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How and what to present to a VC

The most-often asked question - "what should I put in my powerpoint presentation" for the all-important VC meeting?

Guy Kawasaki profers his advice, and worth noting as it is simple enough:

I am trying to evangelize the 10/20/30 Rule of PowerPoint. It’s quite simple: a PowerPoint presentation should have ten slides, last no more than twenty minutes, and contain no font smaller than thirty points.

While I’m in the venture capital business, this rule is applicable for any presentation to reach agreement: for example, raising capital, making a sale, forming a partnership, etc.

Ten is the optimal number of slides in a PowerPoint presentation because a normal human being cannot comprehend more than ten concepts in a meeting—and venture capitalists are very normal...

If you must use more than ten slides to explain your business, you probably don’t have a business. The ten topics that a venture capitalist cares about are:

1. Problem
2. Your solution
3. Business model
4. Underlying magic/technology
5. Marketing and sales
6. Competition
7. Team
8. Projections and milestones
9. Status and timeline
10. Summary and call to action

You should give your ten slides in twenty minutes. Sure, you have an hour time slot, but you’re using a Windows laptop, so it will take forty minutes to make it work with the projector. Even if setup goes perfectly, people will arrive late and have to leave early. In a perfect world, you give your pitch in twenty minutes, and you have forty minutes left for discussion.

He finishes with this tip about the "thirty points,"  - I offer you an algorithm: find out the age of the oldest person in your audience and divide it by two. That’s you’re optimal font size.

You know, I noticed something missing that I always tell people is absolutely vital, coming from the point of view that the VC is there to make money, "its not about you, it is about how much money you want from me and how much and when I will get it back".

So I tell them to include two key items: (1) the ask - how much they want, and (2) the payoff - how much the VC will get back, and when.  In fact my list is shorter than Guy's:

1. The Market and How Big it is and How Fast growing
2. Your Offer and Technology Advantage  - IP, sustainability
3. Why people will Buy it and How (direct, indirect, margins)
4. The Team and their ability to deliver
5. The Ask and the Payback for the investors
6. How you're going to Spend the money and how the VCs can Control it
7. The Risks and your Mitigation
8. The Financials

Call and I'll explain these points in detail and give you more tips about how to make a winning pitch to a VC. Fee US$1.00/minute.

Also explain how you are going to succeed when you get less money and everything takes more time than you imagined - the Last Man Standing Strategy.

That's a nice 20 minutes with time for a quick wrap at the end.  Give them some time back. They'll be pleased, and if they want you to stay they'll keep you talking.

And I advise the 3/6/12 rule - no more than 12 slides, with no more than 3 points on each slide and no more than 6 words in each point.

But for all the process, what does it boil down to?  It boils down to "suprise them", tell them something that really gets them out of their seats - make a bold move and show them how you are going to pull it off.

Otherwise, you're going to be another of those that are killing Guy:

As a venture capitalist, I have to listen to hundreds of entrepreneurs pitch their companies. Most of these pitches are crap: sixty slides about a "patent pending," "first mover advantage," "all we have to do is get 1% of the people in China to buy our product" startup. These pitches are so lousy that I’m losing my hearing...

Go for the "surprise me" factor, and give Guy back his hearing.

PS. Don't tell then its unique, because they'll spend the rest of the presentation time trying to remember where they heard that it is already being done, and being unique hardly matters unless you can tie up all the IP and can defend it.

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What's your best content and order for a VC presentaiton?  Post your Comments.  How can I help? Email me; Call (Australia) +61 403 345 632 (direct); +1(817) 382-4453 (SkypeIn USA); +852-8199-0189 (SkypeIn HK);

"We hired Walter to complete a technology audit, but he gave us much more -- he has the ability to identify business opportunities that benefit all sides, creating networks of customers, suppliers, investors and intermediaries. His breadth of knowledge and willingness to push himself beyond the brief are tremendously valuable." Zenon Pasieczny, Director, Saphet Capital Management

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Australians heading the world's biggest online Xmas

Perhaps unexpectedly Australia ranks as one of the highest in countries of a recent survey for online shopping and purchases - not in absolute $$$ but in terms of percentage of the population that feel comfortable, and execute, purchases across the internet - "Australians one of the world's biggest purchasers online".

