Learn From My Mistakes

I broke a lot of my own rules in my talk at the First Look Forum and, unfortunately, it wasn't the best thing to do. I've spent a lot of time listening to advisors over the last few months. And, most of the time, the advisors know more than me, so I've learned a lot. But, sometimes, you have to trust your gut. By not doing that, my presentation did not accurately reflect the potential of my company.

Before I go on, let me make a few things clear. First, it wasn't a total loss. I made some great connections with potential investors and I have some follow-up meetings scheduled. It just wasn't as good as it could have been and I didn't have the opportunity to do my full 10-minute pitch to the room full of investors. I would have liked to do that. And, second, I'm not faulting any of my advisors. The buck stops with me.

The First Look Forum process is unlike anything I've gone through before and, to some extent, that led me to some bad decisions. We started by creating 10-minute slide decks and, then, after they were created and reviewed, we created shorter 3-minute slide decks. Almost all of the 3-minute presentations at the forum were clearly shortened versions of the 10-minute presentations. As I noted in an earlier blog post, I started that way, but I ended up with a 3-minute pitch that was completely different.

If you've ever heard me speak, you'll know that I never use notes. I speak extemporaneously and I do a pretty good job of it. I will sometimes create an outline, but it is a very brief outline and I never refer to it during a talk. In thinking about it, the last time I gave any sort of a scripted talk was in 9th grade.

However, 3 minutes is really short -- it's easy to run over, as most of the presenters did. And, over and over, my advisors kept telling me of all the things I had to make sure to include. So, I ended up scripting the talk. That was mistake number one. Next, I rehearsed the talk in front of a lot of people. This was good and I kept tweaking it. By Saturday, I really had it down.

On to mistake number two. On Sunday, one of my advisors told me they thought that the pitch was only a B+, that to make it an A, it really needed work. I had too much fluff (compelling fluff, but nonetheless fluff) and I needed to cut that out and add some critical things that were missing, like a brief discussion of revenue. I think her advice was basically correct, but I should have ignored it, for two very important reasons:

1. By taking a pitch that I really knew and replacing it with a pitch that I didn't, I made it worse, not better. I could have elevated the B+ pitch to an A with good oratory. But a poorly delivered A pitch can easily fall to a C level. I didn't have the time to do the changes and I should have deferred them to the future.
2. Most of the other pitches, including the majority of the ones chosen for the 10-minute session, had more fluff than I had, and far less in the way of fact.. It turns out that the investors were looking for the grab, not the facts, in deciding who they wanted to vote for. My original pitch had more grab and fewer facts, especially given the delivery.

Whenever you're in unfamiliar territory, it's a good idea to assume the worst. I considered having an audio clip as part of my talk, but decided that there was no guarantee that we would have sound. I also could have had a little demo using the Internet and my cell phone, but I decided there was no guarantee of a net connection or that my cell phone would work (in fact, there was no internet connection available, which we didn't find out until Monday). I brought a backup of everything on a USB drive just in case something got messed up (and, in fact, the wrong version of my presentation was included in the deck, so that came in very handy).

That leads to mistake number three. We were told there would be a podium. If I'd been able to put my notes on a podium, I could have spoken more naturally and the notes wouldn't have mattered much. The fact that there would be a podium allowed me to make mistake number two above. But, the podium had the laptop and was basically in the way, worse than having no podium. If I had assumed the worst -- no audio, no podium, etc., I would have been in much better shape.

So, in short:

• Listen to advice, but do follow your own rules as much as you can.
  
• Time pressure trumps good advice. Defer it to later if you don't have time to do it right.
  
• Assume the worst, most inhospitable environment. You won't be far off.
  
• Learn from your mistakes. Or, even better, learn from mine.

Making A Fast Pitch

It always takes longer to write less. I already had a pitch for a 10-minute talk, but the first pitch in the NWEN First Look Forum is a 3-minute pitch. And, I only get to do the 10-minute pitch if I'm in the top five, so the 3-minute pitch is actually more important.

The 3-minute pitch deck is limited to five slides which, unless you're the fast talker from those old FedEx commercials, is about the most you can do anyway. So, I took my five key slides, basically the five slides on the topics they recommended we cover, and then I crammed some extra points into them to make sure I covered everything. Then, I did a practice pitch to my NWEN coaches. Ignoring the fact that my 3-minute pitch took me more than 4 minutes to deliver, it was a totally flat pitch. Even I wasn't interested in hearing more. What went wrong?

