THE STARTUP CHAT

Steli: Hey, everybody. This is Steli Efti.

 

Hiten: And this is Hiten Shah.

 

Steli: And in today’s episode of The Startup Chat we’re gonna talk about how to create a killer pitch deck. Now, there is a … before we dive into what that means and the tips and tricks and tactics we’ve seen helping hundreds of thousands, even founders raise money and improve their pitch decks. I want to just tease that there’s a product that Hiten is Launching very soon that’s going to be all about helping you improve your pitch deck. We’re going to talk about that a little bit more towards the end of this episode. I think this is an exclusive, nobody knows that this is coming, right?

 

Hiten: No, I haven’t really told anybody. I barely tell you about it. But, I’ve been working on it for a while.

 

Steli: That’s so true. So, me and all of you that are listening we’re gonna be, we’re gonna hear the first few kind of insights and intel on this new product that Hiten is launching so I’m super excited about that. That’s just the tease. Let’s actually jump into the topic of creating a killer pitch deck. Now, I get maybe a hand full of pitch decks a week sent to me where people ask me for feedback or for advice. I know for you it must be a lot more, right? You’ve helped countless start ups raise money and improve their pitch deck. So, lets just dive right into it. When people today in 2017, when they sit down, open you know PowerPoint or Keynote or whatever they do and they think “Shit, I need to put together a presentation so I can go out and raise money.”. Where do people start and where shouldn’t they start? What are some of the mistakes people make that they should avoid? What’s the framework that you advise people to use when they start at zero?

 

Hiten: Yeah, it’s … This is just a ridiculous topic just because it’s the number one problem that start ups have when it comes to just like fundraising in general. The pitch deck is you know, one of the statements and again I haven’t shared a lot of this so it’s funny for me to actually talk about it. I usually share everything. I’ve just been working on it and focused. But, basically what I like to say is pitch decks are the new business plan. So, back in the day you had a business plan and people would use that to judge your business and they’d give you money. That had a lot to do with starting with how you know, people would go to the bank and get money for their business. Or they would go to friends and get money for their business. This is how people go money for their business, right?

 

Steli: Right.

 

Hiten: And this was a long time ago. This is what historically happened. Then we had venture capital, right? And, a lot of things changed. Then we had technology and we could buy servers and we had more scale with software and all those kind of things. Like, back in the day you we’re able to actually raise money, I’m sorry you we’re able to build a product until you raised money. So, you needed this elaborate plan ’cause people had to believe in what you were doing and that you thought through it. Now, it’s like you launch something, you get some traction and then you’re creating a pitch deck and raising money from a bunch of angels and stuff like that. That’s the most common method today. Which is people are getting really really fare before they raise money. So, if you think about this even in whycommidator which I know you see a lot of applications and others. Like, your pool of people who come to you for help is probably like people who are trying to get into YC and then people that are international founders. I would just imagine, right?

 

Steli: It’s a … yeah, it’s like YC founders and then people that want to get into YC in to 500 startup, international, and sass …

 

Hiten: Yeah.

 

Steli: Specific. But yeah, that’s a good guess.

 

Hiten: Right? So, like that’s like at . And, what’s interesting about that is like all those folks, the majority of them I bet are coming to you and they already have something.

 

Steli: Yeah.

 

Hiten: They have something to talk about, they have a product.

 

Steli: Yeah, it’s very rare … almost, I almost never see somebody come that has nothing, just an idea. It doesn’t happen. Yeah, you’re right.

 

Hiten: And that’s like what’s really impactful to me when I thought about that. Because, there are so many traditional people out there that don’t understand it. They don’t understand that a business plan isn’t what you use to raise money. And, I know most of our audience probably gets this, but if you don’t you need to understand that getting a product out there, getting customers, or users and then raising money that’s what works today. That’s the majority of what’s out there. We should start acting on that fundamental level before even moving on because, otherwise what happens is what you crate is a pitch deck that looks like a business plan from 20 years ago. It’s all made up, right? That’s the biggest mistake people make is they make the numbers up. They make guesses, they make hypothesis, but have no evidence that it’s going to work. That’s the opposite of what you need in a pitch deck. You need actual … you know, in my opinion it’s like a story of what you’ve done, what you’re doing right now and what you’re going to do in the future. So, as I’ve studied these things and realized what works the best it’s actually this model where you talk about the past, you talk about where you’re at now, so the present and then you talk about the future. What people forget is that investors are investing in the future. Most pitch decks I see, they don’t have enough about what’s going to happen next. They have so much about what’s happening now. They don’t even talk about the past and their own story of how they got here and then they forget about the future. When an investor gives you money so you can take the money and grow a business and make more money, right?