The survey found that the vast majority of Australian Internet users (87%) had made a purchase over the Internet, compared to the global average of 77 percent and 70 percent regionally.

What was also very interesting to me was that the older segments of the population, 35+, were also very comfortable and active purchases across the internet.

Estimates of this Xmas shopping through the internet for Australia range around US$1 billion, of a total Xmas spend of about US$20 billion, and around 2.3 million people are expected to purchase across the internet for Xmas out of a total population of 20 million people.

Xmas spending represents about 11% of Australia's annual retail sales.

Although internet purchases are only 5% of the total, about 30% of Australian purchasers use the internet for researching before making any purchase.

This boom in internet shopping has helped eBay Australia more than double its gross turnover and it is on track to hit $1 billion in 2006.

Technorati Tags:
Internet shopping eBay Australia ecommerce Australia XMAS online

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How do you think that online shopping can become totally maintream - what are the final hurdles to overcome?  Post your Comments.  How can I help? Email me; Call (Australia) +61 403 345 632 (direct); +1(817) 382-4453 (SkypeIn USA); +852-8199-0189 (SkypeIn HK);

"We hired Walter to complete a technology audit, but he gave us much more -- he has the ability to identify business opportunities that benefit all sides, creating networks of customers, suppliers, investors and intermediaries. His breadth of knowledge and willingness to push himself beyond the brief are tremendously valuable." Zenon Pasieczny, Director, Saphet Capital Management

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Webex's Secret Weapon - Passion

Prior to hearing Min Zhu speak at the ATRE2004 Conference in Shanghai I had my doubts about the sustainability of Webex's high cost service hosted model. Zhu is co-founder, president and CTO of Webex. In Shanghai the constant attention of especially admiring Chinese made it impossible for me to casually swap business cards with him since to interrupt for no other reason seemed lame.

His presentation was brilliant and caused a major reposition of Webex in my mind and in my admiration. Zhu is driven by his pride in being mainland Chinese and in his vision of the convergence of software, IT, telephony, television and content. He almost jumps out of his skin when talking about it in the same way that he says Bill Gates jumped out his chair when they met 2 years ago and hit upon the topic.

In particular he sees a convergence of the wireless ecosystem and the TV ecosystem, especially digital TV, creating a huge value-added service industry. Comparing the global PC population with the cellphone population, being about 900m PCs and about 1500m cellphones, leads Zhu to believe much more in a wireless cellphone DTV kind of future than one tied to the PC. He is driving a revolution towards a vision of anyone anytime offering their own "TV" channels - multi-way digital video production and communication as a ubiquitous service.

Zhu characterises the large telcos as wanting "to monopolise all the services" in the value chain, including hardware and software and content, but doesn't believe that they have the capability or the talent to achieve such dominance. For example, AT&T and BT both spend a large amount of money and time attempting to define multipoint broadcast standards, but both gave up and both now endorse Webex.

As for Microsoft, Zhu make a compelling point that Microsoft is hopeless at service. Noone can write off such a hugely profitable company with $60b in the bank. But Zhu's comment is so patently true - that Microsoft are just totally impossible to deal with outside of their software distribution channels. You know that this is true if you have ever had a problem with Hotmail for example - they make it just impossible to contact anyone for help and I guess that 90%+ of people just give up. If you have a program error - like my recently installed bluetooth mouse which suddenly started having "point32.exe terminated in an unusual way please contact the application's support team" - there is nowhere to go. What does "the application's support team mean?", where do you go? (And when you get there by the way it will tell you that you that nothing can be downloaded, that you have to reinstall from your CD.) So the only way we get Microsoft service is through friend's children who offer to fix things for $10/hour. In my recent case I just uninstalled the bluetooth mouse and threw the whole lot in a bottom draw as a waste of money.

