I recently came across a post by Eric Paley of Founders Collective. If you are not familiar with the Bostonian seed fund / angel group – it’s a pretty good one in my opinion. Anyway, the post was about how much business plans become irrelevant in the era of lean startups, agility and pivots. I couldn’t agree more with the spirit of the post. At EyeView, we only made a b-plan to apply to Harvard and MIT competitions and at SOOMLA we never bothered to write one and even if we have it would have been obsolete within 3 months.
Eric vs. Paul – should you have a deck or an executive summary
Eric claims that a deck has two main advantages:
- It’s easier to adjust as your plan changes
- Decks are more friendly as an investor material
On the other side of the spectrum, another big expert on startups, Paul Graham claims that the deck is obsolete and that a startup should only have an executive summary. His main points are:
- Never send out material as a pre-requisite for a meeting (I couldn’t agree more)
- For face to face communication, you need to know your story well enough to not need any visuals
- After the meeting, you can send executive summary for reference
Focus on your story first
- Company x has a great team. John sold 2 companies and Will registered 10 patents
- The market we are addressing is exploding, there are going to be some big wins here and we will be one of them
- We identified that 90% of audience y has a huge pain point
- Product z we are creating address the pain point perfectly
- Audience y loves product z so much that they recommend it to each other – numbers are through the roof
- Product z gives users much more value than the competition
- Any new user increases the barrier and makes it harder for the competition
- Companies/individuals in audience y typically allocate 10% of their annual budget for alternative solutions
- We found a way that allow us to spend no more than 10% of the product price in order to gain a new customer
- There are enough companies in audience y so that with the price of product x the company can generate $100M in revenues
Getting meetings, pitching the story and sending it after
- Optimizing the story – written bullet points with no deck
- Sending material to get a meeting – nothing, not happening, avoid at all costs
- Sending before a pre-booked meeting – written bullet points (executive summary)
- Casual pitching (coffee shop) – no deck, just verbal story
- Official pitching (meeting room) – verbal story with a deck (deck should have as little text as possible)
- Sending materials after the meeting – written bullet points (executive summary)