Everything I learned in two days of Investor pitch training for Academics like us

GetFunded Workshop in Christchurch

I spent two action-packed days in Christchurch learning about pitching to investors and VCs. We started the workshop pitching our own ideas for two minutes. Then these ideas, in the form of who we were, what we were pitching, and how we were going to do it were put up on the wall. Every participant in the room was invited to read the ideas and choose a team. The teams that would then go to form and build on their own ideas would go into a pool and pitch their ideas, after learning from our mentors and coaches.

The CreativeHQ tweet Embed of the opening speech

Several streams of ideas flowed in those two days from all directions. The first stream came from the Government, but then from different other perspectives and mentors who personally coached teams. There were ideas on how to write proposals, how to weave a story, what elements to include. New Zealand has Ministry of Business, Innovation, and Employment that “invest” in new ideas and innovative ideas along different funding streams and it was interesting to get their perspectives. (These points are in the bullet point or diagrams as I picked up from the notes. The bold fonts indicate as they were articulated and my notes and interpretations follow).

The points and diagrams that I narrate here are in no particular order, but kind of what remained sticky at the end of the workshop and I could remember and probably take away for a foreseeable time.

Take Away Points to ponder

• Clearly defined end users and need. — The emphasis here was on writing a clearly articulated need statements, and also defining who are the end users. I was thinking of pitching an idea of developing a genomics analysis and application package where people would be able to have their genes sequenced cheaply and then we would provide a service to the patients and the doctors who would be able to use that data and the resulting analyses to plan care, or identify prognoses. We would still need to make a case whether that was needed. Who would tell us? We know from literature review for instance that there is a gap between best evidence in health care that is drawn from public health related or population studies and the application of these findings to individuals. This is where the appeal of persoalised medicine or precision medicine or precision health care. But the path to that achievement is not ncessarily very well defined.
• Definitely include impact statements. — This was a common refrain in the VC/Investor pitch from early on. How would my research/proposal make an impact? For whom it would make an impact? What do we mean by impact (brings up measurement issues and we would need to have a plan of measuring the change we would bring about)
• Outline critical steps and do not overpromise. — This will need to go in the methods section where the critical steps of how we would build the product or the solution or the research would need to be put in place. The more detailed the better. Also, and it kind of was appealing, was that, we would not need to overpromise. We would need to keep things as realistic and as achievable as possible.
• Have a strong Vision Matauranga component. — This was another critical point that deserves mention. MBIE would very much like to see that the Maori vision, or vision Matauranga was very much at the forefront and be discussed right in the beginning or planning stage and be as strong as possible. Listening to this, I was wondering that quite often, in my own unsuccessful applications in the past, this ended up being rather an after thought than a well planned documentation. Here was a chance to correct this error. Which was kind of appealing, and made sense. It also helped to see a well articulated document on Vision Matauranga (see the resources section) helped.
• Tell a story of what we have achieved so far. — The story component here was important. The speakers pointed to the NIST Storytelling resource.
• What is the size of the market that we are going to target. — This information should come from the preliminary research and secondary data analysis. With health care related issues, it is possible to build that story using prevalence and incidence figures. For others, specific market centric data on the end users would be important.
• Present the customer side of the story. — This was a recurrent theme. The customer or the word “client” may sound a bit odd in the context of writing a science proposal, but the meanings are nuanced. Sometimes it might mean the funder who are then in turn answerable to the general members of the public, or the end user. For the idea that I had in mind (develop a solution where people could buy a kit and send blood samples, and we would develop the analytics and help them decide), the customers could be doctors, people from the insurance sector, hospital administrators, nurses, patients themselves. Any of them. All of them. In the proposal, we need to reflect the stories from as many sides as we can, but there is a catch (see later points).
• Call the customer to find out. — The point was to directly get or narrate data from the end user. It could be a doctor, a possible collaborator who would be using. Get the first hand data or information. Write, email, call, have a direct conversation to get the sense of the need or urgency. Several points here worth noting.

