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I have always loved Guy Kawasaki’s 10‐20‐30 Rule ever since I heard about it. If you have never read this post – click on the link now and have a good read over it. Guy basically highlights some of the main areas you need to consider when pitching to potential investors and he outlines a very simple methodology to follow when using PowerPoint to get your revolutionary product or service  across. The 10/20/30 Rule is simple and it makes perfect sense: 

• No more than 10 slides
• No longer than 20 minutes
• No font size less than 30

When I heard about this a few years back I really did think this was a great way to formulate a pitch strategy. Before this I came up with my own strategy for pitching investments – and this was the “3-Dot Rule” – basically, no more than 3 dot points per page with as little info as possible. “Speak to the dots” was effectively my strategy so your audience isn’t focusing its attention on the mass of text on the slide – but rather on you – the person they are listening too and potentially investing in. Of course, we could always merge the two together and get a hybrid “3/10/20/30″ rule which combines all the elements and gives you even more food for thought. 

I also like to throw in the “walk a mile in their shoes” thought process – that being, if I was an investor and had worked extremely hard to generate enough wealth to invest in emerging businesses – what would my investment profile be ? What sort of questions would I ask ? What sort of risks would I take ? How easily would I hand dollars across the table and at what valuation ? Of course, all these questions are highly dependant on the individual person and their net wealth – but it’s useful to throw this process into your thought train when you are considering your pitch. Obviously you have to get your idea across quickly, easily and with a certain “wow-factor” – I would suggest this must be a given and it only comes from ‘practice, practice, practice’ – but perhaps something just as equally important is considering what if you were on the other side of the investment table. What you would say if someone was asking for your investment dollars ? If you consider this aspect seriously – and don’t take the strategy of “well of course I would invest” – then you can really carve out, and sharpen up, your presentation substantially. 

Be excited and passionate – but also be realistic. The optimists best friend is the realist – one dreams big, and the other realises dreams.

- Tim Davis, 2009

Be passionate in the delivery but be realistic in the figures. Guy suggests that the best way to structure your presentation is to follow this format:

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

It’s a fairly good structure, but you can chop and change it as much as you like. Many other people use different strategies. I thought I would put down some general thoughts on what I believe are important when pitching a new product or service. This is by no means a complete list, and nor should you include any of these items in great detail – or all of them for that matter as some may/may not be relevant to you company – but you should try and address most of them and make your answers as realistic as possible. Remember to “TIC” them off. (Please bear in mind I am thinking these up now as I go – so feel free to comment if I have missed something and I’ll add it in.)

The Investment Considerations (TIC)

Company Product or Service

• What is the Growth Opportunity ?
• What is your Competitive Advantage ?
• What can you offer that others cannot ?
• What are the Customer Benefits ? (both performance and psychological benefits?)
• Why would ‘you’ use your service ? Why would others ?
• Why would ‘you’ pay for your service ? Why would others ?
• What stage of development are you in ?
• Is the product and service ready ? Demo ? If not, timeline ?

Services Strategy

• What is the “value equation” ? That is, Customer Value = (Seriousness of Current State + Benefits of Proposed Future State) – Cost of Solution
• What is the product or service ‘really and simply’ – one statement or word?
• How will you improve your product or service ?
• How will these improvements allow your company to expand into other markets ?
• What is your “dream vision” of the product or service ? That is, if I gave you a bottomless pit of money – what would you do? Why?
• Is there any ‘uniqueness’ in terms of IP etc ?

Market

• What is your target market ?
• What is the “bottom up” market view ? (i.e. entry level, segments, industry, country, global etc)
• What is the “top down” market view ? (i.e. above in reverse)
• What is the current market state ?
• What is the market size and opportunity ?
• How much of the market are you wanting to penetrate ?
• How are you taking share off existing players in this market ?
• What are you “expansion axises” ? i.e. what markets do you want to expand into ?
• What are the barriers to market entry ? What are some mitigating factors ?
• How are you going to “increase” market share ?

Risks

• What are the risks ? Now, what are the real risks ?
• What are future and/or potential risks ?
• Operational Risks ?
• Human Capital and Retention Risks ?
• Financial Risks ?
• Legal Risks ?
• Political Risks ?
• FX Risks ? etc
• Which are Systematic (undiversifiable) and which are Unsystematic (diversifiable) ?
• What are your ‘personal risks’ in the business ? Are you taking risks ? If not, why should investors invest ! ?
• What are your teams ‘personal risks’ ?

