Why you should use a pitch deck

28.03.2019   |  Featured  |  Press  |  Startup

They say the most successful entrepreneurs are the best planners, to the smallest details. That’s true, but if you want your start-up to attract the attention of an angel investor, you must know how to synthesize all the above details in a simple and clear formula. The document that contains that formula has been known in recent years as pitch deck. Since I’m perceived as an investor, I receive financing proposals on a weekly basis at least, both on Octavianpatrascu.com and on LinkedIn. Some of them are very attractive. However, I’ve noticed that startup entrepreneurs could earn a lot if they offered information in appropriate dosages and in an optimal sequence. And the pitch deck is exactly that: a short but relevant PowerPoint presentation, that takes you to the next level of the conversation, the one that refers to the money itself. 

What is the content of a pitch deck and how the pitch deck should look

If you visit Slidebean, you can find famous pitch decks from companies like Airbnb, Facebook or Uber. You will notice right away that this kind of presentations have around 10 to 20 slides and generally answer the next questions:

  1. Problem and solution. There is no business without a real need on the market (the problem), and the solution is the business you want to launch.
  2. Description of the market. Even innovative businesses are connected to an existing market. Let’s say we’re considering a TV landscape like the years 2,000, where there is no Video-on-Demand. The consumer’s problem would be that he wants to watch movies whenever he wants, having a broader choice than his own DVD collection. Your solution is disruptive: an online platform. But the market where you’re starting from exists: it’s the one of classical televisions and of DVDs rentals. By the way, maybe you know – Netflix started as a DVD rental company.
  3. Defining the product. No more than two or three slides, but try to depict your vision using mock-ups and other visual means.
  4. The competitive advantage. We know from the Economics manuals that a successful business must have a competitive advantage in front of the businesses that already exist on the market. In the Video-on-Demand example, there are several: large offer, ease of use, accessibility (from anywhere), reduced price.
  5. Your history. It’s risky to search for investors without being able to show some background or previous steps. From the establishment of the company to a proof of concept, such assets are welcome and show that you have the capacity to build.
  6. An augmented projection of growth. It will have to include both the market segment and data referring to incomes and expenses are mandatory. Again, you can’t keep someone’s attention with more than a few slides, so detailed budgets should be saved for the business plan, which may be a discussion topic in the next stage.

If you study the examples at the above link, you will see that pitch decks don’t always follow this sequence. Still, in my opinion, they should answer all the above questions in a convincing manner.

Speaking of the graphic aspect, I won’t get into details, but you probably know the rule that you need to avoid slides that contain only text and fill your presentation with as many graphics and visuals as possible. If you don’t have any special graphic skills, avoid fonts and paginations that are too fancy. PowerPoint, from MS Office, is a pretty good presentation software, if you don’t wish to spoil the templates they offer. An alternative such as Keynote (for Apple), Google Slides (Google Docs) or Prezi (online presentations) offers a slightly different look & feel, with more personality. Take care, however, at the portability of the file, because you’ll have to send it to others.

How to use the document

There are two scenarios in which a pitch deck is useful. The first involves a form of interaction, either face to face (presentation rooms, 1:1 meeting), either online (a platform like Slack, Skype etc). In this case, you have more freedom in the pitch deck, as the slides don’t have to match exactly with what you’re saying – and you’ll be able to avoid the text excesses easily.

The second form of presentation is unilateral: the file is sent – usually, by email. In this case, it will have to be self-explanatory, without somebody’s verbal help.

Plan the material or adapt the one you have, according to the situation. And, why not, according to the investor you are contacting, whose track record you should study.

What you can win

Several years ago, Microsoft was stirring up the communication world with a study in which it stated that the attention span of the average American is 8 seconds. An angel investor will listen, usually, more, but as he has experience he will have a very sensitive bullshit meter. Remember that the first contact with a potential investor is crucial for the (un)success you will have and that his availability is limited. Let’s say the first step is easy: anyone will listen to your first words at least out of courtesy – and an investor must listen since it is his job description. But in the next seconds or minutes (of investor attention, if not actual) you’ll be able use all the help you can get and a pitch deck is essential.

