a template and expect to have a brilliant pitch. You may not need a Problem slide. You should definitely throw out the Market Size template and substitute a Market Opportunity slide. No template was designed for your situation. Your opportunities and challenges are unique. They may fit into a pattern similar to others, but the sequence and priority of your points probably does not fit a standard template. Use templates to guide you to make sure you cover the standard questions investors have, but don’t follow any template rigidly, including the recommendations above.
The mantra for entrepreneur communications is “Clear, Compelling, Credible, Concise.” Your main objective with your pitch deck is to motivate an investor to want to invest in your company. You can’t possibly convince an investor to invest with just a pitch deck, but you should hit the key points and get them excited enough to want to hear more. There are lots of ways to get your key points across in a clear, compelling, credible way. But if you destroy your credibility with crappy, irrelevant, misleading slides, it is unlikely you will get a follow-up invitation to come pitch to the rest of the partners.
At Garage Technology Ventures, we appreciate how hard you have worked to get to where you are, and how hard you have worked to craft your investor presentation. We wish we could work with all the great entrepreneurs we meet, but unfortunately we can’t. Please help us get to know you better by telling your story clearly and concisely.
If you are looking for more resources on raising venture capital, you can find several guides online at Resources for Entrepreneurs on the Garage website.
My thanks to Judith Viorst for the delightful book Alexander and the Terrible, Horrible, No Good, Very Bad Day. And thanks to Angelika Blendstrup, Chris Burry, Matt Day, Marc Burch, and Ken Singer for their editorial suggestions.
If you have any questions about this article, or about Garage Technology Ventures, you can contact Bill Reichert, Managing Director of Garage Technology Ventures (email: reichert@garage.com).