Archive for the 'Guy Kawasaki' Category

The 10/20/30 Rule of PowerPoint

Posted February 10, 2008
Filed under: Guy Kawasaki, Pitching, entrepreneurship |
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The 10/20/30 Rule of PowerPoint

I suffer from something called Ménière’s disease—don’t worry, you cannot get it from reading my blog. The symptoms of Ménière’s include hearing loss, tinnitus (a constant ringing sound), and vertigo. There are many medical theories about its cause: too much salt, caffeine, or alcohol in one’s diet, too much stress, and allergies. Thus, I’ve worked to limit control all these factors.

However, I have another theory. As a venture capitalist, I have to listen to hundreds of entrepreneurs pitch their companies. Most of these pitches are crap: sixty slides about a “patent pending,” “first mover advantage,” “all we have to do is get 1% of the people in China to buy our product” startup. These pitches are so lousy that I’m losing my hearing, there’s a constant ringing in my ear, and every once in while the world starts spinning.

Before there is an epidemic of Ménière’s in the venture capital community, I am trying to evangelize the 10/20/30 Rule of PowerPoint. It’s quite simple: a PowerPoint presentation should have ten slides, last no more than twenty minutes, and contain no font smaller than thirty points. While I’m in the venture capital business, this rule is applicable for any presentation to reach agreement: for example, raising capital, making a sale, forming a partnership, etc.

Ten is the optimal number of slides in a PowerPoint presentation because a normal human being cannot comprehend more than ten concepts in a meeting—and venture capitalists are very normal. (The only difference between you and venture capitalist is that he is getting paid to gamble with someone else’s money). If you must use more than ten slides to explain your business, you probably don’t have a business. The ten topics that a venture capitalist cares about are:

  1. Problem
  2. Your solution
  3. Business model
  4. Underlying magic/technology
  5. Marketing and sales
  6. Competition
  7. Team
  8. Projections and milestones
  9. Status and timeline
  10. Summary and call to action

You should give your ten slides in twenty minutes. Sure, you have an hour time slot, but you’re using a Windows laptop, so it will take forty minutes to make it work with the projector. Even if setup goes perfectly, people will arrive late and have to leave early. In a perfect world, you give your pitch in twenty minutes, and you have forty minutes left for discussion.

The majority of the presentations that I see have text in a ten point font. As much text as possible is jammed into the slide, and then the presenter reads it. However, as soon as the audience figures out that you’re reading the text, it reads ahead of you because it can read faster than you can speak. The result is that you and the audience are out of synch.

The reason people use a small font is twofold: first, that they don’t know their material well enough; second, they think that more text is more convincing. Total bozosity. Force yourself to use no font smaller than thirty points. I guarantee it will make your presentations better because it requires you to find the most salient points and to know how to explain them well. If “thirty points,” is too dogmatic, the I offer you an algorithm: find out the age of the oldest person in your audience and divide it by two. That’s your optimal font size.

So please observe the 10/20/30 Rule of PowerPoint. If nothing else, the next time someone in your audience complains of hearing loss, ringing, or vertigo, you’ll know what caused the problem. One last thing: to learn more about the zen of great presentations, check out a site called Presentation Zen by my buddy Garr Reynolds.

How to Get the Attention of a Venture Capitalist

Posted February 10, 2008
Filed under: Angels, Guy Kawasaki, Venture Capital |
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How to Get the Attention of a Venture Capitalist

iStock_000002519960Small.jpgAt the Elite Retreat I gave an off-the-cuff answer to a question concerning getting the attention of venture capitalists. My buddy Wendy Piersall blogged about my answer, and it was a very popular. However, to truly help entrepreneurs, I’d like to provide a cogent list of the tips to get the attention of a venture capitalist.

  1. Get an introduction by a partner-level lawyer. He should work at a firm that does a lot of venture capital financings like my buddies at Montgomery & Hansen. Best case email/voicemail: “This is the most interesting company I’ve seen in my twenty years of legal work for startups.” Venture capitalists dream about calls like this—it’s the equivalent of a scoring shot that knocks the goalie’s water bottle off the top shelf.

