Your Chaotic Story Is an Asset

IF YOU’RE LIKE ME, you worry about your startup’s story — or rather presenting it.

The pivots, founder feuds, competitors, and development delays are just some of the many hairpin turns that contort your journey into something much more…free-spirited.

You and I have realized that we need to strategically and positively frame our stories to raise a successful funding round. Yet, our startup stories can sometimes seem so chaotic that we might mentally predict failure — how on earth can our messy story look appealing? Who would want to get involved in that? We may even begin envying companies with a seemingly more linear (as far as we can tell) storyline. But regardless of our perceptions, the chaotic story you have can actually be an overwhelming advantage if played correctly. Let’s take a look at this extreme example.

Enter Jon Medved, the CEO and founder of an Israeli startup fund called OurCrowd. In 2012, Medved was in the process of courting OurCrowd’s first investors. These two New Yorkers had never been to Israel before, so Medved decided to show them around Tel Aviv and introduce them to Israel’s startup landscape. After having an enjoyable afternoon of touring and meeting local entrepreneurs, Medved and his guests were on a highway back to Jerusalem when the sound of spine-chilling air raid sirens began to howl. Rocket attacks on Tel Aviv had just begun, the first attack in twenty years.

I pulled over to the hard shoulder and directed my guests to lie down in the dirt by a wall as Israel’s Iron Dome defense system soared into action over our heads. We heard the booms as Iron Dome intercepted the Iranian Fajr missiles overhead, and felt the sickening impact as three of the rockets fired by Hamas exploded a couple of miles from where we were taking cover.

After the assaults ceased and sirens fell silent, Medved and the two investors climbed back into the car. On the drive back, Medved had the sickening feeling that the successful day had just been completely ruined — who in their right mind would invest in companies that were threatened by missile attacks? Upon arriving home, the two investors informed Medved that they would reconsider their investment proposal and get back to him tomorrow morning.

When I arrived at the hotel the following morning, the investors had already made up their minds. I opened my mouth to speak but one of them stopped me short.
“Jon, we must tell you that we’ve decided not to invest a million dollars in OurCrowd,” said my guest, exchanging a glance with his colleague. “After what we went through yesterday, we’re going to invest two million dollars. If those guys from Hamas think they can intimidate us, they’ve never met a real New Yorker.”
I have those two gentlemen to thank for helping get OurCrowd off the ground.

Woah.

Imagine being told that your company will not only receive the funding it needs but double the amount because of the hardships you’re enduring. Wouldn’t that make you a little prouder of the obstacles you’ve overcome and are overcoming?

I think we often get caught up in keeping our journey as neat and as straightforward as possible at the expense of missing the opportunity to demonstrate how strong we really are. Thus, we try to minimize and skip crucial hurdles instead of giving them proper attention — giving how you overcame and progressed forward its proper attention. This isn’t to say that you need to go into gory detail about every embarrassment and roadblock — don’t do that — but you should discuss the highlights of the arduous journey you and your team have traveled. Such a journey demonstrates that you’ve got skin in the game and, most importantly, that the next time an ugly debacle comes your way, you won’t run and let the company fold.

Because of your nonlinear journey, you and your team are seasoned warriors unphased by chaos. Just as those Israeli companies turned managing the daily threat of missile attacks into a strength inspiring to investors, so can you with your startup’s journey. As VC Mark Suster said of investors, “it takes a miracle to get investment dollars out of them if they’re not impressed with the team.” A difficult journey that your team has persisted through will impress them. It’s up to you to share it.

* * *Leading ForumMark McKinney is a High Point University Grad Student and entrepreneur. He is the founder of BlueSkyAI. Mark loves reading, writing, photography, and building new tech. You can follow him on Twitter at @MarkDMcKinney and at Thought Science.

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Pitching Remotely

NOW that almost everyone is working from home, startup founders looking to raise money from investors will need to do so remotely. In fact, in-person pitches may now be a thing of the past.

As both an individual investor and venture capitalist, I’ve taken a lot of remote pitches since the shelter-in-place order started. My impression is that most entrepreneurs aren’t always putting their best foot forward.

