Essential Communication Tools for Entrepreneurs

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http://www.youtube.com/watch?v=nkuOuxRD1Bc

The Idea

1:30 -2:30

Essential Communication Tools for Entrepreneurs

  The ‘Elevator Pitch’   30 second outline of business concept

  Executive Summary   3-5 page overview of your business

  White Paper   Layman’s summary of your technology, product(s), the uniqueness and the value

  PowerPoint Presentation   ~15 slide outline of your business plan

  Business Plan   Detailed description of your business plan: product plan, go-to-market strategy,

management team and financials.

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How do the tools work?

  The tools EXPLAIN and ILLUSTRATE:

  What is unique about your business?

  Who cares?

  How will you execute?

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DIFFERENTIATED SUSTAINABLE

VALUE PROPOSITION

Selling vs. Planning

  Be conscious of the huge difference between communicating your business concept and building your business plan.

  The primary purpose of the Toolkit is to communicate the value of your business idea – EXCEPT THE BUSINESS PLAN.

  A business plan is an internal planning document seldom shown to anyone outside the company

  The other documents are external communication documents used to sell the value of your business idea to outside parties

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Why do we need these tools?

Tools

Communicate to employees / potential hires

Solicit investment

Communicate to partners

Communicate to customers

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DYNAMIC

CLARITY

EASE OF UNDERSTANDING

CONSISTENT AND CONCISE

VISUALLY COMPELLING

No hype - factual statements. Enthusiasm will be generated by the investor realizing the opportunity on his/her own

Business planning is an iterative and adaptive process that requires constant update and adjustment work

A clear, precise structure is a courtesy to those investing their time in reading the proposal

The storyline and all the facts presented must fit together and generate a well rounded impression

Not the quantity of analyses, but the clarity and preciseness of the pack are important

Those who allocate investment resources rarely are technical experts for the technology used in the proposal

Principles for Business Planning and Communication

FACTUAL

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Myths and Truths

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Make your message memorable

 ENGAGE your audience

  Make information meaningful to them   Case studies

  Address knowledge gaps   Visuals, charts, graphs

  Let them arrive at their own conclusions   Pace your delivery

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Know your audience

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  Speak to your audience in language that they understand:

  Institutional investor – do not speak ‘techie’, tie everything back to money

  Strategic investor – may be more technical; will be interested in your ideas as they impact their business

  Strategic Partner – mix of technical and business; understand how a relationship will be mutually profitable to both parties

  Angel Investors - access their background; understand their interests

  Customer – understand their industry and pain points

Case Study

Before…

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After…

Product and Technology A prototype is currently available at www.tryme.com which monitors blogs from Blogger (Google’s blog hosting service) which includes approximately 13 million blogs. Our proprietary crawling technology monitors approximately 90% of the blogsphere through livejournal, wordpress, livespaces and…

Product and Technology Inc. can collect, clean, aggregate and processes vast amounts of text information and extract the actionable insights that these marketers and information services companies seek. Inc.’s platform is uniquely sensitive to changes in individual sentiment.

Know your audience

  Give your audience the information they are looking for:

  Do not assume they want to see the depth of your scientific knowledge

  Speak to them with their interests in mind, not your interests in mind

  Whenever possible, communicate with numbers and graphics

  “the market is huge and growing”, you could say “the total market is $3B and is projected to grow at 12% per annum”

  show a graph of the historic and projected market size broken down by segment

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Case Study

Before…

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After…

Addressable Market Segment Social networking and user-generated content applications have rapidly changed use and perception of online technologies. BLOGs have been increasing at a rate of 100,000 a day and currently range in the order of 80 million…

Addressable Market Segment The market opportunity for this technology is vast. Annual spending on market research in the US is estimated to grow by approximately 25% going from $8.7B 2007 to $10.9B in 2009…

Case Study

Before…

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After…

Competitive Advantage Inc. provides brands a simple tool for real time sentiment monitoring in places like Facebook etc.

Competitive Advantage Inc.’s competitive advantage is rooted in the expertise of its principals and its proprietary platform technology, benefits include: First fully automated online solution for media analytics. Via simple fully configurable dashboards, users can start monitoring their brand…. Advanced data analytics and language processing. The software utility can efficiently track sentiment

Communication tools help you build relationships

 Be strategic about what you provide and when you provide it   Not everyone should see your white paper or business

plan   Leave some details for later, don’t give away everything in

the first meeting

 Your documentation should radiate professionalism   Ensure accurate grammar, spelling, diction, illustration,

layout, etc.

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http://www.youtube.com/watch?v=nkuOuxRD1Bc

The Pitch

2:40 -4:30

The Elevator Pitch

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Inc. has developed hand-held devices that are designed to quickly assess a

patient’s brain function and potentially identify dysfunction to help

medical professionals to prescribe appropriate treatments.

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The Elevator Pitch

  What:   A 30 second overview of your business concept

  Why:   To get a follow–on meeting

  When:   In a cold call to an investor, customer, potential partner, etc.   Good for networking at trade shows, business functions, etc.