    Incidentally, this part of the reason of why you should pay top dollar and use a well-known corporate finance attorney instead of Uncle Joe the divorce lawyer (even if he handles venture capitalists’ divorces). You’re paying for connections not only expertise.

  2. Get an introduction by a professor of engineering. Best case email/voicemail: “These students are the smartest ones I’ve ever had in twenty years of teaching computer science. Larry and Sergei would have carried their backpacks for them.” Arguably this is even better than the lawyer’s call if the school has a history of receiving multi-million dollar donations from its alumni—if you know what I mean.
  3. Get an introduction by the founder of a company in the venture capitalist’s portfolio. Best case email/voicemail: “My buddies are starting a new company, and I think it’s really cool.” For this to work, it would help if the person making the call is a successful company in the venture capitalist’s portfolio. Also, this would be a good time to tap your network in LinkedIn to find acquaintances in the portfolio.

    Here’s a power tip regarding getting to venture capitalists using LinkedIn. Maybe it’s only me, but I hate when a connection of a connection of a connection wants me to take a look at deal. LinkedIn enables you to just go direct, and that’s my advice if you can show success (see below). If you can’t show success, the connection of a connection of a connection is useless anyway.

  4. Show success. Suppose you can’t get any of the introductions mentioned above. Then the most compelling email/voicemail that you provide is this: “My buddy and I have been working in our garage, taking no pay, and with MySQL we built a site that is doubling in traffic every month. Right now, we’re at 250,000 page views a day after thirty days.” With this one sentence you’ve proven you can (a) make a little bit of money (“none”) go far, your architecture looks scalable so far (once in my career I’d like scalability to be a problem), and most importantly, the dogs are already eating the food.

    Another way to show success is to hit it out of the park at Demo or the poor man’s Demo we call Launch: Silicon Valley, but this is a game that only a few dozen companies can play in every year. Finally, you can provide links to articles singing your praises, but this only means that you fooled the press, not that the dogs like what you’re serving.

  5. Make sure your company is in the right space. No matter how you get to the venture capitalist, make sure that she is the right one for you. For example, if you have the cure for cancer, contacting a firm’s enterprise software guru isn’t the brightest idea, so get on the web and do your homework.
  6. Use a short email. The ideal length of your email is three or fourth paragraphs:
    • What does your company do?
    • What problem are you solving?
    • What’s special about your technology/marketing/expertise/connections?
    • Who are you?

    Here are some things not to do:

    • Attach a PowerPoint presentation. I don’t care if it even adheres to the 10/20/30 rule. Save it for the face-to-face meeting.
    • Use the word “patented” more than once. All it takes to file a patent is $1,000. No good venture capitalist believes patents makes your company defensible. They just want to learn (once) that there might be something worth patenting.
    • Claim that you’re in a multi-billion dollar market. Isn’t every company in a multi-billion market according to some study? At least every company that’s ever pitched a venture capitalist.
    • Provide a lofty financial projection. Most projections that I see show how you’ll grow faster than Google. Frankly, I wouldn’t provide any projection at all. It will be either too low and make your deal uninteresting or too high and make you look delusional.
    • Brag about an MBA degree. Most venture capitalists want to invest in hardcore engineers at the start. The MBAs can come later, so focus on engineering or avoid the subject completely.
    • Try to create the illusion of scarcity. Many entrepreneurs claim that “Sequoia is interested.” If Sequoia is interested, you should take its money. If it isn’t, then the venture capitalist won’t be either. Either way, don’t even think of blowing this smoke.

This posting is merely about the process of getting across the moat. To learn more about what to do once you’re there, read how to fix your pitch by Bill Reichert of Garage.

