All hands on the deck, give your ideas the best chance at success.
We’ve all had ideas about ‘the next big thing’, be it an on-demand service app or turning your kitchen into a chilli-jam factory. Most of the time these ideas just stay ideas and at times come out at a dinner party after a few drinks. “That’s amazing, why don’t you just start it!?” is the reaction you’ve probably heard over and over again. But as the party-goers fade so does your determination to bring your idea to life, for a number of reasons, from your full-time job to lack of vital skills needed for your business – Especially if you have a technology idea with no development knowledge.
The key to getting any idea off the ground is ‘buy-in’, buy-in from your target audience, the media, business partners and potential investors. An investment injection can be the boost you need to give your idea legs or take your current startup to the next level. But the biggest buy-in of all has to be yourself – you need to back your idea 100% even in the face of critics. When in doubt, remember Steve Hartman, the inventor of the pool noodle is now a multi-millionaire…
Time to Execute
The first thing you need to do with your idea is to write it down, yes you heard right simply write your idea down or draw a picture no matter how crazy it might seem. There you go, you’ve turned and idea into something tangible on a piece of paper. You’re already winning compared to all the ideas floating in space. You should be able to write what the business does on the back of a matchbox, short and sweet, for example, DropBox – secure file sharing and storage. Airbnb – an online marketplace that lets people rent out their spare rooms to guests.
The next thing you need to do is formulate your idea into a document that will allow potential investors to see the value and scalability of your business idea. This can be done in the form of a pitch deck.
At first new entrepreneurs want to provide potential investors with as much information about their business as possible. Which is the wrong approach – the detailed information can be formulated into an investment memorandum once you have interested parties wanting to know more. Keep it simple stupid, so simple it is clear as day for anyone to see your golden ticket even if they don’t have a business degree. Keep it short, around 10 – 20 slides. Don’t try stick to a template adjust your content to what makes your business shine, for example, if your idea is a website you might want to include more screenshots and you don’t want to be limited to a template. Keep slides with minimal text, not more than 40 words, with data visuals to get your ideas across – try stick to 1 or 2 concepts per slide.
Your pitch layout – Choose a software you are comfortable with, PowerPoint is a firm favourite but if you want to get creative you can look into online tools/presentation software such as Prezi.com or craft a professional layout with InDesign. But also with the design, keep it simple-stupid with bright colours and visuals that keep the reader engaged wanting to learn more. This is a chance to highlight that you have already thought about brand consistency and look-and-feel. But what counts more than design is the content. The good news is that there is a set structure for how to present your content:
1.) The Cover
The front page sets the tone for the entire presentation. Include your logo, tagline and a visual that shows your product or services in action.
2.) In a nutshell
The first slide sets the tone for the entire presentation so that the reader feels they already understand the business as they go through each slide. Your product/service offering needs to be reduced to one or two sentences – make it memorable. When you talk to this slide you need to give an elevator pitch. So if you were in a lift for one minute with a potential investor what would you say. 1, 2, 3 go!
3.) The Problem
Companies only exist because they are serving consumers by fulfilling a need. What problem is your idea combatting in the world? It can be more than one but doesn’t need to socio-economic to be meaningful. For example the pool noodle: There were no affordable, long lasting, fun pool toys in the market – big problem. Airbnb’s famous simple pitch deck also acts as a perfect example. The Problem: Price is a (they had a grammar mistake in their deck but who cares) important concern for customers booking travel online. Hotels leave you disconnected from the city and its culture. No easy way exists to book a room with a local or become a host.
4.) The Solution
The solution slide will directly relate to how you plan to solve the problem. If we look at Airbnb again we can see the solution clearly stated. Airbnb Solution: A web platform where users can rent out their space to host travelers to save money (when traveling), make money (when hosting) and share culture.
5.) Market Size
The market size is the number of potential buyers that will benefit from your solution. This is a great slide to include some statistics around buyers of a similar product/service and interesting facts around the growth of your industry. It shows validation for what you are offering and proves that you have spent time studying your target audience.
6.) The Product
This is the drumroll moment when you present your product or service. If you are still in the idea phase you can show a prototype, drawing or MVP (minimum viable product). Include screenshots and show your product/service in action. A great way to showcase your product is through a customer journey of using your product – you can tell a story and get creative but remember more visuals than text. Keep it real and engaging.
7.) Your Business Model
The most important aspect of presenting around your business is how you intend to make a profit. What costs are to execute and what your growth projections are for the future. Prove that your business has the ability to scale by providing a 3-5yr revenue and profit forecast.
8.) Market Adoption
So you have an awesome product and lots of people ready and waiting for you to make their lives easier, but how are you going to reach them? This is your go-to-market strategy and any unique tactics you intend to use to market your business.
Most people cringe when they have to talk about their competition but this is good if there’s competition there is a need. Every industry is innovating every day, no company is safe so don’t be afraid of your competitors, learn from them and build on their foundation. Remember for this slide keep it simple and list your competitors and what they are doing right and wrong.
In Guy Kawasaki’s explanation of a pitch deck, he calls this your underlying magic. This is your competitive advantage that sets you apart from your competitors and wows readers just before viewing your financial standing and investment requirement. Get them hooked on this slide.
11.) Financial & Investment Requirement
If your business is operating list your revenue to date and your estimated company valuation. There are many different formulas to determine your valuation but you have to find the right one for your business. Calculations range from asset and liability formulas, future growth forecasts to the rule of thumb being four times your company’s positive cash flow at the end of the financial year. So if you made an R100k profit this year your business is worth R400k. You can then work out how much equity you are willing to part with for how much. Be sure to indicate how you will be using the investment to meet your business model forecasts.
12.) The Team
The investors on Shark Tank and Dragon’s Den have stated countless times that they’ve gone in on an investment not for the idea but for the founder/team. Your biggest asset is your team and the skills you bring to the table to grow a successful business. Don’t be shy, highlight your team’s strengths, experience and their roles in making the company a success.
13.) Timelines and Forecasts
End off by showing you have a plan. You know what you need to do, when you need to do it and where you want to get. All guns are loaded but you just need investment capital to pull the trigger.
The back page is where you thank readers for taking the time to review your pitch and provide your contact details for any further queries. If you are presenting in a meeting you can open up the floor for questions. Don’t be hard on yourself if you don’t have all the answers this is a chance to gain valuable feedback on your venture.
Your initial deck is a snapshot into your idea and should leave readers feeling excited and eager to know more. It is a taster and not the whole course. You don’t want to give too much away about your business before knowing your audience is serious about taking a stake in your business. Keep at it, no idea, no matter how crazy-good, is going to work unless you’re willing to roll up your sleeves and invest the time and do the work.