And, finally, pitch decks have a huge quality: they help you clarify and learn how to phrase your ideas in a concise manner, that can also be understood by potential partners. Which is a different kind of help for the entrepreneurs who are at the start of their careers.

A Romanian version of this story appeared in the Capital business magazine.

Octavian Pătrașcu  |   28.03.2019   |  Featured  |  Press  |  Startup

Three things to test and maintain in HR: hard skills, soft skills, and motivation

25.04.2019   |  News  |  Startup
The quality and efficiency of an employee mainly depend on their professional qualifications, but the modern human resources theory refers to this only through a partial term, namely "hard skills". In terms of evaluations and professional management, these “hard skills” are supplemented by a range of different qualities defined as "soft skills", such as the motivation that an individual demonstrates or chooses to develop.

Hard Skills: Easy to identify, necessary, but not enough

The term "hard skills" applies especially to fundamental professional knowledge, skills, and abilities, but not only. For example, if a programmer has to write code in Java, he will obviously have to know the programming language. In the field of hard skills, however, complementary skills such as foreign languages ​​or driving licenses also come into play. If the job description is not IT-related, the computer skills - quasi-generalized today - are also in the same complementary category. Upon hiring, hard skills can be easily tested or proven. Basically, all the skills in this category can be certified through a diploma or a certificate of qualification. These skills are the basis for the future work of the employee, but in the vast majority of cases, they are not enough to ensure good performance at the workplace.

Soft Skills: harder to test, especially required for higher positions

These are somewhat social qualities, relating especially to people-interacting abilities. Soft skills include teamwork skills, communication skills, leadership qualities, and the ability to solve problems as they come. From simple politeness to a nonconflictual attitude, a whole range of attributes can be added here, including good time management or the desire to conform to strict professional ethics. If hard skills are easy to identify, in the case of soft skills, the stereotype enumerations present in CVs are never enough proof of their existence. They can somehow be felt when hiring, during their interview or, possibly, through psychological tests set up by human resources specialists. As they mostly focus on human interaction, soft skills are increasingly needed as the position of the employee in the hierarchy is higher, but the situation differs from one job description to another. If the programmer we had as an example earlier does not necessarily need soft skills when writing code, a sales or marketing specialist will interact with the top management and thus cannot work without them.

Motivation: differs from case to case

Motivation is a problem that concerned psychologists way before Maslow's Human Pyramid of Needs. There are many hypotheses and models that relate to this theory. I will just state that a first classification refers to financial and extra-financial motivations. The former refers to material compensation and are accepted unanimously. However, since the beginning of the 20th century, it has become clear that there is no direct link between payment and the efficiency of a person. 100 years ago, however, besides the famous $5-a-day salary, Henry Ford offered land lots, kindergartens for their children and, in the case of immigrants, English courses to help them integrate into the mass production processes. Today, large companies provide health insurance, relaxation areas, various educational classes, physical activity facilities. All of these include career plans and contract terms that offer job security and much more. Perhaps, the first thing to remember is that motivation differs greatly from one employee to another. Effective management should be as flexible as possible, in accordance with the needs and incentives of employees, beyond the standard packages.

The Employer’s Perspective

From what we described above it seems that that the employer will consider the three components as we’ve structured them. Hard skills are easy to identify and absolutely necessary to ensure performance in a particular position, so these are the first ones that will be tested. Soft skills can be identified to a certain extent in the midst of the employment process, but initial perceptions can be confirmed or denied later on. What’s more important is sustaining them at the workplace, often as a necessity for promotion on a higher hierarchy level. As final words, motivation has qualitative rather than quantitative aspects. Employers should be less concerned about the answer to the question "how motivated is an employee?", but rather show concern towards the type of motivation that employees are most responsive to. Schematically speaking, if hard skills are mainly the employee's concern, soft skills relate to a process that takes place between the employee and the company, and in the case of motivation, it should meet the needs of the employee. Only by paying attention to all the three components, the employer and the employee can have a mutually satisfactory and productive relationship.
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