My Idea Map

Posted February 10, 2008
Filed under: Guy Kawasaki, entrepreneurship |
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from:
http://foundread.com/2007/08/14/my-idea-map/
My Idea Map

Editor’s note: Matt Rogers thinks big — not every founder would be brave (or rash) enough to claim s/he has a Google-beater. But we like big thinkers at Found|READ. More importantly, whether this particular idea has legs, Matt’s method of thinking about new business concepts, explained below, is worthwhile reading. Not all of us could map out the path we follow — or stumble down — as we generate our ideas. We’re grateful Matt is willing to share his here, which we’ve adapted from the original post on his blog, “Digging my own ditch.”

A couple of days ago I struck on an idea for a new search system which would consistently produce results more relevant than Google. So in this post I’m going to detail the process I used to get this idea in the first place and others like it.

I don’t believe that ideas “just happen” or “pop into the head”, I’m very much of the view that we develop them with repeatable steps. This is what this article is about – how to generate ideas.

I started thinking about this by noticing that most good business ideas can be traced back to a source (which I call the “idea genesis”) in one of three ways. In this post I examine those three “source-paths.” Then I explain how I use these paths to generate new ideas, including the Google-beater I mention above.

I use three simple strategies for generating ideas:
The concept transplant
Amplify the essence
The inhibitor remover

Each overlaps with the others, all are interrelated, all of them seem to work. I look at each one in more detail below, then I talk about how I use them to generate new ideas.

It is important to note that at their root all of these strategies rely on an idea which is already working. Why take the risk of trying something which hasn’t already been proved?

1. The concept transplant

The first strategy is exceptionally simple. Take an idea which works well, and apply it somewhere it’s not being applied. Making sure that you are not stepping on any patent toes and adding in your unique twist gives you your new proposition.
Social networking, for example, is nothing remotely new. People have been networking socially since the birth of man, people were even using the Internet to socialise and form networks, long before anything like “Web 2.0” was even considered.

The Facebooks and My Spaces of this world just took something which was already happening and did it online. eBay, took the concept of auctions and put them on the web. Guy Kawasaki’s start-up Truemours, just took the human desire to gossip about rumours and put it on the web. Aroxo – my own start-up – takes its base concept from the “physical” world, and applies it to the web. We are by no means out of ideas.

2. Amplify the essence

This is my personal favourite. This strategy helps us isolate surfacing human trends and needs. It requires that we look at something which is working, isolate the human need which is driving it and the amplify it. My Web 2.0 blog post attempts to do this for Web 2.0. Take something which is working well and isolate the core human drivers which sit beneath its success.

Starbucks, for instance, isn’t popular because it sells coffee. It’s still number 1 because no-one has quite captured its essence. Starbucks is a moment of solace, an air of sophistication, it’s a break from the storm in a crazy world. It is also excellent execution.
Apple’s success comes from its positioning of the computer as an expression (even extension) of its owner’s personality and from making computers easy-to-use.

3. The inhibitor remover

Here were looking for what is stopping something from working, typically in another medium, then we find a way to remove that inhibitor. Essentially, ideas which should take off, but hasn’t.

Instant messaging on mobiles hasn’t taken off in Europe. Why? Because people think its expensive being online all the time. And yet in most countries, it isn’t. An easy fix.
Video content on your computer (Joost, et al) hasn’t taken off. Why? Not because of a lack of content, but because being at a computer is not relaxation time, it’s active. But people consume television style content (as opposed to short YouTube clips) whilst sitting comfortably on a sofa.

4. The final step – applying the strategies

It is easy to trace successful business ideas back to an earlier Idea Genesis using these techniques, but knowing this doesn’t create potential Google beating ideas on a daily basis, that requires an application of the strategies. And this requires a few more steps:

a) an understanding of where you want to apply the idea (e.g. online targetting seniors, mobile/cellular targetting youth/how to beat Google, the next eBay)

b) knowledge of these strategies

c) exposure to plenty of completely unrelated, but successful ideas and business models

In the Google situation, I started from the premise that nothing lasts for ever, just as with Aroxo we’re setting our sights on eBay, for Google there will be a better way performing search. Then I’ll make sure that I’ve got a good understanding of the 3 strategies above by reviewing them in my mind a few times.