Webex believes that service is an integral part of of a successful conferencing offer, not just the software. And Zhu is right - at the moment this is clearly beyond anything that Microsoft could offer. The telcos think that they could offer it, but if you have called directory service lately or the help desk for your ADSL connection then you will certainly be sceptical of their ambitions.

Belying Zhu's strong tecnology background, he scorns technology-driven innovation and pushes Webex to be demand driven - to be a totally customer-facing services company. And because he also challenges his team to think about a future where the cost of such services is zero then he is setting the scene for constant evolution of the Webex business model and for its continued success.

After hearing him up close I'm now certain of that continuing success - driven by insight, knowledge, vision and passion - in whatever future business shape that success might be delivered.

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How can I help? Email me; Call (Australia) +61 403 345 632.

Spiral of Innovation Leads Sharp to the Top

Sharp Corporation recently announced a 174% increase in profit, and with global demand soaring for its camera phone products it is riding a spiral of success of its own making.

Not many years ago Sharp was thrown out of NTT Docomo's office when then took along a prototype cell phone which had its own camera. Docomo used the killer question "Why would anyone want a camera in a phone?", sending Sharp's Hideaki Kamitsuma scurrying to Vodafone (J-Phone) with an offer. The rest is history and Sharp later that year received a call from Docomo proposing a handset design with a camera. Sharp is now firmly implanted in the elite group of Docomo handset suppliers from which they were previously excluded.

Sharp's success is no mere technological fluke. Sharp was late to the cell handset market and decided that it could not compete globally with the likes of Nokia with a "me too" strategy. So they devised a technical strategy and a business strategy to enable a new business model aimed at market leadership in handsets.

The Technical strategy was a "sprial strategy" using their own in-house devices to deliver a competitive edge - displays, cameras, LEDs, flash memories, CCDs, ICs etc. The trick was to integrate in-house technologies from its various divisions to produce a new line of business. The Business strategy was to partner with operators by offering exclusive models. This was challenging because Sharp was not a Docomo handset partner and that group was closed, and therefore it had to rely on a major player outside Japan and the second-tier operators in Japan to get a break.

Sharp developed its breakthrough with the camera phone. The success of that phone catapulted it into the world markets and it then applied a second string of its Technical strategy. This is that the "firsts come fast" and to be #1 in the market with new features. By building up customized applicatons on top of the lastest protocol stacks in the handsets Sharp now has an incredible track record of introducing new features to the market.

An important second level part of the Sharp Marketing strategy is to first implement new technologies in higher tier models, and then transfer them to mid and low tier models. This complements another element of the business strategy whereby customised handsets are produced to an operator's requirements but only for time-limited exclusivity within their territories. Thus Sharp can roll out proven features in other markets and leverage their investment many times over.

Starting from a set of discrete lines of technological innovative businesses Sharp integrated a clever set of new Technical and Business strategies to build a very profitable global line of business in which they formerly had no presence. In essence they came from being an outstanding component supplier to being the widely acknowledged leader and innovator in the global cellphone handset market. An outstanding achievement based on core technology strengths and clever business design and execution - and beginning in a home market where the dominant buyer had a closed door.

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More on Industry Strategy and IT/Telco Services at www.digitalinvestor.com.au

Related Free White Papers at Digital Investor:
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Asian Broadband Cooperation to Lead Standard-Setting
Outsourcing Publications Sourcing Strategies at Digital Investor
Related Blogs: (see Categories, top left)
Sourcing Strategies for Telco IP Core Network
Can Your Trust China with Your Software IP?
How and Why India's and China's World Class Outsourcing will Continue to Grow
China's Own 'Goldman Sachs' - Not Just a Nation of Cooks and Engineers
Venturing into China in IT Investments

What's your take on Sharp's Spiral of Innovation Strategy, do you think that it is sustainable? Post your Comments.

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How can I help? Email me; Call (Australia) +61 403 345 632.

What is Multimedia Convergence and a Media Server?

A potential investor in a multimedia convergence appliance vendor asked me to meet the company – Azurn International. He had a personal connection with Azurn but could not clearly understand the offer and the market they were addressing.

