Dr. Earl R. Smith II
Managing Partner, The Federal Circle
DrSmith@Dr-Smith.com
Dr-Smith.com
This is a proven method for improving the chances of success. Not rocket science – nothing very difficult – just a straightforward and logical approach to a recurring challenge. If you are out to win – this has to be one of the tools in your toolbox.
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The beginnings of a good idea
Recently I sat in on a presentation that two founders of a technology start-up made to a front-line venture capitalist. What was most striking about the experience was that, from one point of view, the founders seemed very well prepared. Their presentation was polished and contained all the usual sections, their slide show was professional quality, and they spoke with passion and deep knowledge about their space. The materials which they provided were all neatly and professionally packaged.
But early in the meeting it became apparent that the team was not prepared for what they were encountering. Their pitch was clearly more appropriate for a group of fellow technologists. They had not taken into consideration the predictable concerns and perspective of the person to whom they were presenting. The VC had interrupted the flow of their pitch with a couple of completely normal threshold questions and it went downhill from there.
After the session I asked the investor how frequently this kind of thing happens. He shook his head and responded “More often than I would like and far more often than needs be. The tragedy is that it doesn’t have to.” When I asked what he meant he replied “I’m probably the first outsider that they have ever given this presentation to. As a result their pitch comes to me without any real critical review. But what is most discouraging is that their entire presentation was not focused on my concerns as an investor but on a ‘preaching to the choir’ gathering of their peers. And what they don’t seem to realize is that mine is a very tight community and we talk to each other on a regular basis. What these guys did today was not only establish a negative brand with me but with any others that I end up talking to about them.”
I immediately understood what he meant. One of the services I provide to clients is the establishment of an advisory board designed as a high level, business development engine. I had built such a board for a company that is in the enterprise level software business. One of the company’s proudest achievements was that they had earned a high level of certification for their software development process. This certification was prominently mentioned in all of their promotional materials and on their website.
The senior management team was presenting during the first ever gathering of the board. The advisory board consisted of five very high-level individuals with an average of three to four decades of experience. Most had built businesses or run very large organizations. All of them had risen to the top of their profession. This first meeting was designed to bring the board members up to speed.
The software certification was prominently displayed on one of the earliest slides that the chief operating officer presented. One of the board members interrupted the pitch with a question, “OK, I’m one of your customers. Other than making your software more expensive, what is the value of this certification to me?” It quickly became clear that any answer which the team could offer was focused on the ‘choir’ – those individuals who had already bought in to the value of the certification process. They were not able to provide an answer from a client’s perspective. As a result, they lost the confidence of the board and had to work hard to get it back.
As I related the story my friend nodded and ruefully smiled. “I’m glad to see that this happens to other people. I had taken to thinking that mine was the only profession that encountered this kind of thing.”
As we talked and told war stories, a conversation with a former partner in the movie business came back to mind. Sy had been talking about how much more difficult it was for new talent to get experience since the demise of a vast network of performance venues that used to serve as incubators. Again, there was the pattern. People need a space where they can knock off the rough edges and focus their presentation.
What came out of this was a vision for a kind of ‘presentation boot camp’ – a space where founders could refine and focus their pitch without incurring the liability of having to learn under fire – and avoid establishing a negative branding in front of potential investors to boot.
This is exceptionaly true, i always try to have an advisory board at all times, and where i fail, i always ask my wife to be one. When i approach my wife im usually simple, ”Pretend to be the person im presenting to, and be critical as much as you can” the results are enormous, because she will point out something minor that i might ignore but has a huge impact. I get results through this way and most of the time Advisory boards want to be paid for their time, therefore my question is ” How do you attract an Advisory Board with out fees?’
I’m glad that you found the article interesting. It is based on years of experience with professional level red-teaming. Every major company uses the approach and, increasingly, mid-level ones are too. Many times the red-team has highlighted weaknesses in the presentation, team or business plan. Working on those area prior to presenting to funding sources has significantly increased results.
As to advisory boards, I build them as business development engines. The good rule is that you get what you pay for. People with the ability to contribute to your business will seldom make that contribution for free. I describe how to build, populate and manage such an advisory board in Volume two of my CEO’s Handbook series. http://www.dr-smith.info/about/books-by-dr-smith/the-ceos-handbook-volume-two/. It’s available in eBook formats.