Why 10 slides, 5 minute pitches and one pagers really matter
Fred Wilson wrote a good post recently on the optimal size for a slide deck. His thesis was skip the slide deck and do a great demo.
I believe in demos, mockups, product samples or any other devices entrepreneurs use to enable investors to understand what you are selling. The more actual the product is, the easier to get people (including investors) excited. But, this post is NOT about the optimal slide count or pitch length for investors. Rather, it is about building a successful business. Wooing investors is great, but ultimately selling a lot of product to customers is what makes a business succeed.
The 10 or 6 or 3 slide deck (as opposed to a 30 slide deck) is important because it forces entrepreneurs to think concretely about their business. Early stage business is about efficiency. Doing the few things (maybe one) really well and delighting your customers with the things you do. The 5-minute pitch or 10-slide deck forces hard, yes or no decisions and effectively drives the business forward.
Should we be spending time/money on marketing, building a demo, and finding investors? Should we be courting manufacturing partners and sales partners? Whom should we hire or fire? All of these questions become much easier to answer when you have a crisp definition of your business.
In my first startup, Vert Inc, we decided to revolutionize the advertising business by putting sun-light readable color displays (TVs) on top of taxi cabs.
Several years ago, we delivered geo/time/demographically targeted out-of-home advertising. When we started, we were going to be a media company, an advertising company, an Internet software company (when software development took multiple man years). We would design and build hardened display systems to show video ads on top of taxis (a brutal hardware environment). Oh yeah, we also had to develop relationships and rent taxi roof top space from tens of thousands of unaffiliated taxi owners.
Dynamic taxi advertising. Big concept, lots to do, so where to start? About 6 months in to it, almost running out of funding, we had to narrow our focus, to define sharply what we wanted to be when we grew up. We had to do the one pager (OK, closer to 5) and to figure out our go-to-market strategy. We decided to build the network, the display boxes and software, but to leave the selling and recruiting of taxis to someone else.
It took a couple more years to close a deal with Clear Channel to be our exclusive domestic partner, but we had a well articulated path to follow and we could focus on building great software and super rugged hardware. We got our A investment round, but we also got some focus. From this, we identified the problems we had to work on, the features we needed to add so we could walk into a VC or potential customers, show off our demo taxi and efficiently explain how we were going to grow the business.
Today, I am working with a promising young company, SmarterShade, facing similar decisions to the ones I managed through at Vert. They have award-winning window dimming technology, have won multiple business plan competitions and secured other non-dilutive funding.
With all their success, they are still sorting through the really hard questions about the business. Are they a technology licensing company, a film company, a commercial window company, a window accessory company, industrial window company, selling other dimming glass solutions?
These are all great unanswered questions. Since they are unanswered, it is hard to figure how to optimize their time. In the near term they are all about getting increasingly better demo units built, but they struggle with their mid-term focus, developing relationships with film manufacturers, courting window companies, talking to shade companies, exploring new markets for the technology, getting something into the market, even if it is not the endgame.
Because Smarter Shade has a great team and good advisors, they will sort through all of these issues; the really hard work is to get to the essence of your business and then efficiently describe what you are doing in 10 slides, 5 minutes or one page.
When I see the crisp 10-slide deck from Smarter Shade, I will know they have success in their sights.