When I met the company I could see that although their marketing message was confused the underlying technology and the positioning of the first product was very powerful. They asked me to work with them to explain it in an appropriately simple way, with a business focus.

I readily agreed, but in hindsight too readily. When it came to producing a succinct business-oriented explanation of the underlying technology I found myself having an embarrassingly large number of false starts.

I wanted to produce a jargon-free two-page overview that showed the bigger vision and also described the first product, while at the same time positioning the first product for a series of easy extensions.

Azrun's Multimedia Convergence Platform (MCP) combines the advantages of SIP, the Session Initiation Protocol, a signalling protocol for Internet conferencing, telephony, presence, events notification and instant messaging capabilities, with XML.

While almost all early adopters of SIP technology have developed IP-PBXs and related products for the evolving VOIP market, Azrun has focused on the development of its patented Universal XML (UXML) technology. This is a powerful advantage because XML is rapidly emerging as a universal language for information exchange - a "linga franca" that will enable the sharing of data, media and business information from any source.

Azurn's MCP connects with all these sources and then manages an integrated and coordinated stream of such information with diverse communication channels and end devices e.g. PCs cell phone, landline, PDAs. By focusing its first MCP product release on an in-house conferencing appliance Azurn is leading the trend for corporates to cut the cost of conferencing by installing in-house systems within the firewall.

As part of my report I set out a side-bar to explain the difference between unified messaging and the Azurn convergent switch, and the idea of the in-house appliance, and what multimedia means in this context (such things as voice, email, instant messaging, interactive TV, video, and any form of data from applications and databases).

Then I led in with today's non-convergence problem i.e. information and communication tools are fragmented and not synchronised - cell phones, voice mail on cellular and enterprise networks, email, instant messaging, conferencing, office phones, and the Internet.

Then, after validating the causes of the above problem, I positioned the Azurn media server as the glue between enterprise business applications and the multi-modal forms of business communication that are in common use today (and those coming in the near future).

I also noted the particular attraction of Azurn's (UXML) integration layer, which enables rapid interfacing to all forms of corporate information and media.

"By installing the Azurn system in-house enterprises enable communications functions to be embedded into business applications to enhance workflow. There are few other such devices targeted at in-house deployment."

In wrapping up the Summary I boxed a few key issues on the border, including the issue that "businesses want solutions that support mobility, workforce flexibility and productivity, different ages of technology, standards-based interfacing with corporate business systems, and support for business workflows".

Whether wisely or not I don’t know but I kept away from the well-known SIP feature of presence. The term itself seems to cause confusion and maybe because it generally relates to people being absent from their normal communication devices and what to do about it. It is a useful term to keep out of a business discussion of multimedia convergence.

I also kept away from VOIP, IP-PBXs and such other SIP-related applications since again they do not fundamentally help explain the concept of multimedia convergence - they are sidebars.

Multimedia convergence is powerful, and explaining its vision is quite challenging - at least for me!

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More on this and related topics at www.digitalinvestor.com.au

What's your vision of multimedia convergence and the vision for media servers in corporate communications? Post your Comments.

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How can I help? Email me; Call (Australia) +61 403 345 632.

Why Google Adwords didn't Work for Me

I received an enquiry from Anton Groeneveldt, a partner in BlueSouth "Global Web Solutions" of South Africa, about my experience in using Google Adwords.

This is what I wrote back to him:

"Anton, here is my summary of my Google Ads experience.

The management system itself is extremely good. Very easy to control and monitor and fine tune.

The results, for me, have been extremely bad, and later I will give my explanation.

So far, I have had three enquiries. The first was just 3 days before yours, a guy from Ghana who enquired about broadband (I advertised one article on Google starting 3 weeks ago) and gradually turned his enquiry into the famous V-SAT scam! I blocked him.

The second, 1 day before yours, was a guy who wanted to use part of one my broadband articles in a paper he was writing for a university magazine in the US.

Then came yours.

In total I have been running adds since Sep 3, 2002.

I have spent US$1051.71.