Here are five seemingly contradictory tips to keep in mind while pitching remotely.

Tip #1: The Slides Aren’t the Pitch

The first tip will be relevant for both in-person and remote pitches but is doubly important when you are pitching remotely: the slide deck isn’t the pitch. The pitch is the story that you are telling.

So, what do I mean by the story? This is a sequential narrative that captures the main reasons why an investor might want to invest in you. It doesn’t matter how good your slides look; it matters how compelling your story is.

Just like story beats in a movie script, which is meant to evoke responses from the audience, a story in the context of pitching to investors should consist of certain beats that are meant to elicit their reaction.

Paradoxically, the better the story, the worse the slides can be. When I was an entrepreneur raising money, one of the most effective pitches was for the Tap Fish video game.

I only had simple black and white slides with text and no images. If that seems like it violates everything you’ve read and heard about putting together pitches—you are right! Our story was great, so the slides didn’t have to be.

Here is an outline of the basic story, along with the ER (expected reaction):

Mobile gaming is new and taking off
  (ER: Nodding/agreement)
We have a million daily active users
  (ER: Surprise and/or impressed)
Our users love our games
  (ER: Nodding)
We’re making quite a bit of profit
  (ER: Surprise, because most startups aren’t profitable so soon)
Look how much money we’re going to make if we follow our plan
  (ER: Greed and excitement)

A few years later, I was raising a subsequent round for my next video game startup, Midverse Studios. By then, we had a more experienced team thanks to the success of Tap Fish. We had flashier games that were based on the TV shows Penny Dreadful and Grimm. We also had marquis investors, who put money into our seed round, and we had a more impressive set of slides.

Despite the flashy slides, we found it difficult to raise money. The fact of the matter was that the slides were better, but the underlying story wasn’t nearly as good. This was because the market for mobile games had become more competitive, making it difficult to acquire users cheaply. We also didn’t have nearly as many users, and we certainly weren’t even close to profitability. We needed a new story that would captivate users and investors.

The real takeaway from my experience is that before you assemble your slides, make sure to articulate your skeleton of a story that will evoke the desired response from investors.

Tip #2: Use Your Slides in the Remote Pitch

Now, this might sound contradictory to Tip #1, but going through some slides is even more important these days when pitching remotely than before the current health crisis.

In recent times, it seems the trend is that entrepreneurs will email me their slides before the call. But then, during the call, they completely ignore the slides. It’s as if they expected me to have memorized the slides for the call.

Instead of being able to focus on their message with the guidance of slides, I found myself rifling through the collection of slides to find the right one.

Out of my last five entrepreneurial pitches, all five had sent me the deck beforehand. Yet only one actually brought up the slides on the Zoom call and went through them with me. The rest just wanted me to look at them sitting on their desks at home, not wanting to “bore me” with the slides. This was a mistake.

Now I’m not saying you need to go through every single slide on a remote pitch. You can certainly economize and jump around. But the visuals are actually important when you are trying to make a point to an investor who is attempting to understand your story and has been listening to a multitude of pitches. For one thing, it’s harder for an investor to figure out what the heck your product actually does on a remote pitch.

I’m more likely to remember you if there is a catchy visual that illustrates an important point, as opposed to just telling me that point.

So, if you have a deck, bring up the slides while talking to investors on Zoom. Otherwise, they’ll just remember you as another face on a screen.

Tip #3: Don’t Spend Too Much Time on the Product

Traditionally, entrepreneurs love to talk about their product, but investors need to know about more than just the product – the market, the team, competitors, business model, etc.

Recently, I saw an entrepreneur’s deck that was 30 slides long, with 10 slides about the product (features, roadmaps, videos, and screenshots). This was too much. Try to keep your deck to 10-15 slides (with extras you can draw upon if necessary).

Some pitches have too little about the product, and some have way too much. The best pitches have “just enough” so that an investor can understand what their product offers and why it might be special.

One or two slides about your product are enough if you do it right. Then it’s time to move on to why it’s better than other solutions, followed by the business model and how you are going to make money.