First, Who do I know? and more on end users …

• If you do not know anyone, search for people in online and industry forums. Quora for example is a good place to go. Surely there are other online and social media to tap into and ask people.
• Very importantly, not just anyone would do. You need early adopters and need to present their perspectives (so, paying attention to the diffusion of innovation and observing behaviours of the laggards and early adopters, particularly those who have the resources to carry forward with the decisions and also experience the sense of urgency to act on the need, identifying this cluster of users is very important)
• Try to identify what are they thinking. — Need to bring up this issue in the conversation with the end users. When write to them, or when calling the end user (a must step), bring up this topic about what they are thinking about the issue and needs, get them to articulate.
• Don’t use terms like “we think…” but tell actual stories from your primary research and calling the end users. — Correspondingly, we need to produce first hand evidence. Where needed and where essential, evidence from the literature will work, but real world stories (even perhaps made up stories to achieve an impact should work).
• Validate the opportunity. — The early adopters (with deep pocket?) with need and their stories essentially set the scene and validate that there is an opportunity to bring about the innovation and the new thing we are talking about. For instance, if I can validate citing that I have a conversation with a Geriatrician and he feels the need for such a product and has shown an interest for a buy in, that should be a good start.
• Your story must be a focused story. — Just not any story will do. The story must be situated

“Think forward, plan backwards”

Think about your Early Adopters and start with them

Figure: Everett Rodger’s Diffusion of Innovation Conceptual Plot

This where Everett Rodger’s (1962) theory of diffusion of innovations (see the link below in the resources section for a Wikipedia entry) and how you can use them to your benefiti in pitching comes into context. These are the people who have the money, and the interest to adopt when your offering first comes out, but these are also people who may have a need to try out first and may have tried the other solutions to their problems that may not have worked out. Check out this youtube video where Justin Wilcox explains the process:

This is Justin Wilcox explaining the role of early adopters. Check out the website CustomerDevLabs.com where they have worksheets.

Step II: Then construct a Persona and generate Empathy based approach

Here’s a persona construction worksheet (for finding the link to a Google docs spreadsheet, click on it)

• The proposal must address these thirteen blocks of Investable Dashboard. — Five of these are absolutely essential. Five of them must not be missed.

Five must not be missed elements from the investable dashboard (Source: CreativeHQ)

1. Well articulated massively transformative purpose, customer, problem, and solution. — My impression, at least takeaway from the workshop is that the massively transformative purpose (MTP in short) speaks to a very high level aspirational goal that sets the sight high. But these also need to be well articulated. I suppose this is a challenge as to how do you transmit this dream to your potential investors who will see value in what you are proposing? Perhaps it is an art after all. Reflecting on my own project where I am thinking of developing a set of genome-phenome based solution harnessing the power of high throughput data, how could I do this? What would I say or write that people would undestand in the first place, or even believe? It may seem like a moonshot. So, start with an overarching high level (like what David Allen says a 10, 000 feet view in his Getting things done), dream, and then zero down to the customer (??client in my case, general members of the public, health providers, insurers, others?), the core of the problem and the proposed solution. I was thinking here about the issues around finding an early adopter and weaving a story around the persona who would be your early adopter “customer” if you will.
2. State a clear and compelling need. — This is where the persona construction, the data, the story matter. We need to have people articulate the need, validate that a need exists. Stories. Need to find people who are dying to get my solution. We need to address an unfulfilled desire, Churchouse would say.
3. Obvious, meaningful, competitive advantage. — Think about substitutes. Make a point that compared to what you have to offer, there is really nothing that is comparable. What you are going to offer is leaps and bounds ahead of the competition. Don’t know. It may happen. It may not. Science happens progressively, slow increments. A paradigm shift happens but not that often.
4. Sufficient, willing, funded and identifiable customers. — Who are these people? (possibly the early adopters with deep pocket who are willing to try out what I have to offer). Are there enough of them? Where can I find them? Are they in good numbers?
5. Experienced, committed, capable, entrepreneurial team. — Can’t be a solo effort. Build a team.
6. Timing is Right. — This is where delving deep into the literature for us the science types is a big issue. We need to identify documentation in the literature and institutions that inform that this is the right time to pitch this idea. Also, at some point we need to build a case that the world is ready for what I got. I don’t know. This can be tricky the more technical things get. Sometimes, we are building a piece of the puzzle. The bigger puzzle may be solved much later in time, but at least one piece at a time is essential. Say the genomics idea that I got. I cannot provide the whole solution no matter how lofty that might be. But one piece, perhaps solving an algorithmic puzzle, perhaps piecing together the scores. Even that is intensive and so computationally intensive that it cannot happen like tomorrow. Takes time. This is something that will need a hard look but the issue of timing is irrefutable.
7. Innovative product, business, or concept. — I guess this is where my earlier argument about building the great product argument versus what happens when you have incremental changes become moot.

Ten Types

Innovation does not necessarily have to be only product or service focused. Doblin’s ten types of innovation is worthy of mention here (see the table below).

Doblin’s Ten Types of Innovation (click on the image to get to the full table)

While this typology is useful for thinking about products and services in general, applying this to the context of doing science or healthcare research will need a lot of reconfiguration. For example, how do we conceptualise “customers”? Our customers in the research setting are probably funding agencies? Or perhaps patients or the government, or even all individuals who act as stakeholders, or insurance companies, or patients. All these different people have different persona that need attention. Also, note that this assumes that almost all innovation are incremental and build on earlier or existing products or services.

