Chris Maresca

Listening to the Numbers

A couple of months ago, I sat down to help a company that was struggling to grow beyond subsistence for a few people. Before actually sitting down with them, I spent time talking to the CEO about the state of his business. It was clear that there was a lack of process and discipline, and this was not doing the business any favors.

In business, it’s critical to have ways of cataloging progress and give a historical perspective of what is going on. Sure, revenue is a useful reference point, but it says nothing about how the money was made – or how it could be made more effectively. Ideally, this would be rolled up into a financial model which used historical numbers to project forward. But even without this level of detail, it is still possible to derive useful information from even the simplest numbers.

After my phone discussions with the CEO, I clearly understood that the business was not doing whatever it took to generate business, and that my emphasis was going to be on more face-to-face networking and pitching to local companies.

So, there I was, standing at the whiteboard, ready to point out that their lack of revenue was due to not enough in person sales. But, as the CEO and VP of Sales went over what metrics they had about conversion rates, I suddenly realized that I was wrong. The numbers told the story – and the story was that there was no way that they could get the revenue numbers they needed without a radical change in the business. It was a relatively simple, but radical solution – to stop going after individual customers and instead focus on channel partner recruitment.

For this company, it was a revelation that their sales strategy was doomed to failure, and, for me, it was yet another lesson in listening to the numbers, even the few you might have.

What I look for in a pitch

Over the years, I’ve gotten many requests from people wanting help raising funds.   Most of the time, I find that they have failed to do their homework and that even the most basic elements are missing from their pitch.   I recently posted in a forum describing what I would look for in a pitch, so I thought I’d re-post it here, a bit cleaned up and expanded.

What I look for in a pitch

A pitch is several stories.  It’s the story about how you will successfully run your company if you get money and it’s much like a sales pitch.   But it’s not just your company’s story, it is also the story of you and the people on your team, the industry you are targeting, the story of your customers and finally, the ending chapter of your company.   Like every good story, these should have arcs that meet at some logic point.   And, like most good stories, it needs to be cogent, logical and progress along path.   All that said, what are the tangibles that I would look for in a pitch?  Well, here are some:

• Entrepreneurs should know everything about their business/market and I consider it a bad sign if I know even just a little more
• Know who I am, why you are talking to me and what your expectations are from me
• Have done their homework about investors, funds and criteria.
• Polished presentations & financials
• Business plans in the traditional sense are a waste of everyone’s time – I don’t really care if you have one
• A good, clear slide deck that lays out the future of the company (the story, see above)
• Detailed financials that are in sync with the deck
• Polished, articulate delivery of both the deck and financials (you need to know this stuff cold)
• A clear understanding of real and potential competitors, with a view of competitive differentiators
• A clear and complete executive summary that someone can grok in less than 10 min.
• A good website
• Finally, there should be some sort of working prototype or demo, esp. if it’s software.

There are tons of online and offline resources for learning how to do all of this and there really is no excuse for not doing it.  I would also point out that I don’t expect everything to be in the deck, just a good, compelling story about the future of your business, industry and customers.  That said, I expect you or your team to be able to answer every question I ask, in detail if appropriate.  And if you don’t know, don’t make it up.

So there it is, a basic outline of what should be in the pitch.   I would point out that there is a lot of other detail about what should be in there and that you should understand what your target investors are looking for when putting together your pitch.

Things that live on forever….

There have been quite a few memes in the past decade about the stupid things you do online living forever. Well, it’s not just the stupid things, you see. Just for kicks, I went back and looked at the website of the very first organization I built a complete, commercial web-presence for, back in 1995.

The organization in question was the US Travel and Tourism Administration (USTTA), a division of the US Dept. of Commerce that keeps track of statistics about tourism and generally tries to support the industry (which, BTW is either the first or second largest US export, depending on how it’s counted). I was working for a government contractor, Ellsworth Associates (which has since been sold several times over) and was the head webmaster, a huge deal in 1995.

My very first job was to build a web presence for USTTA, which we would up calling TInet (in the fashion of the day…). So I set about designing a look and feel that would work well.

Fast forward to 2010, almost 15 years, and, guess what, TInet looks almost exactly the same…. Check it out: http://tinet.ita.doc.gov/research/index.html

Fantastic, how retro.  I guess my 15 year old design was hugely advanced for it’s time.   Wonder if they are still using the e-commerce (shopping cart back then) code I wrote in Perl all those years ago…..  Hopefully it still runs on Linux.

P.S. Apparently there is no more shopping cart and it’s now running on IIS.  So much for progress.