Tip #4: Explain What Your Product Does

Some entrepreneurs go too far in the other direction and make it really hard for the investor to figure out what their product does clearly.

This has led to pitches that are “market heavy,” such as many slides of data about the market. To be honest, if I took your pitch, I am probably already interested in the market. So the market slides are somewhat important, but you don’t need more than 2 slides on the market, so don’t dwell on them.

For example, if your startup is in esports, you’ll have the obligatory slides talking about how many hundreds of millions of viewers of esports there are. However, as an investor, I probably already know this, or I wouldn’t have taken the pitch.

What I really need to know is your segment of the market, what your product is, and why it’s better or different than others.

If I had to pick the one thing that takes the most time in remote pitches, it is figuring out what the heck an entrepreneur’s product actually does! Many entrepreneurs get to 2/3 of the way through the slides and start talking about the business model and financial projections while I’m still won-dering exactly what their product does and what makes it unique. Having a screenshot or two displayed while you explain your product helps tremendously.

So remember Goldilocks—having too little or too much on the product can both be big problems—you have to get it “just right.”

Seems obvious, right? You would think so.

Tip #5: Identify a Killer Slide Investors Will Remember and Repeat

I always tell entrepreneurs that whether they are conscious of it or not, an investor leaves with a positioning in their mind about you and your company. This is how the investor will position your company to their partners (if they are a VC) or to other investors, or even to their spouse (if they are angel investors).

If you aren’t clear on what they positioning will be, it’s likely you aren’t clear on your story, which brings us right back to Tip #1.

The best positioning is usually the single strongest point that you have in your presentation. Typically, it is about your team, market opportunity, technology/product, or market results/ traction.

You can go through 15 slides, but in the end, there is one slide that will get an investor. I call it the killer slide.

If you are in a new market and don’t have anything to show yet, but have a team that has had real success before (by selling a company), or you are a team that worked together at Google, then the killer slide is the team slide.

These days it’s become fashionable for entrepreneurs to put the team slide at the very end of the presentation, which is great for Demo days. But if the team aspect is your biggest strength, then you need to be sure that you establish your credibility up front, so put that first. Because up until that slide, the investor is thinking: “Who are these yahoos, and why should I care about what they say?”

If your biggest strength is your technology or IP differentiation, you better have a simple visual, which makes it easy to understand while also hammering home your IP is so important. It’s important is that the investor remembers the “gist” of why your IP is so special after your conversation. Spend more time on this “killer slide” and hammer in the point.

Sometimes, the “big strength” is a product demo, which isn’t in the slides at all. I recently invested in a VR company whose founder told me that the way he sells investors is to get them to put on VR glasses and meet him “in world.” In this case, it is necessary to get people over the hurdle because the VR market is not as “hot” as it used to be when it was seen as the “next big thing.”

All investors have to justify their actions to someone else (partners, LPs, spouses, etc.). This is why it’s extremely important to not just convince an investor, but to arm them with a positioning they can take to others to justify their investment.

Conclusion

There is, of course, no one way to do a good pitch remotely during these trying times. But for many startups, it’s even more critical that you raise money quickly, at a time when investors are growing more and more cautious.

Almost all good pitches have a good, solid story behind the slides. Moreover, guiding the investor to the right slides is even more important when you are pitching remotely rather than relying on the investor to “get it.” You aren’t there to just chat—you are there to pitch.

Remember to keep a “just right” approach to all the sections of your pitch: market, product, competitors, business model, and team. Ensure that you don’t have too much or too little on any one section.

Most importantly, think about what the investor will say about your company after the pitch. If it’s not what you want them to say, then your pitch needs work!

* * *Leading ForumRizwan Virk is the founder of Play Labs @ MIT and author of Startup Myths & Models: What You Won’t Learn in Business School, Zen Entrepreneurship, and The Simulation Hypothesis. He is also a venture partner at several VC firms. For more information, please visit ZenEntrepreneur.com and follow him on Twitter.