 

Steli: Yeah.

 

Hiten: What the other … like there’s no other point here.

 

Steli: And the main thing that people forget is that no matter how … you want to use data, you want to use numbers, you want to use research, right? All that stuff is good, but it’s all to support a story. At the end of the day if I invest in the future I need to … there is a requirement for me to be able to do that which is I need to use my fantasy to either believe in your future or create a future that I find compelling as an investor. I need to buy into a storyline I need to buy into that this thing is going to take off and this thing is going to have as the world changes or as this thing changes the world there’s going to be a lot of value created and I’ll be able to be able to be part of that exciting ride. Too many people they give, you know they … include in the pitch deck all the numbers, all the data, all the research which is awesome, but then they leave the investor alone to come up with the story themselves. And, to come up with the future themselves. What does this mean for the future? How big could this really be? What is the trajectory of it? And, that’s too much work to be done to the audience, right? You really want to tell that compelling story, you really want to stimulate somebody’s imagination and fantasy. I love the format that you describe which is like tell people what happened in the past. You know, kind of take me on the journey of how you started and how you got here. Where you are today and where you’re going next. And why is this journey exciting and why is it exhilarating and why is it fast and why is it growing massively? That kind of … it’s a simple formula, but it’s one that’s very, very powerful.

 

Hiten: Yeah, I mean it’s the ultimate way that I teach people how to make their pitch deck and I’ve been doing a lot of that kind of work just so that I could build this product with my business partner. We’ve been doing a ton of work around pitch decks and story telling and learning about it. And, you know …

 

Steli: And, and …

 

Hiten: Yeah?

 

Steli: When Hiten says putting together a killer pitch deck is the number one problem that people have when they raise money, that’s not just opinion you actually have done a ton of customer development and research and interviews and discovered that through data. Not because you kind of just thought that that’s important.

 

Hiten: Yeah, I didn’t realize how important it was truthfully, Steli. I thought it was like you build a product, right? You know how to do that and then you get some traction and then those numbers speak for themselves. But, I’ve seen businesses that are great, making money, will grow in the future that can’t raise money because they can’t tell their story at all.

 

Steli: Yeah.

 

Hiten: And, it is story.

 

Steli: What about adversity? So, let me ask you when I do, when somebody tells their story and their like here’s the past, here’s the present, here’s the future. Just like thinking about story telling 101 how useful or valuable is it when they include some of the adversity? When it’s not just like “We had this idea and boom, boom, boom we launch it and we had all this growth and all this press and we had all these people and it’s just going to be this massive ride and everything is great.”. Obviously, that’s exciting right when and you want to show that you were able to execute really fast and that things are moving in an exciting pace. But, how do you feel about including if there is, if it’s authentic not just making it up, but including some of the “Oh, shit” moments when something goes wrong and there’s a big problem and how the team overcame that. Just thinking about storylines and how to make them even more compelling and if that’s something that investors you think would wanna hear and that would influence them getting even more excited in putting money into the company.

 

Hiten: Yeah, I mean … you know, on all this stuff it just goes back to inventors want to invest in great businesses. Right?

 

Steli: Yeah.

 