Finally, as I spend my time during the day, I’m constantly looking a how something is done and try to apply it using the strategies to my area of interest. Before you know it you’re finding ideas cropping up regularly.

I do this as a constant day-to-day process and maintain a list of potential ideas which I add to often. I find it useful as I walk around to evaluating and conceptualise the ideas I see around me, thinking how else and where else they could be applied.

These strategies can yield a lot of ideas, but not all of them are going to be brilliant brainwaves. Which means we need a way of sifting out the false positives which involves turning a rough idea into a worked-through proposition. And that’s the next post.

Debuting FoundWatch: “The Art of the Startlet” with Guy Kawasaki

Posted February 10, 2008
Filed under: Guy Kawasaki, entrepreneurship |
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from:
http://foundread.com/2007/12/05/debuting-foundwatch-the-art-of-the-startlet-with-guy-kawasaki/

Debuting FoundWatch: “The Art of the Startlet” with Guy Kawasaki

Today we introduce FoundWATCH, our new series of video Q&As with business luminaries — serial founders, thought leaders in entrepreneurship, big name investors, and more — all of whom will share their hard-earned wisdom for how you can be more successful with your startups.

Our first interview is with Guy Kawasaki, famously dubbed the “innovation evangelist” and a long time Silicon Valley-based investor. Guy’s seed- and early-stage venture capital firm, Garage Technology Ventures, is still known colloquially as simply “Garage.com,” a nod to the firm’s high status as an incubator of the dotcom boom. Today in “The Art of the Startlet,” Guy offers his rationale for how you can start a company with $25,000, or less — and why, for your sanity (and your success ratio) it is imperative that you do so.

“Life is simpler. There is a lot less pressure. It is a better way to go, even in a better economy, because more people can try more $25,000-things than they can [try] $2 million things.”

Guy first made a name for himself in the mid-1980’s, at Apple Computer. He was responsible for marketing the Macintosh. Jobs dubbed him Apple’s “chief evangelist.” Guy has since written eight books including, The Art of the Start (2004), a “battle-hardened guide for anyone starting anything.” It belongs at the top of your reading list.

Six months ago, Guy became a founder again when he launched the news site, Truemors. Web-based news is a crowded space. But Kawasaki isn’t daunted. His play: Truemors lets readers post rumors, which are then vetted through voting and made into news stories, or not. He evangelizes it as he did the Mac:

[we] believe in demonstrative technology—that is, products that enable the open exhibition and expression of information, emotions, and opinions. Where democratization implies that the many can read the content of the few, demonstrative technology enables the many to create content too.

Citizen journalism, plus. Truemors is an idea that has had mixed reviews. By Kawasaki’s own admission, that’s OK. If it will, he can afford for Truemors to fail. Not because of who he is, but because he started it on the cheap — with just $12,000. The fiscal risk of his experiment is low, which helps keep his emotional “costs” manageable, too. So, if Guy needs to quit and start anew on the next idea, letting go is more accessible, with less ache.Guy thinks you’ll need a bit more money than he needed. (“I was able to call in a lot of favors.”) Hence the $25,000 threshold. It still isn’t much money, but Guy lays it all out in “The Art of the Startlet,” even ticking off the things you should prioritize and those you should not waste a dime on:

“Do spend on engineering and good lawyers. Don’t spend on outside marketing or PR.”

Like all founders, Guy is busy. When he catches a break, he often spends it at a hockey rink in Redwood City, where his amateur club team holds a regular pick-up game. (A native of Hawaii, Kawasaki hit the ice because his four children play the sport. “It’s how I get to spend more time with them.”)This is where we caught up with Guy: sitting rink side, in a lounge, working on Truemors, off a wireless network he personally paid to have installed there, for just these sorts of moments.

Plenty of Found|READ pieces reference other of Guy’s wisdom. Here’s a list:
1) Settling on the startup idea.
2)Funding it.
3) Launching it.
4) Valuing it.