Well, in trying to cram as much as possible into the time available, I took out the soul. I took out the excitement that I had worked hard to get into the longer pitch. And I crammed in way too much detail. The 3-minute pitch, like the 30-second elevator pitch and the one pager I discussed earlier, should be all about excitement. You don't need tons of detail in the 10-minute pitch and you need even less when you go shorter. Remember, the point of a short pitch is not to get investors -- the whole point, the only point is to get people to want to hear more. So, I scrapped everything and re-created the deck from the top down -- about customer pain, the excitement of addressing the need, and what the solution looks like. In one case, I had a slide with eight long bullet points. The new slide is just a diagram, which I've also added (in a smaller size) to the longer pitch deck.

I don't know if a picture is worth a thousand words in a pitch deck, but sometimes it can be worth eight bullet points.

The One Pager

A business plan, an elevator pitch, a pitch deck -- the number of different things you have to have to successfully pitch your company is amazing. Now add in the one pager. Whether you call it that or an executive summary or a company overview, it's an essential part of the whole story. Like the one-page resume, you want a single, concise one-page document that you can hand to potential investors and business partners. There are lots of advantages to having it be a single page, but I'm only going to mention the most important one -- investors expect it.

To create my one pager, I started with my five-page business plan. I went through and highlighted all the most important stuff, then consolidated that in a new document which ended up about two pages long. Then I started looking for things to trim. I was pretty close to finished when I decided that I should make sure what I was doing was consistent with what I needed to submit to another competition, the Willamette Angel Conference (although I'll be at a disadvantage because Groupthink isn't an Oregon company, I figure the extra connections will be worth it). It was at that point that I realized I'd made a mistake. The Willamette Angel Conference uses Angelsoft, and the whole way it works is different -- your one pager gets created by filling in a form on the site. Here are the items you're asked for:

• One line pitch
  
• Summarize your business
  
• What specifically makes your management team most qualified to build this business?
  
• Define customer problem
  
• Describe the solution you sell
  
• Define your market
  
• List your current or potential customers
  
• Sales and marketing strategy
  
• Describe your business model
  
• Describe the competitive landscape and list your competitors
  
• Define your competitive advantage and list barriers to entry
  

Each of these items also has a longer explanation you see as you're filling out the form. For example, the explanation for "Define customer problem" reads: Investors fund pain killers, not vitamin pills. What critical customer need does your company address? If you are a web company, you may need to make a hard decision here on whether to talk about your audience or the people who will ultimately pay you (like your advertisers). You only get 210 characters to answer that one. When you're done, Angelsoft turns your information into a one page summary that looks like this sample:

At first, I was thrown for a loop, but then I realized that this was a much better way to do it. After all, investors looking at your one pager have a bunch of questions in their head that the'll use to decide if they want to read anymore. If you don't answer those questions, it's over. So the number one task really should be to make sure you answer those questions!

In the process of answering the questions, I managed to get in every one of my key points and pretty much nothing extraneous, but the document wasn't exactly what I wanted to best represent the company. For Angelsoft applications, I have to take what I get, but that's not true for NWEN or other investors. So, after I finished up the Angelsoft process, I took all the information and created a new document that I could edit. Then I made a few changes:

• Combined the one line pitch, business summary, and customer problem into a new opening section which read better than the three individual sections.
• Combined target market and customers sections.
• Combined competitors and competitive advantage sections.
• Added a little bit of additional detail in a few places where I'd been constrained by Angelsoft's character limits.
• Added a (small) illustration to help explain the product.

In each of the cases, I made the change to improve readability or punch. But, overall, it's a lot like the one pager from Angelsoft. You don't have to do your one pager like I did and your executive summary might be longer. Garage.com recommends two to three pages in this excellent article. But, whatever you do, keep these things in mind:

• The purpose is to sell your company to investors, not tell them everything about it
• You want to convey the excitement and the energy behind your business
• To the extent that you can, answer the questions potential investors will have before they ask them

It's Not A Zero-Sum Game

Although Groupthink is one of the twelve finalists in the NWEN First Look Forum, I don't know much about the other companies. One of the companies was founded by a couple of guys that I see every week or two. I'll confess that I don't know a lot about their business, but I do know a few things. They're sharp guys who seem to know what they're doing. They're working hard,. And they're nice guys. So, even though we're technically in competition with each other, we're not really competing. We've exchanged information and tips. And we've wished each other luck, sincerely.