There have been 1058 hits from 182255 ad impressions, giving an overall hit rate of 0.5%.

The average price per hit is US$0.99.

I am running 14 different campaigns, with 2 inactive now, and 4 more which I have run and deleted.

Over the long run, my best campaign hit rate averages 0.9% (3460 impressions so far) and my worst 0.4% (over 70,000 impressions exactly!).

In the short run, say over the last 7 days, I have best hit rates of 5.8% and 2.4% for my two ‘leading campaigns’.

A well-tuned set of keywords, in my experience, will run at 2.2 to 4.3 clicks per 100 impressions. A well-constructed ad, in my experience will have a click-through rate of around 4.5%, although of course in the long run the rates for ads and clicks per impression must converge.

I have had some ads run at 25% click-through for periods of a couple of months.

So the BIG QUESTION, why no business from the 1058 click-throughs?

The answer - because my web pages, BY DEFINITION, don’t sell.

That is, at the end of the day the material has to prove attractive, relevant and compelling, and mine clearly does not do that. That is the big lesson of search engine placement, if your site does not sell then you are wasting your money.

I would have been better off, in hindsight, paying someone $1000 to re-write my site into a site that sells, and then activate Google.

Kind Regards, Walter".

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Go to my website and take a look for yourself www.digitalinvestor.com.au:

What do you suggest to improve the selling performance of my site? Post your Comments.

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How can I help? Email me; Call (Australia) +61 403 345 632.

How to Build Your Linkedin Business Network

Building an effective Linkedin™ Network takes more than simply importing your Contact List and bulk mailing.

Ironically, Linkedin provides a bulk Outlook import tool, but also issues the following suggestions about who to invite:

Only invite those you know well;
Only invite those you trust;
Only invite those you want to forward things to you.

If I am typical of a business user and their Contact List this means that you would only select about 20% of the Outlook list that you have bulk imported to send invitations to join your Linkedin Network.

How do you build your Linkedin Network if you can't leverage most of your Contact list?

Download this complete blog including comments from Konstantin Guericke, one of the co-founders of LinkedIn - 5 pages, PDF

People Fall into Two Groups

To build your Network sounds simple, but I have seen the majority of my colleagues fall into two categories of people when facing the task of building their Network. The first group simply bulk mail with the standard invitation, and tell me that they had a poor response rate and doubt the usefulness of the system.

The second group firstly tell me that my type of consulting is different to their line of consulting and therefore Linkedin probably does not suit, and then when pressed they admit they don't know how to start to invite people. They fear that the people they approach are too busy and will see no value in being part of their Network.

My response to the first group is that the Linkedin system is not the problem - rather, their approach to building their network is the problem.

To the second group, I firstly ask how they build their business if not through contacts, and that is the purpose of Linkedin. Actually when they tell me that Linkedin does not suit their style of work I usually ask them what they are smoking over there! I mean are we on the same planet here or not? I then go on to (1) agree with them that people have to be convinced to join, and (2) this takes investment and effort.

What Does It Take?

What it takes is an operational approach to how to get the networking done.

This requires more than the guidelines given by Linkedin at the site. In fact the guidelines are a little simplistic for this following reason: you can use Linkedin as a wonderful opportunity to build a very powerful network of new and influential people, where they reflect the trust of others, but where you may not know them really well yourself when you want to invite them.

Here are the operational steps that I recommend:

1. START WITH AN OBJECTIVE

Think through what kind of network you want to build, and why, and why this will build your business and attract others to be a part.

For example, you might want to build a network of the world's leading thinkers in shared services and the cultural change and service model orientation that is needed to make shared services successful. Write these elements down and think about them - map them on paper as visual links, whatever, get them clear.

2. SELECT YOUR CONNECTIONS STRATEGICALLY AND INVITE THEM TACTICALLY

Now, you probably know people in the field of your newly defined objective, but when you look over your Outlook Contact List there are not many that really suit the new purpose. This is where you have to do hard research.

