To date, most of our Power Breakfasts have focused on a specific technology or market sector. This past Tuesday, we took the opportunity to host a hands-on, very interactive power breakfast on important skills for building your company – namely, how to craft a powerful story and use it for fundraising and sales.
Any company needs to be able to tell a good story – and give a good pitch. Regardless of the audience, the component parts of the story might include: a problem statement (what challenge are you solving?), how you are solving or addressing the problem, a target market or markets, identification of the buyer or customer, and at least a glimpse of the underlying economics.
On Tuesday, December 13, we were joined by Bill Lenihan, President and CFO of Off Grid Electric, Lisa Caswell, an Executive Talent Consultant with Spencer Stuart, and Steve Weiss, Co-Founder of Grey Heron, a company strategy consultancy. Prior to Off Grid Electric, Bill spent 14 years in private equity before moving to the operational side. Prior to Spencer Stuart, Lisa Caswell was President of eMeter through its acquisition by Siemens. Steve Weiss brings years of experience helping companies like Genomatica, Imprint Energy, Aspen Aerogels, and others set business strategies through his consulting firm, Grey Heron. He was recently described as “arguably Silicon Valley’s leading guru on corporate strategy” during an interview with Jim Lane of Biofuels Digest.
Our audience consisted of 90 percent start-ups or growth-stage companies, with interesting segmentations that helped fuel a robust discussion:
- There was a nearly 50/50 split between those saying they were still at a pre-revenue or technology-development stage, and those who have some commercial traction and revenues or are focused more on selling.
- Roughly 25 percent identified more closely with the statement, “we have some competitors and the greater challenge in storytelling is creating differentiation.” Whereas, another 25 percent identified more closely with the statement, “we are doing something truly unique that people have not yet seen, and so the greater challenge in storytelling is educating people on what it is.” The rest (roughly half) identified somewhere in between or acknowledged both as challenges.
- The vast majority acknowledged being in a current (or perpetual, because, let’s be real…) state of fundraising.
Tailor the hook, and react effectively
First established was the importance of simplicity and clarity. A brief and effective intro will give the audience elements to grab onto, getting them engaged by asking for deeper information on one component of the story or another. Like the band Blues Traveler admonishes, the hook brings you back.
However, the conversation quickly arrived at the caveat that the hook needs to be tailored to the audience as much as possible. You should be prepared, at a minimum, with different versions of the company story or pitch based on whether you’re going into a fundraising conversation, a business development conversation, a technical partnership, or trying to recruit good talent to join you.
There was some acknowledgement of challenges in the cleantech space with telling a compelling story that fits both the sales and fundraising sides. The answer we seemed to arrive at was that – for most markets – investors should naturally come from your customer base.Executives should worry less about tailoring initially; instead, they can aim to reach a point in a conversation to be reactive to whichever side –sales execution/customer versus fundraising – appears to resonate most.
The importance of discovering and tailoring to the audience on the fly is the next level of this preparation.– Listening and reacting where possible, and more tactically honing the ability to quickly pivot if the version of the story you’re telling is not resonating. . Effective reactivity also includes knowing the holes in your story – or common gaps that certain audiences are likely to question – and being prepared to address them very directly if and when they’re brought up.
Who needs to be able to tell the story?
Everyone in a company should be able to relate the basics of what the company is about, in a handful of sentences. This likely – or should – correspond to the “About Us” in your press release boilerplate. If there is confusion around this – or it seems hard – then you probably haven’t really aligned on your strategy. Your story is a reflection of your strategy, and you need to have that buttoned-down first. Our discussion therefore focused on the importance of empowering everyone in the company to be a good storyteller, even if there is reluctance. When it comes down to it, everyone in the company is in sales. Our executives acknowledged spending time on this, even putting a phone camera in employees’ faces and making it fun, while helping hone their story.
Along those lines, we uncovered an acknowledgement that it’s important to let the individual make it their own. A sales person with years of business development, a CFO, and an engineer will likely have different strengths that show in the telling of any version of the story, and they’re likely to remain ineffective at communicating aspects of the company (or product) story they have the least experience or knowledge in. There was also encouragement to be genuine, not just re-hashing what the marketing person tells you to say.
Economic animals vs. emotion and impact, buzz words vs. jargon, and knowing what you want to be
On the fundraising side, there was a concession that most investors, at any stage, can be expected to look for the same 4-5 underlying economic fundamentals. However, there was a concession that earlier stage investors will look more for the vision and opportunity, whereas growth-stage investors and partners will focus much more on economics.
At the same time, there was generally agreement on the importance of conveying some kind of aspirational, personal, or impact message in the right context with any audience. Bill explained that as an investor in his private equity days, he would have disagreed with the need to have an aspirational or impactful message. However, he has since changed his mind because of his experience working at Off Grid Electric. After witnessing firsthand the human impact that Off Grid Electric’s business has had in an African village, and how strong the story of his experience subsequently resonated with prospective investors and strategic partners, he was convinced of the power of these kinds of messages.
For the truly early-stage companies in the room, the consensus recommendation ended up being, “rest on past success stories and track record, and if you don’t have them, push the aspirational/opportunity side of the story and demonstrate polish and practice.” While this comment seems geared toward those entrepreneurs who have had successful venture exits, the point was actually made as a recommendation to an attendee who represented the technology licensing and commercialization office of a research laboratory. Surely, such a lab has other successes to point to, and those can and should reinforce the strength of subsequent spin-outs.
There was some difference in opinion on the use of industry-specific or general buzz words, but there was firm agreement on staying away from jargon like “we’re changing the world by…,” or “rocket-ship growth,” as any audience – investors, prospective technical partners, or prospective customers – will cringe. Probably the most effective line in driving this point home came from Steve, who said, “…jargon is a crutch and not helpful.” Enough said.
Finally, the conversation turned to platform technologies or businesses with more than one current or plausible target market. First, there’s a distinction between the attraction to a company that has two or three markets it can address today – thereby increasing the size of its addressable market – and the avoidance of those with dozens of possible market applications that can be perceived as a very early stage science experiment. Picking first target markets, and only later introducing optionality into the story is a classically hard exercise for early stage companies, but is very necessary in communicating, “…we know what we want to be when we grow up, and we have a strategy.”