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Weekend Supplement

Madam C.J. Walker

NETFLIX brings to life the entrepreneurial success story of African American entrepreneur and philanthropist Madam C.J. Walker. The four-hour mini-series Self-Made starring Oscar-winner Octavia Spencer is based on Walker’s great-great-great-granddaughter A’Lelia Bundles book, On Her Own Ground: The Life and Times of Madam C.J. Walker.

Madam C.J. Walker was born Sarah Breedlove on December 23, 1867, on a plantation in Delta, Louisiana, to former slaves-turned sharecroppers after the Civil War. Her rags-to-riches story is inspiring and a testimony to hard work, persistence, and resourcefulness. Seeking a way out of her poverty, she became a washerwoman and cook. Eventually moving to Denver, Colorado, she married ad-man Charles Joseph Walker and renamed herself “Madam C.J. Walker.” With $1.25, she created a line of hair products and straighteners for African American women and became one of America’s first self-made female millionaires.

As her business grew, she applied her success to philanthropy giving to organizations focused on the social well-being of Black Americans. She also gave six scholarships to the Tuskegee Institute.

Walker died of kidney failure and complications due to hypertension on May 25, 1919. Her estate was valued at about ten million dollars.

While Self-Made successfully brings awareness to Walker’s life and accomplishments, it is a dramatized story—facts are compromised, but the essence is there. It is a good look into the entrepreneurial mindset. If you want to know more about her life, you might start with Oprah Magazine’s What Self Made Got Right—and Wrong—About Madam C.J. Walker.

Madam C.J. Walker on the business of life:

I got my start by giving myself a start.

If I have accomplished anything in life, it is because I have been willing to work hard.

Perseverance is my motto.

There is no royal flower-strewn path to success. And if there is, I have not found it.

Don’t sit down and wait for the opportunities to come. Get up and make them.

I want others to look at us and see that we care not just about ourselves but about others.

Keep in mind that you have something that the person standing before you really needs, imagine yourself a missionary and convert him.

Girls and women of our race must not be afraid to take hold of business endeavor and, by patient industry, close economy, determined effort, and close application to business, wring success out of a number of business opportunities that lie at their doors.

People are ugly not in their face but in their thoughts. So never get impressed by someone’s appearance, rather dig deep down into their thoughts to reveal the real person inside out.

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Restoring the Soul of Business

DATA without soul is harmful. Science, math, and data do not excuse us from thinking. Instead, they make it imperative that we learn to think more critically and combine it with our humanness to come to more measured conclusions. The story we create with the data makes all the difference.

Rishad Tobaccowala is the chief growth officer at Publicis Group, a global advertising and communications firm. Flush with data, we risk losing something more valuable: what’s human.

Rishad writes in Restoring the Soul of Business: Staying Human in the Age of Data, that we can have too much math and too little meaning. “Successful individuals and firms can never forget the importance of people, their emotions, the culture of the organization, and what cannot be measured. Successful people and companies combine the story and the spreadsheet, and by doing so, restore the soul of business.” It’s a balance.

The 6-I Approach

Extracting meaning and accurate insights from data is made better by implementing what Rishad calls the 6-I Approach.

Interpret the Data

Not all data is alike. “Develop hypotheses, search for patterns, look for outliers, create alternative scenarios to explain the information you’re receiving. Through interpretation you can enrich the data with meaning; you can identify the story it’s telling.”

Involve Diverse People

“Expand the group that examines the data. When you involve people with various skills and perspectives, you’re likely to receive a richer interpretation.”

Interconnect to Larger Trends and Events

How does the data relate to what you’re doing or to an emerging trend or a competitor’s product launch? “Making these types of connections helps you take the data one step further, determining if it’s going to have a short-term or long-term impact, if it’s suggesting the end of a trend or the beginning of a new one.” Give it context.

Imagine and Inspire Solutions

What possibilities does the data ignite? “Rather than allowing the data to limit options and actions, explore the solutions it might inspire. If the numbers show that your product category isn’t doing as well as it once did in Market Z, is there an emerging opportunity because the market still has potential and competition will be reduced because of this data?”

