Published in the San Diego Union-Tribune, February 15, 2016
Fifty-two cards in a playing card deck. But no more than 15 slides in a pitch deck.
Bill Gurley is a partner at Benchmark, one of the most famous venture capital firms in Silicon Valley. They have invested in a few successes – eBay, Dropbox, Twitter, Uber, and Instagram – and there are 200 more, but you get the idea.
And this summer he wrote a blog called “In Defense of the Deck.” His theme was that the most recent crop of entrepreneurs have eschewed presenting a deck in favor of opting for a cordial discussion, a casual verbal presentation, a fireside chat if you will. And he says that is not going to get him there. A pitch for money is not the same as having a martini on the patio.
Gurley argues that the thinking behind presenting a deck is for the venture capitalist to see if the entrepreneur can tell a coherent story. You know, “Once upon a time …”
I love stories. I misspent eight years in Hollywood writing sitcoms. You needed to be able to tell the story to the network execs or the showrunner. You sat in a fancy room (just like the one in “Seinfeld” when they pitch their show about nothing) and you tell the arc of the episode, the plot lines for the main characters, their interactions, a few jokes and finally the wrap-up at the end. There was an accepted structure. And getting the job was based on your ability to tell your story in a very coherent way and in very short time span.
Neil’s note: The most famous story about getting the green light for the movie “Aliens” (1979) was this pitch – “Jaws in space.” Done deal.
Let’s go back to Silicon Valley 20 years ago. The entrepreneur was taught to write a business plan – a real 15- to 25-page business plan with words. That evolved into the power point presentation and the now ubiquitous “deck.” Words began to lose their meaning and sloppy thinking became more noticeable.
Gurley recommends strongly that the entrepreneur create a “killer presentation,” a powerful narrative. He believes a great deck can bring the investor to the VC equivalent of Q.E.D. – almost like a scientific proof – the desired conclusion being, “this is the truth, and therefore, this will be a great investment.”
Gurley has some other tips for decking.
Control the cadence. By that he means that the entrepreneur needs to not jump around. Each slide follows from the previous. Stay systematic. (And VCs are notorious for trying to knock you off your stride. They want to see if you improvise or get flustered.)
Numeracy – show the numbers, present the financials, have a business model thesis. I love this, because my nature is to focus on the math. I need to make sure that the entrepreneur can do math. When I see fuzzy thinking about numbers, it is like a red light alert.
Storytelling never ends. The CEO is the “storyteller-in-chief.” He sells the product and the vision and he motivates and rallies the troops. He is the inspirer of the team and the tireless promoter of the company.
And the subtext behind demanding a good story is that you really need to understand your product and your company in order to tell a compelling story. You can’t make it up. It forces clarity and rigorous thinking. And you only get 15 slides, so no extraneous stuff.
Storytelling can have surprises and suspense; it doesn’t have to be linear. I often weave multiple narratives at the same time, and then if I am good at it, like a magician, I pull the string and all the micro-stories coalesce into one complete coherent tale. In the end, the single primary goal is to capture the audience’s attention – and to thrill them with the chance to invest in you and your idea.
The pitch deck is merely the blueprint for a verbal performance in which the entrepreneur demonstrates mastery of the material and the ability to own the audience and bend them to his will. Pitching is a learned skill. A good place to study technique is to listen to the radio or to podcasts with a host.
Rule No. 455
Never let the truth get in the way of a good story.