It's time to talk pitch decks and executive summaries. Now, I want to tell you an important caveat before we got going, which is what I'm telling you right now. In 2018, is the way current pitch decks are structured and the way you currently pitch to a venture capitalist or funder. Five years from now, it may be very different. When I was launching my company 15 years, 10 years ago, instead of sending our pitch decks we would send out a 100 page business plans. So in 10 years, you might be sending out singing telegram, a virtual reality experience, some other method of doing this. So there's nothing about pitch decks in particular and executive summaries in particular that are universal or will always last forever. These are just a wave right now, a business described, and there may be future ways business described, and future ways that are very different from this. So given that caveat, let's talk about what you do today to pitch your idea. So as you learn in our prior lecture, for introductions you want to have an elevator pitch, that's a critical part of your pitching toolkit. But when you actually get in front of an investor and they ask you to send them more information, you will send them one of two things: A 10-12 slide deck which I'll go through in detail and the executive summary. The executive summary is usually two pages of material that summarizes the job from your pitch deck and describes your business idea in very clear terms. The evidence that why it works and the same other material that you'll see in the pitch deck that will describe. So for emailing out, for sending as a contact, if you want a pitch deck and an executive summary. That pitch deck will be fairly dense because it's designed to be sent, so the slides will have lots of details. But it's essentially the same pitch deck that you'll be presenting live, just a few more words written on it. So what are those 10-12 slides. I'm going to walk you through the traditional 10 slides of pitch deck. Again, this is socially constructed. If you are watching this in a country other than the United States, if you're watching this eight years from now, this format of this deck might look very different. You can decide looking at the evidence out there whether you want to use this approach or another approach, but this is the common approach that's used today. The first slide you'll be presenting is an overview or hook slide. An overview slide is one that lays out all of the details of your business idea much like an executive summary will do. This is primarily used when you're sending out your slide deck by email. If you're going to be presenting your slide deck in person, you'll usually use a hook instead. A hook is something you intrigued people about your product. So you can see an example of a hook slide up there. What's the most commonly used language in the world? Broken English. It's intriguing, it's interesting, the pictures are interesting. This is often where you'll tell your story about your business. But it's where you set up the idea that you'll then develop further on as your pitch deck continuous. So some overview or hook, a personal story, an amazing fact, something interesting to intrigue people about your product. Next, to introduce the problem. The problem slide tells people about what issue you're going to be addressing. There are many problems in the world and your customers might have many potential problems. The problem slide is your chance to focus your listener or your potential investor on the problems that you're actually interested in solving, and that your product solves better than other people. So there might be problems that your product doesn't solve, you won't bring those up here. You're going to bring up the problems that you're actually going to address. Here's some examples of various problem slides. So one example is simple statistics that show you how common a problem is. Another is this example of the problem slide, 500,000 people take or pick nursing exam every year, 50% of people fail at the first time around. That's a really great burning problem. In the bottom right, you can see an example from a real estate start-up showing you how complicated the current world of real estate is with all of these issues. So the problem slide sets up the problem that you're going to solve. The next slide is your solution. This is where you first introduce your product, and this is where you're going to show how you solve a problem. So once we introduce our procedure test-taking software, a 100% of people pass the nursing exam where only 50% passed before. When we introduce our product, look at how well we solve in the bottom right corner the issue of real estate transaction and make it so much easier. In the upper left, you can see an example of a physical product, and look at how great our solution works. So this is where introducing solution, the solution is tied to the problem that we're doing and directly relate the two. Then the last, the most critical first four slides is your technology or magic slide. The magic slide is a slide that shows you why you have a competitive advantage over anyone else in this particular space. So there's lots of potential examples here of competitive and technology and magic slides. This is a great time to show traction. So you can show how your product actually has faster traction, faster pickup than anyone else. So we talked about traction earlier that people are actually adopting your technology. You would show examples of your technology actually works. You could show some other example about why you have competitive advantage over other people. Next, do a market sizing slide. The market sizing slide is usually a top-up, top-down or bottom-up slides, sometimes it's both. Here, you're going to show that you have addressable market usually at least a billion dollars. If you can, you'll show something like your total Customer Acquisition