The fact is that we're not really competing. Sure, we're in the same space and there are only so many investors out there, but, for the most part, it's not a zero-sum game. We can both succeed and each of us most likely loses nothing if we help the other. Far too often, we see people thinking that in order for them to win, others have to lose. You certainly see this between companies, but you also see it between groups (and even employees) within larger companies. Between the time I started this blog post and now, the Seattle 2.0 Awards got announced and Marcelo Calbucci of Sampa wrote this about the process: "The flip side is to find the people you thought were your friends, or at least acquaintances, working against you. Even if in a subtle way." It's disappointing to hear that, especially when it's about something that the folks at Seattle 2.0 are doing that is positive for the community. From my point of view, you have three choices: be supportive, be neutral, or be negative. No, you don't have to support everybody, but what's the advantage to being negative?

I'm glad to say that most of the Seattle Startup community is in the supportive and neutral category. There's a lot of collaboration and camaraderie. We can all win and grow our industry and community.

Let's keep it up.

And, to the other finalists in the NWEN competition, a sincere good luck the rest of the way.

Don't Forget Your Strengths

I've gotten a lot of advice on my slide deck for the NWEN First Look Forum competition. So much advice, in fact, that I followed it too well.

The first versions of my business plan and my pitch deck were so focused on the product, the technology, and all the cool things that we're doing for customers, that I neglected to talk enough about the business. I talked about how the technology scaled, but not how the business scaled. As one of my advisors said, investors will assume your technology will scale -- they want to know how the company can grow to be a billion dollar business. And I'd made the same mistake in other areas. The pitch deck (and the pitch that goes with it), initially had a lot less about the business side of the business than the business plan, so, off I went, removing technical stuff, and fleshing out the business side. It was looking pretty good.

Then, I went to my first coaching session with my NWEN advisors. We went through the whole deck and they gave me a lot of great feedback. When we were done, they asked a few questions, including a key one -- what's exciting about this? When I explained what I thought was exciting, they both responded, practically in unison, why isn't that in the pitch? It turns out that I had over-corrected, by a long shot. I had spent so much time working on my weaknesses that I had given my strengths short shrift. I wanted to make sure that everybody knew the business was solid, that I had basically left out what was exciting about the business in the first place.

In the final deck, I lead with the big vision and the long-term plan that is a key part of the excitement, then I segue to the first product and the customer pain that it's all about. The pain is a bit less exciting, but it's compelling. Elsewhere in the deck, I make sure to revisit the things about the business that I think make it really exciting. And, I try to talk about technology only where it directly relates to customer pain, solutions, or growth. The result is a significantly better pitch.

Why I've Been Quiet

You may have noticed that I haven't blogged much lately. There are a few reasons for this, all centered around the NWEN First Look Forum.

First, I've been very busy. From the time that I found out the details of applying for the Forum to the time that I had to submit my business plan, I had just ten days (plus three when they extended the deadline). In my case, I was creating a business plan from scratch. Fifty companies applied to present at the forum and NWEN narrowed it down to twenty companies. Next, each of us had to create a deck for a 10-minute presentation to take to our  "screechers" (screener/coaches) who were going to evaluate us and coach us at the same time. Fortunately, I'd already started a deck after the excellent pitch clinic from the Alliance of Angels that I'd gone to. That helped a lot. Even so, I walked out of my screeching session with a throughly scribbled-on presentation, having no idea if I'd made it to the next round or even when I'd find out. A week and a half later, I got an email saying I'd made it in and I had a new list of things I had to produce -- a deck for a 3-minute presentation and a 1-page executive summary. Plus, I revised the 10-minute deck and went back and updated my plan based on feedback, since I'll be using it for other purposes. So, not even counting things like meetings and seminars, I've been amazingly busy.

Second, while I was writing code and mostly doing development, writing a blog post was a great break. It was something different. You know, the right brain/left brain thing. But, now, when I'm spending most of my time writing and wordsmithing, writing a blog post feels pretty much the same, so it doesn't come quite as naturally.

And, third, although I've been very open since I started this company, I decided to be quiet about some details for a while. The reason for this is that there are some significant changes to the business based on lessons learned and I really want the Forum to be a real "first look." I want the potential investors in the room to be hearing the details for the first time from me, at the Forum, with my (hopefully) finely polished messaging. After the 24th, I'll be sharing more again.