Firstly, mark the people that you know are best in the field, and then get into Google and research all the leaders and opinion-makers that you don't yet know (or don't know you!). Work hard to find desired people and the responsive people, and the people who you believe would accept your invitation. Why would they accept if they may not know you, or hardly know you? Because you follow the following two steps.

3. WORK HARD ON YOUR PROFILE

Next, set to work on your Profile. This is maddening, and blinding from staring at the screen and the words for too long, and difficult - but you must get it aligned with your new objective. That is, get your Profile fit for purpose.

Don't make the mistake of thinking that a general profile will do. Your Profile has to motivate your potential new members who you want to be influencers and leaders in your sector.

The more time you put into your Profile the better result you will get. The more time you put into the Headline of your Profile the better result you will get - this Headline is what is seen by others when they search through visible connections.

4. SPEND AS MUCH TIME AS IS NEEDED ON EACH INVITATION

Preparing invitations is a little different to the work needed on the Profile.

For some people, who you know well, you only need a simple quick invitation. For others you need a carefully crafted and personally appealing invitation. Afer all, some people have large egos, some people have a compulsive need to network, some people are keen to be recognised for their powerful position - make the invitation sing to the invitee. If you are building a new business network to suit your well-thought-through objectives then this is essential.

To build a good strong network with worthwhile objectives, if my experience is a guide, will take you 100's of hours.

Next you move to the most tactical step, and the one not written about in the general guidelines on building your network.

5. INVITE PEOPLE IN ORDER OF INFLUENCE

This is not a rock-solid rule or tactic, because you can invite many colleagues and 'lateral' influencers in a near random order.

However, if you want to build a strong new network then you have to think carefully about the order of invitations. Don't rush because you are impatient or excited. The most effective way is not always the direct way.

It works like this. If you really want person A to join, because A will lead to a worthwhile relationship aligned with your network objectives, but you know A to be relunctant, then target person B who is respected by A. Research B, and work out if B is likely to join directly, or whether you might have to even target person C in order to attract B in order to attract A. In my network building I had many such instances.

Then painstakingly craft an invitation to C, then include their acceptance into your network in your hand-crafted invitation to B, and then the acceptance of C and B becomes part of your invitation to A.

Also, think about those relevant contacts who are good networkers and make sure that you invite those early, and in the best sequence as described above.

What Not To Do

Here's what experience taught me not to do:

Don't invite your friends into your business network;
Don't invite your old colleagues and people from your old firm - because if you do they will keep your business network tied to the past and not aligned with your new objectives;
Don't invite people who are not going to build their own network; and
Don't accept invitations too easily from people wanting to link to your network.

Aim High

What you should do is aim high. Aim for the most strategic network objective that you can think of, and aim for the people who are hardest to get into your network.

By doing this you build and even multiply the power of your business network, and Linkedin is the best tool I know to help you do it.

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You should invest in and coordinate these three marketing tools to most effectively represent your business on the Internet and grow your network:

1. Your Website - for reference presentation, methodologies and articles, and coordinated email marketing;
2. Your Linkedin Membership - for an effective and efficient networking tool;
3. Your Blog - for interaction and mind capture in your field and for expanding your influence.

How did you build your Linkedin Network and what did you learn? I'm interested to hear about your experience. Post your Comments.

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How can I help? Email me; Call (Australia) +61 403 345 632.

From e-Visionary to Chief Storyteller

When I first met Mike Wittenstein he was e-Visionary at IBM Global Services, and now he has translated vision into practice at his start-up STORYMINERS™ where he is Chief Experience Architect.

There is no doubt that Mike is both a visionary and a great storyteller, you just have to spend 10 minutes with him to discover that.

Mike and recently caught up on the phone and discusssed his new vision.

At STORYMINERS Mike and his team are responding to his own experience in seeing great ideas and brilliant consultants fall flat in execution for their clients. What's most important to Mike are the quality of how things get done, and the customer experience.

Mike's mision is to help customers simplify marketing down to a story, and strategy down to design - a operational design-based approach to how things get done.

If you're interested in delivering an exceptional customer experience, and having the customer tell the story, then STORYMINERS is worth a look, and call Mike.