Management

• What is your level of experience ? 
• If it’s limited, what are you doing about it to reduce investor risk ?
• What are your qualifications ?
• What is your previous business or operational experience ?
• Who is in the team ? What are there levels of experience/qualifications/operational experience etc ?
• Is the team well diversified ? 
• Does your team cover off a broad range of business disciplines ? (i.e. financial, legal, marketing, sales etc)
• What are your projected salaries ? Why ? Are they too high/low ? Are they realistic?
• Do you have any previous start-up experience ?
• If so, what was this business ? Did you sell it ? Was the product/market/etc ?

Sales & Financials

• What is your marketing strategy?
• What is the forecasted marketing spend ?
• The ‘what, where, why, how, who’ of your branding and promotion ?
• What is your sales strategy ?
• Direct sales vs. channel sales ?
• How will pricing fluctuate and is it market sensitive ? What factors make it so ? How to mitigate ?
• What is your project growth ?
• What are your financials (real and/or projected) ? i.e. Burn Rates, Gross Margins, Earnings, Cash Flow, Debts

Investment

• What is your investment ? Financial, sweat equity, etc
• What is the valuation of the business ? Be realistic.
• What is the Capital & Legal structure of the business ?
• Why do you need investment ?
• What will you use the investment for ?
• Why should investors choose ‘you’ over ‘another’ ?
• What % equity are you offering ?
• What is your ‘forecasted’ ROI (return on investment) ? 
• How long will you take to pay ithe investment back ?
• Is your Risk vs. Return fair ?
• How can the investors help without injecting money ?

Random Questions

• What is the problem you are solving ? I know of other services in the same space. What’s the differentiator ?
• Competitor ABC is the market leader in this field by X% margin. How are you going to compete against them ?
• Is your market size really reasonable ?
• Where did you pull the data for your projected growth and revenue streams ? Sales etc ?
• Are your direct sales vs. channel sales strategies sound ? Why not focus on just direct or just channel ?
• I want to know more about how you are going to market ? What are some of your other strategies ?
• Is there any defensible IP ? What stage is this at ?
• How will people associate your product with the industry segment ?
• I want to know more about you and your team ? Tell me.
• I have had 2 other people pitch me a similar idea – why ‘you’ and not ‘them’ ?
• Do you think the amount you are asking for is reasonable ? Can you do more with less ? Can you do less with more ?
• What are the largest obstacles you foresee in order to secure a greater market share ?
• You investment terms aren’t really reasonable ? X% for %X million at % revenue – is this realistic ?

So there you have it. Feel free to drop a comment and let me know about anything you think I should add!

For those of you who have often wondered how the Internet has become such a critical part of our lives, and more importantly, how the Internet actually all started – the 8 Minute video below provides you with an entire overview of how the Internet was created, who created it and how it has evolved into what it is today. The video starts at the beginning of networking technology and looks into how it morphed into a much more complex technology which ultimately created the worldwide communication network that billons of people now rely on everyday. The video does really cover the history very well and compacts it into 8 Minutes neatly and succinctly. It’s definitely a recommended watch, and provides you with an intelligent conversation starter to tell your friends around the campfire or when you are having a few beers at a party …. or, most likely and more probably … confirm your true nerdiness.

I thought I would share a funny story that is not overtly interesting, in fact it’s quite nerdy to be honest, but it’s one that has great practical significance in pretty much everything we do in our lives – and to be honest, I am glad I learnt this lesson very early on, regardless of how trifle it is going to seem. The title gives a basic hint as to what I am talking about but the underlying story is at the very least, slightly assuming – primarily because it makes a mockery of any supposed intelligence I possess and also because I genuinely feel like an idiot for the amount of time I wasted.

As a facet of the work I do in law and my genuine interest in technology, in addition to the mobile technology company that we are building, I have been customarily bestowed the honor of being the family geek – or “computer-go-to” guy. It’s amazing how every family has one, and typically this person is not always IT or Computer Science trained. Perhaps this is primarily due to the “don’t want to bring my day-job home syndrome” that every person on the planet experiences at some point in their lives from a family member or friend (i.e. someone who is a physiotherapist or a masseur or who can easily provide a service for free which gives a large utility benefit to the recipient for nothing, but it will never happen because the person does it all day and doesn’t want to bring it home). So I am regularly called on my mobile phone for “PC-Assistance” which typically involves a fair amount of profanity before the line “can you come around and help?”. At first, I really didn’t mind doing it for friends and family, and I freely offered my already full day to fix some problem that I had no doubt were primarily the result of some sort of associated porn site, or caused through the deletion of something which shouldn’t have been deleted (the attitude of I “well I didn’t do that” always rings true.) Of course, I am not about to start nailing my family and friends (and friends parents) for the reasons around how their PC got into that state – we both know how – so it’s better to just let sleeping dogs lie and pretend it was “something else”. 

