I remember the first business plan I wrote like it was yesterday. I had just joined Maxim Integrated Products, and my boss, the late Ziya Boyacigiller, asked me to develop a plan for Maxim’s Voltage Reference business. The Voltage Reference had been struggling, and it was my responsibility to turn it around.
So I set about developing my plan. I met with customers, and I talked with various engineers inside the company about our capabilities. I completed a 35 page plan, and I excitedly plunked it on Ziya’s desk.
The next day, Ziya came back to me and, always the teacher, suggested I share my report with Len Sherman. Len, at the time, was running Maxim’s applications group.
I told Len what I was up to, and I gave him my plan. He looked at then plan, and then he said, “This is way too long! No one is going to read it.
“You need to present this in bullet points, rather than in complete sentences.”
I thanked Len for his input, and I rewrote my plan. 35 pages went to 8 pages. I presented my new report to Ziya.
Ziya was pleased with the new report. Then he told me a story about an aide giving a report to Henry Kissinger, President Nixon’s Secretary of State.
The aide gave Kissinger the report and the report came back with the note, “You can do better than this.”
The aide redid the report and the report came back again with the note, “You can do better than this.”
The aide, a little frustrated at this point, redid the report one more time. He gave the report to Kissinger and said, “Mr. Secretary, I can’t do any better than this.”
Kissinger then said, “Okay, now I’ll read it.”
I have no idea whether the Kissinger story is true or not, but Ziya’s point was crystal clear to me:
Your business plan has to be in a format that your audience will read.
There was nothing wrong with my original 35 page plan except for that one small thing that Len pointed out to me: no one was going to read it. So I made it more concise, and I put my plan into a format that my audience would read.
As time went on, I was able to make my business plans even more concise. Most of my business plans were reduced from that original 8 page report down to around 4 pages.
My audience was Maxim’s CEO, Jack Gifford, and the other executives I was presenting to. They were able to quickly review the information I was presenting, and they were able to ask me any questions they needed me to answer. The result was we were able to, in a two hour meeting, quickly make decisions.
You can make your pitch deck act as your de-facto business plan.
After I became an Entrepreneur in Residence (EIR) at a San Francisco based VC fund, I presented the first version of my deck to Dave, the VC partner I was working with, when I was an EIR. It was a text-heavy deck based on my Maxim experience.
Dave looked at my deck and said, “Everyone’s first deck sucks.” Then we both laughed. This was the beginning of my new education.
I was learning a new language of communication. As sensitive as we were of being efficient at Maxim, Venture Capitalists are even more sensitive about being efficient than the best run public companies.
I quickly learned how to communicate even more effectively. Less text and more graphics were the order of the day. But, interestingly enough, the information included in a good pitch deck is the same that is included in a good business plan:
A. Introduction/Executive Summary.
Think of this slide as your whole business plan in one slide. You need to get these points across:
- What does your company do
- Why are you unique or why are you 10X/100X better than what’s out there
- How big is the opportunity
You don’t need to go into detail in this slide, but you do need to hook your audience. The best way to hook your audience is by making an emotional connection with your audience. That’s the trick.
B. The team.
This should be the executive team of the company. Just short bios on who is on the team, their titles, and their backgrounds.
C. Market slide.
You want to explain to your audience how big the market is (served and available) today, and you want to explain how big the market is five years from now.
D. How it works slide.
Here you go into a little more detail on how your product(s) obtain their strategic advantage versus the competition. The trick is to explain simple, but with enough detail, how you do what you do.
E. Product roadmap.
The point you’re trying to make here is that you have a pipeline of products coming and a timeline of when they will enter the market. You need just enough high level detail for your audience to understand where you’re company is going.
F. Competitive analysis.
I’m a big fan of four quadrant “perceptual maps” for this. The most important thing is showing ALL of the key competitors with the goal of differentiating how you are different (and hopefully) better than the competition. This is really useful way of framing the market on your terms.
Remember, your competitive analysis gives you the ability to frame the market you’re competing in on your terms. This slide should be identical to the marketing messaging you’re giving your customers.
G. Go to market strategy.
The purpose of this slide is to connect the dots between the market slide and how you are going make your target customers aware you exist.
I’ve seen too many entrepreneurs approach their go to market strategy as an afterthought. These are the entrepreneurs that usually don’t get funded.
There should be a clear strategy of how you are going to make customers aware of your product(s) and its benefits. If you can’t do this effectively, then your whole pitch will fall apart.
H. Business model.
Simply put, your business model is an explanation of how you’re going to make money. For example, if your business model is you are going to charge $99/month per subscriber, then you just need to say that.
I am old school on this. I like tables, not graphs. So for me, I prefer pro-forma income statement financials that show an investor all the pertinent financial information on one slide.
One final thought. The goal of your deck is to make it really easy for your audience to understand exactly what you stand for and what you don’t stand for.
If you follow these nine steps, you will have a complete business plan that has all the elements necessary to evaluate your company. Better yet, your pitch deck business plan is easy to modify as your company grows and adjusts.
For more, read: How To Successfully Pitch Your Business In One Slide