I’ve been writing up a series on my views of the best way to handle the first VC meeting. To recap, at this stage in your first VC meeting you have covered your bio, done the 50k foot overview of what your company does, defined the big problem you’re solving for a business or consumer and highlighted how your solution solves that big problem. Hopefully you’ve moved briskly through the first few slides since you should plan the whole pitch to be no more than 30 minutes with time for questions. If you want to start at the beginning of the series click here.
You’re now ready for the demo. My view on a demo here applies not only to pitching a VC but also to doing customer demos.
How to do a demo:
The key to a demo is to tell a story. You need to put yourself into the “role” of a person using the product who has a problem that he or she is trying to solve.
- As a sales rep I often struggle to find out the updated contact details of the people I’m trying to sell to at a company. When I log into LinkedIn, look at how difficult it is to find this information. With my company look at how the same interaction happens and how much easier it is for me to find the contacts I’m looking for
- As a person looking to buy a new car, look at how difficult it is for me to get real pricing data when I look at Edmunds or Kelly Blue Book. Now watch the same price discovery as we search through TrueCar
- As a project manager trying to budget out my project look at how difficult it is to estimate tasks using Microsoft Project, now watch the same tasks of estimating using LiquidPlanner. This results in a process where the whole team is involved in estimating and produces 22% more accurate plans confirmed by this study of 10 big users.
You need to describe how this users thinks and describe what they do in their daily interactions. If you’re in a VC pitch this should be easy because if you’ve followed my outline you’ve already covered the “problem” and highlighted your solution. So the demo should just be a continuation of the story in your PowerPoint deck. But even if you’re doing a customer demo you should almost always present the “day in the life” of your user.
There are presumably many “use cases” in your software – please don’t cover them all. Just give me a very walk through the most compelling problems you solve. And remember to talk through the business while you’re doing the demo rather than pointing out every cool technical feature you built in. The demo is the time to reinforce the benefits of your solution.
The classic mistakes made in most demos:
I know that most people feel that they know how to demo their product, but I promise you that 70+% of all demos suck. Here are the most common mistakes:
- People walk through a feature list, wanting to show me everything the product does. I’m trying to figure out, “what is the value?” and “why would somebody want to use this?” and you’re showing me how easy it is to copy your embed codes or how your virtual world for kids is better than Club Penguins
- People try to show me a complete tour-de-force of what the product does. By covering too much you lose the punch of what the key benefits are
- People don’t tell a story or “day in the life” so I don’t easily see the benefits to the user. A good demo is used to reinforce the benefits of your product and not just to show how cool the technology is.
- The person demo’ing doesn’t use the opportunity to talk about industry trends or competitive products. The demo is the best time to position your company
- Often you can tell the presenter is just “winging it” rather than following a storyline. A demo should be practiced as much as you would practice giving a speech (or doing an elevator pitch). The stories should roll off your tongue since you’ve done it hundreds of times
- Many people get in a routine of doing demos from showing friends and colleagues and they never seek critical feedback on whether their demo works well. Make sure you get lots of feedback on your demo in the same way that you would get user feedback on your product. Ask people to be brutal and honest with you.
- Most demo’s are too long. The best demos leave me wanting to see more. You can always say, “I’m happy to come back and do a longer demo at another time.” Give me a taste and then quickly dip back to your PowerPoint deck.
- Finally, a big pet peeve of mine. CEO’s who say, “I’ll have one of my guys call you to arrange demos. I don’t really do good demos.” Ahem. Buh-bye. If you’re a CEO and don’t know your product intimately don’t expect to raise cash from any savvy VC (or at least not from me).
The following is a 6-minute video of a demo I did from the DEMO conference in the Fall of 2006. It’s sort of an artificial exercise because I’m presenting to a 500 person audience rather than a small room of VCs or customers, but the general idea is the same. I can’t promise you that you’ll think this is best practice, but at least it is an example that will hopefully give you some ideas. : Click Here
Now in our VC PowerPoint pitch we’re going to switch back to our deck to cover market sizing. Next post soon …