Costs, your CAC, and your customer Life Time Value, LTV. If your Life Time Value is better in your Customer Acquisition Costs, then you're in really good shape. The upper-right corner that you can see it's actually the original AirB&B, Backwaters call Airbed and Breakfast pitch deck where you can see they showed you how big the market is for AirB&B and showed you some of the initial economics from an industry. So the idea of your market sizing slide is to show that your market is attractive and will be large enough to be of interest to potential investor. The next slide is usually your competition slide. There are really two common ways to show competition. The first of those is to have a chart, and a chart like this, chart from the original Dropbox pitch deck that you would see in the upper left. We'll show a variety of potential features, our competitive advantages that your product might have. It might be faster, it might be cheaper, it might be easier to use, and you'll show all green check marks for your product and a mix of green and red check marks for other products that are your competitors to show that you satisfy all these needs that your customers have and then other people don't. Now, notice that these needs need to line up with what you've introduced in the problem solution slide. So there are many ways your product might compete with other people, and your competitors are probably better than you at some dimensions. Maybe they have better customer service. Maybe they have more colors that you can pick from. Maybe their tastier. But what you've done in your problem slide is help set the ground for the competition so that it matches the kinds of things that you excel at. You're going to tell people that the problem isn't an issue of taste or customer service or color, the problem is about speed and about cost, which are the things you excel in. So you're taking those themes for product and solution and you're moving those through the competition. The other way to do this is to pick two dimensions of competition, say, speed and cost, and then show a pseudo graph where your company is in the upper right corner because you're the only people who have the fastest and cheapest and everybody else is somewhere else. So the competition slide helps show why you're beating your competition. It's important to include as many competitors as possible because your investors will certainly know if you're leaving out competition and it will look suspicious. So you want to take your competition head-on and show why you'll be able to beat them. The next slide is you go to market slide. This is going to show how you're competing with other customers in the space. What's your customer acquisition strategy? If you have tractions and another great time to show a traction and to show that you actually have customers who are buying your product already. In analyses of what slide investors spend the most time on, the answer by far is this team slide. The team slide is the one where we see the most possible investor time, because they want to see whether or not they are interested in investing your product, and team is among the most important factors in making that decision. So your team slide will tertiary show hedged shots of your company members, titles, and then something about their achievements or why they're good at solving a particular problem. Next off, projections. Your projections of financials. You generally don't want to have a pure numerical slides. Some sort of graphs showing your burn rate, your revenue over time, that shows an exponential is really good here. Now, you will want to have more detailed financial models, those will come up in discussion, but there may not be something that you talk about directly in this slide. Then finally, roadmap, milestones, and asks. So roadmap would typically show where you are currently and what you're going to do in the future. Usually, you want to show roadmap for a year about a third of the way through. Your roadmap may have many milestones in the future, but you're going to show what you're going to accomplish. You may also have an ask. What money you are trying to raise? What you're trying to accomplish out of this meeting? So you're summarizing things with either a roadmap or an ask or both. So that is the 10 slides that you'll traditionally used in a pitch. When you send them via email, they'll have a lot of words in them. Face-to-face so use the same 10 slides, but that might have more graphics, less words so they're more compelling to present. You'll also likely have some demonstration of what you can do. The demo is traditionally done right around the third or fourth slide. So usually around the magic or solutions slide, you'll show the demo of what you can do. Now, that demo can be anything from a prototype, a video, an actual walk-through of your product, customer testimonials, but something to show that your product is real, makes a huge difference in convincing people to go with your idea. So the last piece of advice. When you're pitching, make sure you know your audience in advance, so when you pitch to them that you are making a connection with them and that you understand their technology level. You're not talking over their heads, but you're also not talking to them to amateur level. Hook them quickly. Some sort of an intro or hook, some sort of demo early on is very powerful. You want to demonstrate and show what you can do more than tell. So if you can show examples of your products, show prototypes, show MVPs, very useful to do that here. Be prepared for questions. Usually, this turns into a conversation when you're doing a pitch, so you might not get through many slides before you start having divergent conversations. So you may want to have extra slides prepared to allow you to go deeper into other topics or have some other method of interrupting your flow and being able to get back to it later.