Hiten: And you as a founder you want to build a great business. Is there anything more to it? That’s the question that I first pose to any entrepreneur. You want to build a great business, the investor wants to invest in a great business. So, basically your whole story, your whole pitch, even your whole execution should be designed around how does this turn into a great business? Not how does this look like a great business, not how do I make up a story that is fake that makes this framed really good. No, it’s like, do you have a great business? Is it attacking an important enough, large enough market, right? And, I don’t mean to talk about market size slides or anything. It’s just like your own evidence against this. Like for example, in your business closed out IO. Someone early on could come in and say “Oh, you’re crazy. You’re going after CRF.” You could rebut them and say it’s one of the biggest markets out there even if we get a little, little tiny portion of it we could be a massive business. And, lets not even talk about how many acquirers there are for a business like this. Which, you shouldn’t talk about in your pitch deck, but it’s just naturally where investors should go in their head when they think about market and market size. It’s not that you should show that it’s just that like this is an obvious important problem. So important that businesses are paying tons of money for it. In your case you had a very specific angle around it where you integrated a bunch of features into a single tool set. Not a bunch, but really important ones with the calling and tracking of that and all that kind of stuff, right? So, you had an entry point. And by the time if you had to give a pitch early on you know weren’t NYC or anything, but you had some traction you have a compelling pitch. You have customers, your sales people yourself so you’ve got the perfect story of like why you should be the one doing this. You were helping a bunch of sales people, you know and then you created this product because you needed it. You know, and then you pivoted your whole company into doing this and now you’ve got a team attacking this problem. You even did some of the hard things like let go of a lot of sales people that you were training and working with because you had to. I mean, the story’s brilliant, it’s great right? But, you know I know a lot of people listening are like “Oh, but this is Steli.” Yeah, fuckin’ Steli’s awesome. Excuse my language, but like that’s not the point. Steli made that story happen. If you know Steli’s you knew, you know just like me we were both dip shits at some point, right? With no clue what we were doing. And, many of you might think of yourselves like that. Not that you are dip shits, don’t get me wrong. But like, this is about how do you just logically take something and make it great? Like make it … not even appear like a great business, but have all the metrics, have the traction. I think one of the most important things is there’s a whole book on traction and all that. I don’t mean that kind of traction. I mean literally you’ve de-risked parts of this business. So, in your case Steli you de-risked the fact that nobody would use your product if you put it out there because by that time someone was using it. In fact, you de-risked the fact that you knew the problem because you were doing customer development every day that you were making money in the consulting business.

 

Steli: Yup.

 

Hiten: By basically building the product. You know, and look I’m telling this story in a way where I’m sure there is a lot of details I’m missing and all that, but at the end of the day the investors don’t care as much about the details, honestly. What they care about is the essence of the story and the fact that it’s true enough.

 

Steli: I love it. Yeah.

 

Hiten: And that’s the start. That’s a lot of the past stuff that people don’t do. They don’t describe themselves in that way. They don’t talk about a big trend like “Hey, because of Twilio this technology is easier than ever to do and nobody’s integrated it at all or well into CRM today.” Just as an example you know, I don’t know if you guys are using Twilio or not, I don’t even know if that made your life easier. But, either way I can point to trend that you can put in your past type of deck that would show the evidence that there’s less risk that an investor might be thinking initially because you are attacking a CRM market with a massive set of encompass.

 

Steli: So, there’s a lot, a lot in here. I think that one thing that always surprises me is how people sometimes have a hard time to see what the most compelling part of their story is even if it stares them in the face. So, people a lot of times just hadn’t learned to tell their story in the really compelling way. I was just meeting with a 500 startup team the other day and they were telling me about the company and we talked for like 40 minuets about everything they had done. Then eventually he made this side comment that I was just like “Holy shit that’s … you should always start telling the company story, but telling this.” Because he had built something that allows people to … that allows people that are not in a great finance school to get a really amazing job in finance by playing this stock market game during class and getting top ratings. And then having big investment firms use the software. So, similar to a stack overflow to hire interns, to hire talent. Based out of their trading history during school over the last six, nine, twelve months or whatever. The compelling part of the story … they have a lot of traction, they’ve build a really cool product. There’s a lot that’s going on that’s really really nice, but the thing that stood out and made it even more distinct and interesting was that the reason he started it … there’s a backstory where he has an older sister. And his older sister is kind of the over achiever in the family and he’s always been like number two. She got into the best school ever and got the greatest job ever. He got into a shitty school so he couldn’t get a job in finance and then he had to do all these things to kind of display that he’s really good at certain things to get a job in finance which made him come up with this idea. Right? Now he’s proven it to … they let, they helped hundreds of students land really great jobs out of schools that typically don’t have a good success rate when it comes to that. The thing that drives him, the back story of having a sister that always overachieves and him not getting into a good school and struggling getting the job he wanted. That is like such a compelling part of the story, to me at least that explains the big why. Like, why did he do this? Why did he come up with the idea? What’s driving him? And, it’s a why that connects with many many people. There’s so many talented, incredibly smart people that just didn’t make the perfect choices when they were young so they’re not in the right school, they don’t have the set up to have the biggest jumping board to massive success. But, they’re still incredibly talented and we’re not tapping into that human potential pool. How do we help these people get the best jobs possible? How do we help companies find these talented people even if they’re not in the ivy, you know, A++, biggest, best school ever in the world. And, that’s such a powerful part and he totally … like he just said it as a side comment after talking to me for an hour and would have never thought about making that part of his storyline or pitch.