  Dos and Don’ts:   Do not spend forever practicing and refining this – should come naturally;   Figure out a few key messages you would like to get across to use as a loose

script   Distribute key messages to outward facing employees – standardize message

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The Executive Summary

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The Executive Summary

  What:   3-5 page summary of your technology, product, sales plan, revenue path and

financial requirements

  Why:   A ‘teaser’ document meant to generate a request for more information or a

meeting   Readers will want to get their head around the concepts quickly

  When:   When you have a ‘warm’ intro or an invitation to contact someone   Integral first interaction with an investor   Rides the line between confidential and non-confidential – some degree of

trust

  Dos and Don’ts:   Has to have the right emphasis given the maturity of the business concept   Keep it current

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The Whitepaper

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The Whitepaper

  What:   A fairly concise layman’s summary of your technology, product(s), the

uniqueness of the technology and products and the value proposition

  Why:   Helps investors to understand how a concept or technology works

  When:   After investors are curious about details or have bought into the big picture

business vision

  Dos and Don’ts:   Put the whitepaper on your website   Don’t go so deep as to give away all of your trade secrets/IP – consult your IP

professional   Keep it as short as possible and fully explain all acronyms

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The PowerPoint

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The PowerPoint

  What:   A ~15 slide outline of the key aspects of your business plan

  Why:   Provides an overview of the business plan in point form   Allows people to absorb a lot of key information in a short period of time

  When:   Usually the second piece of information an investor receives after the executive

summary   Investors love these because they can flip through them very fast and get highlights

  Dos and Don’ts:   Critical document in the fundraising process – present a sound story; make it look

good   Practice speaking to it, preferably in front of friendly people who will ask lots of

questions   Use graphics as much as possible

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The Business Plan

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The Business Plan

  What:   A rigorously prepared and executable description of how you will build your

business

  Why:   This is your roadmap for how you are going to build your business   Describes roles and responsibilities for building various aspects of the business

  When:   When you have assembled enough solid information to write it   Highly proprietary; later stages of diligence   Wait for the investor to to ask for it

  Dos and Don’ts:   Often made a condition of financing or a board action item   Re-write with every major change in strategic direction   Avoid the temptation to turn this into a sales tool – preserve its integrity as an

execution plan

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How to build and use your toolkit?

  Do not start by building your business plan   You will not have the information you need   You will examine issues out of priority   You will expose lack of understanding

  Do not offer to supply a business plan off the bat

  Use the PowerPoint Deck as receptacle for all ideas and information that comes to light – easy to manipulate, organize and adapt

  Build your executive summary and eventually your business plan based on your PowerPoint deck

  Give investors your exec summary and offer to walk them through the PowerPoint slides in person or on the phone

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Advice from the trenches

 Do not overload the documentation   Try to get across a few key messages instead of telling

the whole story   Your audience will only absorb the key messages

 Templates exist for all of these documents   Don’t re-invent the wheel   MaRS has developed templates based on extensive

review of industry best practice materials

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Evaluation criteria for a new venture

Your team has people who are leaders

in their field. They have a strong

customer focus and specialized

knowledge of relevant sub-sectors in

the industry. Ideally, your team should

have people with prior experience in a

technology start-up.

Your business addresses a large,

growing and global market. You

have a clear understanding of the

customer segments and competitive

landscape in the target market.

Large and Growing Market Opportunity

You have a protected technology that

will provide sustainable competitive

advantage for the business and its

customers. You have a product

development roadmap that

addresses regulatory hurdles and

demonstrates your ability to grow

your business.

Sustainable Competitive Advantage

Key Opportunity

Requirements

1

2

3

Experienced Management Team

4

You have defined how the company

will make money. You have

developed financial projections that

demonstrate Value Creation based

on real-market validation and input

from paying customers.

Financial Return on Investment

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Business Plan

  Executive Summary   Company & Opportunity Summary   Product & Technology   Market Size and Growth   Sales and Marketing Plan   Competitive Overview   Operations Plan   Management Team   Financials & Investment Requirements

Outline

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PowerPoint/Investor Deck

Outline

  Company Description (1 paragraph)   Company Overview, Management & Vision

(2-3 slides)   Need & Existing Solutions (1-2 slides)   Technology, Products and Product Rollout

(2-3 slides)   Market Opportunity (1 Slide ,Graphical)   Competitive Overview (1 Slide , Largely

Graphical)   Sales Strategy & Channels (2-3 slides)   Partnerships and/or Partnerships strategy

( 1 slide)   Financials & Path to Liquidity (2-3 Slides

(Largely Graphical)

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Executive Summary

  Company Description (1 paragraph)   Basic Need & Company Solution

(1 paragraph)   Technology and Product(s) (1 paragraph;

diagram)   Value Proposition (couple of bullets)   Market Size and Growth (diagram)   Sales Plan (1 paragraph)   Competitive Advantages (couple of bullets)   Management (detailed bullets)   Revenue Growth Projections (diagram)   Financing Requirements (1 paragraph)

Outline

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Advice from the trenches

  Practice, Practice, Practice

 Different versions for different people   Management vs. finance vs. technical

 Version control

 The main idea of all of this is to entice investors/partners to take a deeper look

Slide 35

http://www.youtube.com/watch?v=nkuOuxRD1Bc 5:36-6:29

Veronika Litinski Director, MaRS Discovery District T 416-673-8113 E vlitinski@marsdd.com W www.marsdd.com