Iterate

“Data can spawn new and better data. Is there a test you might run based on the information you’ve gathered that can produce more insightful facts and figures?” Ask new questions of the data.

Investigate People’s Experiences

“In a given organization, you have hundreds or thousands of people with data-relevant insights because in the past—whether while part of your organization or with a previous employer—they experienced something applicable to the current information.” Sometimes new data is just an old story on a new context.

Seven Keys to Staying Human

Each of these sections is full of practices to help integrate them into our organizations—to make them more human.

Talk About the Inconvenient (Tough) Truths

Three of the most valuable assets in communicating are the following four-, five-, and six-letter words: data, trust, and intent. “Do you have good data that supports your point of view? Can you be or are you trusted? What is your intent? – i.e., why are you saying what you’re saying? Organizations must encourage trusted, well-intentioned, well-informed people to display this type of candor, no matter what their titles are?

Address the Reality That Change Sucks

People see change differently and are affected by change differently. “People won’t support and further change unless they perceive how they and their skills fit in. Employees need to see how the change strategy helps them grow, not just the organization.” When we are data-driven we see things in absolutes. Humans are more nuanced than that.

Unleash Creativity by Inserting Poetry into the PowerPoint

The spreadsheet “is not a clear window to view either the present or the future. Inherently, it’s backward-looking device that jails thinking within its cells. Within many organizations, highly innovative, potentially game-changing ideas are born regularly. Unfortunately, the left-brain environment of these organizations often starves these ideas of oxygen and they don’t survive.”

Introduce art into your organization. “Creativity is how we manage our own change.”

Recognize That Talent Does Not Work for Companies but Rather Companies Work for Talent

Data tends to favor the organization rather than the employee. “Working for talent translates into three developmental actions: helping people create their niche, voice, and story.”

Niche: In a connected world, a premium on expertise exists. Experts tend to be more productive, and hey tend to develop better solutions.

Voice: Niche focuses on the product while voice focuses on the process. If niche is a fact, voce is a feeling, and both are critical to building a personal brand.

Story: While niche is what someone is good at and voice is what makes someone special, story provides someone’s reason to behave.

Diversify and Deepen Time Usage

It is a mistake to allocate and measure time only in economic terms or numeric ways. The quality of how people spend their time is as important as the quantity of what they produce during that time. To get the most out of time, organizations need to sanction doing less and open spaces to do nothing.

Schedule More Meetings

Too often meetings are about the spreadsheet side of the business. “The received wisdom of minimizing meetings and only going to ones that create value for you is wrong. More meetings create more opportunities for productive relationships.” Rishad five types of meeting we should be having that are meaningful and relationship-focused.

Upgrade Your Mental Operating System

Organizations need to put a priority on mental self-improvement. “Provide them with the means and the encouragement to learn continuously—or rather, to learn and unlearn.”

Rishad make this important point about balance. When there is balance between the spreadsheet and the story, people are more likely to form their own opinions and be creative.

First, there is a need to balance ends and means. If the goal is to achieve a numerical goal at all costs, balance is missing; people will ignore rules and even laws to achieve goals. A second form of balance is recognizing that people have different skills and the company should not force consistency and conformity.

Restoring the Soul of Business is a much-needed book. In a world awash in readily available data, we must never forget the story. The story is what makes the data so valuable. That will be the challenge of the future. Data is the commodity. The story differentiates. Rishad writes:

My point isn’t to beat up on algorithms—they obviously are crucial in a digital age—but to suggest that if we leave organizational employees to their own devices (pun intended), they will be reactive and biased in their thinking. They won’t consider options beyond their own narrow beliefs; they will see the trends they’re exposed to rather than explore ones on the periphery; and they will fail to consider that their ideas might be wrong or outdated since their screens are confirming their biases.

If we put too much trust in algorithms, we are faced with three big risks: “The first is when you forget that a human programmed an algorithm and so it has a built-in bias. Leaving it to itself means you are giving up agency. Second, no algorithm, which is about zeros and ones, can truly capture humans who are variable. Third, if you can add no value to an algorithm, you have no job.”

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