 

Hiten: Oh man, I love that. I mean I know this episode’s basically over.

 

Steli: Yeah.

 

Hiten: Just on that note for a bunch of reasons and I’ll summarize and then we should make it over. I think this is a topic we’ll keep talking about for a bunch of reasons. One, like I have a product I’m building that can help anybody, it’s free to use. Two, you and I deal with this every day. You know, like people hit us up and we’re like … we’re able to grab their story out. So, the point I’ll make that’s really big here is like the amount of business that are started every year, especially on the startup side that are seeking funding is increasing. Even if some years it dips a little bit it’s just increasing. That means investors are seeing so many new things everyday. Every week. Like every year and it’s just hard for them to parse what’s good, what’s bad. They’re looking for signal. They’re trying to figure it out. More importantly, there’s a story that you need to tell them. There’s a reason you’re doing this that they will remember. Like what you just said, I will never forget. I don’t know the company name, I don’t know anything, but like I won’t forget the story you told me about how his sister was an over achiever, got in colleges and was ahead of him so to speak and he wanted that and he couldn’t get it. For whatever reason, right? That’s a struggle. If you think about like superheros and your origin story that is so classic and you were able to dig that out in like two minutes of an hour conversation that he had. And then you probably told him like you said you made him, you had him, you recommended to him he starts there with his story. One of the reasons you do that though which is really powerful is then you get passionate about the rest of the deck. You get passionate about the rest of the pitch. So, I would say you nailed it. You got exactly like kind of what I end up teaching people over and over again and I almost feel like a magician sometimes ’cause you just let them keep talking and you’re like “Wait, that little thing right there that you think is not that important, that’s the whole story. You start with that it almost doesn’t matter what you say on the rest of that deck.” Because they’re gonna remember that and they’re gonna have a way to share your unique story with whoever they need to in their partnership, other investors, whoever so that it becomes a compelling thing that they want to do. All I can say there is just like start the story with why you did it. I think what you said about it being you know, your why. Super important and that’s almost like you know, maybe one hundredth of what we can say about pitch deck, it turns out.

 

Steli: That’s awesome. So, three things … oh, two things.

 

Hiten: Go for it.

 

Steli: Number one, if you want to learn more about story telling for entrepreneurs listen to episode number 60. Hiten and I talk a lot more about story telling and our story telling techniques there. Then if you want to hear about our entrepreneurial origin stories listen to episode number 15. The third thing is I know that a lot of founders today when they start the pitch deck the first thing they do is they go to Google, they type in pitch deck templates, pitch deck successful raising money, pitch deck. There’s a lot of older decks that have gotten all the SEO juice because of whatever reason. Pitch decks that are seven, eight years old that every day you get these decks and I get them too where I know exactly which google result they got ’cause I’ve seen the same template so many times. And, it’s not working and it’s not working anymore and it’s not working for them. That’s a big part of why you’re developing a product that’s going to help a lot more people rather than just reading some article that’s seven years old and copying somebody’s pitch deck there. I advise people don’t do that and instead if people want to be early on board when it comes to using your pitch deck software, Hiten how do they do it? Is there a landing page or can they contact you? If I listen to this and I’m like “Yes, I’m trying to put together a pitch deck and I want Hiten’s help and I want to use his product” what do I do next?

 

Hiten: The name of the product which I’ve never shared with anybody.

 

Steli: Oh, I don’t know it either.

 

Hiten: Is dogo. d-o-g-o. Because of my business partner’s branding skills it’s all lower case. So, d-o-g-o all lower case. We don’t own the dotcom yet, but we have getdogo.com. We say dogo, it’s not dawgo or anything like that.

 

Steli: Okay.

 

Hiten: But that’s okay, people will butcher it. We’re ready for that. So, it’s getdogo.com and if you go there and it’s not live yet then you can always email me. Hnshah@gmail and I’ll happily give you access. It’s only valuable to you as of today when you are raising money. Or when you’re … actually, before you’re raising money when you’re making your pitch deck and want to get feedback on it and then want to share it with investors. So yeah, that’s my short blurb about it and it’s free to use. We’re not charging for anything and we might never charge for anything, not sure yet. Just want to build it ’cause again, super important problem and it almost feels like we could have 50 episodes on this.

 

Steli: So awesome. I’m so excited about it. Getdogo.com, super pumped and that is it for us for this episode.

 

Hiten: Thanks.