Anyway, I digress – the real point of this story specifically relates to something that happened to me today. I was repairing a computer for my girlfriends father (so the pressure was really on) and I was basically doing a full reinstall, clean up, software upgrade and setting up the notebook PC so the performance would be maintained through scheduling and the like. I was decisively confident and perhaps a little too cocky in the manner which I approached the task – a combination of having done the same thing 20 times already but also because I genuinely thought it wouldn’t be all that hard to setup another PC again.

Boy-o-boy was I wrong.

I setup the entire laptop and it was purring like a tiger by the time I had finished with it – confidence was “i repeat” sky high. I packed it up, SMS’d my girlfriends father and say “all done, PC ready for delivery”. Drove over to their house, set it all up ready to connect to their wireless and … then the notebooks wireless doesn’t work – I get the error “Media Disconnected”. Now to be honest, I had a bit of time to spare because we were the only ones home and I thought to myself – “this is no probs, it was working at my house so has to be something small”. I try a few different things such as resetting the Automatic Wireless Startup, editing the TCP/IP settings, editing the configuration of the wireless transmission bands and so forth. None of this worked. I found an article on disabling the media sensing feature in Windows (I was reinstalling XP as Vista was not wanted) so I quickly edited the registry and thought I had it solved. That didn’t work either.

So by now stage I had pretty much exhausted all the options available to me under the pressure of promised performance and I had to accept defeat and admit that the PC needed a little more work (my facade of arrogance was quickly deteriorating). So I went home and started work on the problem – I tried everything – even attempting to hack into Windows a little as by this point, I thought I was going to have to reinstall everything anyway because – in my mind – it had to be a conflicting driver of some sort (since it was working, then stopped). So I again reinstalled XP and started the PC up only to discover it wasn’t working. To cut an already long story short, I spent probably another 3 hours surfing the net look for “Wireless Media Disconnected” related issues – from forums to blogs to large scale tech help sites. All solutions offered proved useless. I was completely and utterly perplexed and was actually considering ringing up Microsoft to ask them for help since I had exhausted all options.

Then I stumbled across the solution at 1:10AM – on the front of the laptop was a switch “Wireless On”. It was off. I needed it on. I almost punched the computer. 

Now I am not a violent person by any measure of the stick, but you have to consider the amount of frustration I was experiencing after spending more than 8 hours trying to fix a problem that was simply a direct result of a switch being turned off. I had installed and setup an entire PC twice – for free – and the entire time it was the switch that was the issue. This was the reason the PC was working and then all of sudden stopped – because when I put the laptop into its bag I knocked the switch off. Sure sure, you are probably saying to yourself right now, “pfftt – would have been the first thing I checked”. Well, thanks but I didn’t know laptops came with external wireless switches (which moron invented this anyway? Power optimisation can be done through software) – so I was pretty annoyed by the end at myself, the computer, IBM, Microsoft and the idiot who invented external wireless switches.

So what is the lesson here?

The lesson is summed up in this quote I thought of afterwards while having a “success beer” - 

The smallest oversight on the road to success has the greatest chance of being your downfall.

Sure it’s a simple quote – but it’s certainly one that taught me a valuable lesson – and that is that most problems are never actually difficult. Rather, they simply require you to go back to the basics, look in the simplest and most logical places first and don’t create greater complexities than those which need to be created. If I had of simply looked at the front of the laptop when the problem arose, it would have been solved. Additionally, if I had “read the manual” online when I was searching for wireless issues – problem solved. There are numerous “nodes” to success that I could have taken yet I was convinced that the problem had a more complex heart and so I assumed that this was the one that needed to be, and perhaps deserved to be, explored. (Of course, I wouldn’t have the pleasure of writing this post or the wisdom of hindsight.)