8. Well protected sustainable attributes. — Where we discussed issues around IP protection and non-disclosure agreements that should be made clear and transparent in the documentation.

9. Robust ROI projections. — This is where we need to write or document or put in the pitch about the return to all the time, money, energy invested. How would the investor get his cash back? The idea is to have a plan where you can get back about 30 times the resources and funds invested.

10. Narrate a Robust and clear exit strategy. — How will the investor realise their investment? What happens in case of liquidation events?

11. Resources and Channels to Scale. — How do we scale up? What are some of the growth strategies?

12. Tell them that integrated volume operations are achievable. — I suppose this is more for situations where you are proposing to make something and scale up (think of Tesla’s recent offerings and the demand put on in the first few days).

13. Tell them about your resilience. — What is your contingency plan? What will you do if the circumstances change?

People, product, price, stakeholder, value proposition

“Bring it back to the value proposition”

I am not sure that as scientists or social research professionals who are about to pitch to the various grant funders and agencies, we need to tick all the boxes, but the one point that was really “sticky” through the two days of presentations was how they urged to bring the conversations back to value propositions. There are values for everyone in an innovative research project: there is value to advance the science, do a breakthrough, but most importantly there is value to the people who are the end users, and the stakeholders. At the end of the day, it should be a human centred approach to take it to the people. Keeping the eye on the “value proposition”, the idea then is to bring a focus on how that value translates to money, or time.

What to do in the first two minutes of your pitch

I suppose one does not get more than a couple of minutes to tell the real story. In one sense, it goes with the summary writing or abstract writing bit of the research proposals as well. As the mentors said, the purpose of the first two minutes would be to set the scene to make it obvious how what you are bringing on board will help people (your funders) to make their decisions. Often, it seemed in failed propositions, it just helps them to come to a quick decision whether the proposal is fundable or not. I suppose that also needs some clarity on my own part — to the point, whether to go ahead with the proposal in the first place or hold back. The mentors emphasised the following three points:

• Tell them why what you do is important. — “Important” is the key word here. Tell them how will it benefit the people for whom this pitch is meant, or for whom the product or service, or the software or whatever it is that we are pitching.
• How what you are doing is better from what others are doing? — Here is a need to bring about quite clearly what you are doing and how that is better, how that is different from what others are doing. Others are working in the same field, so what are you doing that others (at least at the time of going for the pitch) are not doing so well where you bring in value? That contrast needs to be sharp and focus on the “better” aspect.
• Who are you? — Seriously, who are you? What are your qualifications? Why are you uniquely qualified to do what you propose? This is the time to pitch the team, perhaps?

It was not obvious what would be the order of these points to be pitched, but definitely space it out in the first two minutes. Then of course, beyond the two minutes whatever remained, you needed to pitch and address some other points. Here’s what the mentors stressed:

• Think, Who are your audience? (Are they experts who will critically evaluate? Are they general members, non-academic types? Love figures and stats? Hate figures and stats?)
• Ask yourself, why would your audience care? (they don’t, but you will have to make them sit up and take interest)
• Show, can you channel the passion? (Assuming you are passionate about what you are going to pitch, and why not). Show your passion for the work you are doing in your voice, tonality, manners.
• Give, give your audience a sense that a “wave is about to crash”. — Ask yourself, why do you want to pitch about it now? What is so special about now, this time? Why is it relevant now?
• Give, show them some proof that there is a market
• Tell, tell them how will you make money
• Tell, tell them how would the investor take money out (in other words, tell them as much as you can, your exit strategy)
• Tell, tell them how much money you are expecting them to put in (how much is a good estimate? It was told that something in between 1/2 a million to 2 million would be OK for pitching in New Zealand; go lower than 1/2 million and you are too low to be investable, over two million, and you are too pricey)
• Let them know, inform them what you have already done
• Derisk as far as you can. — You have already derisked it for them when you told them what you have already done. Derisk it further. Here is a startup risk management (derisk) sheet:

Startup Risk Management Sheet

• When you pitch, use plain language and simple headings

Resources need to look up/References

NZ State of the Technology Report (http://www.epageflip.net/i/693432-economic-impact-study-report-ebook)

https://en.wikipedia.org/wiki/Diffusion_of_innovations

Art of Telling a Story (NIST source: http://www.atp.nist.gov/eao/gcr02-831/chapt3.htm)

Vision Matauranga http://www.mbie.govt.nz/info-services/science-innovation/pdf-library/vm-booklet.pdf