So to conclude – a few points. Firstly, if you are doing technology work – see what the external interface of a device offers by way of functionality before you delve into a software solution, and you will undoubtedly never make the mistake I did. Secondly, try and approach complex problems from the simplest of angels – 99% of the times they will have a lateral or tangential answer. Finally, make sure you cover off all the simplest and tiniest of oversights on the road to your goals – sometimes the “don’t need to worry about that” or “can do that later” attitude will be your undoing.

Wow, what a year 2008 was. It was perhaps one of the most momentous years of the modern era which saw the rise and fall of some of the biggest companies on the planet such as Bear Sterns, a newly elected US president, a market crash, a free fall in interest rates, a war in Israel, a Chinese Olympic Games, a large number of natural disasters such as the Tragic Earthquake in China and a worrying prediction for 2009.

Of course, 2008 was a fantastic year despite all the gloom and doom.

We saw the best brought out in Humankind through the Chinese Olympic Games and record numbers of people tuning into watch the Paralympic Games. We saw the election of what the world hopes will be one of the greatest US Presidents to ever rein over their country. We saw triumphs in technology, music, science and celebrated the winners of the Nobel Prize in their respective categories – who brought amazing change to the earth in ways we cannot even begin to imagine. We saw the best and the worst of people and we saw innovation flourish through the use of new technology such as the semantic web and the utilisation of social networks to achieve a purposeful outcome.

So what lies ahead for humankind in 2009?

Naturally at the beginning of any year, we always recap on the events of the last year as a precursor to the year ahead. The media is painting a picture of economic doom, recessionary outlooks, huge increases in unemployment, a slowdown in innovation and a year of belt-tightening and general unrest.

For me, I tend to disagree. I am naturally an optimist and don’t like to dwell on the negative sides of what “may” or what “might” happen. If the whole world looks at the negative side of 2009 in the first week of the new year, then how can anyone hope for a better and brighter year. A new year means new opportunities and new success stories. The world is an oyster at the dawn of a new year and I don’t believe for one minute that innovation is going to cease because of tougher economic times. The greatest idea’s always come from a time when money is tighter as entrepreneurs are forced to do more with less. 2009 will be a year of opportunity as humankind will need to become more economically minded. Recessionary periods are always a time for improving efficiency and ensuring that a forensic statistical analysis can be conducted across businesses to determine the weak points of the process chain. The greater the emphasis on efficiency, the more streamlined a business can be in tough times and a better utilisation of working capital can be achieved.

Don’t get me wrong, I am a realist as much as I am an optimist. But I think 2009 will be a great year. The 8 years of bullish market action had to come to an end because the regulatory legislation in place in the biggest markets around the world was outdated and simply ineffective. The market needs to implement fixes and it needs to move into the future a better and more transparent medium for trading and doing business than what currently exists today. Of course this is going to mean that people are going to struggle and that some people are going to loose their jobs. But this is a facet of any year, not just one which is recessionary.

Sometimes I feel that we all get caught up a little in the picture that the media paints for us, and this is because the media wants to grab your attention and provoke some sort of physcological reaction from you. I think 2009 should be a year of “stepping back” and really making up your own mind. Don’t get caught up in what the media is throwing at you everyday – take it all in by all means – but don’t get any knee jerk reactions to all the news that will be thrown at you. Take a calculated response to news and media, and ensure that you manage the risks you take in your life as best you can. There will be many opportunities which will come your way and it’s up to you to decipher which of these are the ones worth taking.

What what will 2009 bring for Tim Davis?

Well I have had a few people ask me this question and I have received some emails as well. 2009 is an exciting year in my, and my families life. Primarily because I will hopefully finally finish my Juris Doctor after completing my Masters in Business Law last year. I hope to allocate some time to posting more content on both this blog as well as SmallStocks - a site that I run in my spare time to post some thoughts on the Stock Market. However, perhaps the most exciting thing for me in 2009 will be the launch of our companies flagship product. We think the site rocks and although I don’t want to shed any more light on it just yet – we all hope that you will see it by the end of Q3 2009.

There will also be a tonne of new content on this site under the Notes and Papers pages as I post more and more open source articles relating to law and business. Of course, I want to state now that my door is always open and I am always happy to receive requests from readers about content. Just use Contact Me page above to manage these requests and feel free to contact me at any time.

Most of all, I hope that you, your family and your friends have a great year. Stay safe & healthy, get those new year resolutions achieved and have a fantastic year.