You may be presenting a business plan that is relatively trivial. Maybe you want to take on a burger joint  franchise. This is relatively easy to explain, and you may really only need to focus on the financials when you are looking for an investment or, most likely, a small business loan.

However, I'm going to guess that you want to present something that doesn't exist. You are going to change how people use products or services.

This means that the  investors will have a very hard time relating to something so different, and you need to make it much more tangible for them. There are two methods I use to clarify what I'm offering.

The best one is to show a demo. There is almost nothing as powerful as a demo. A demo achieves two things. First, it shows some level of feasibility. It shows that what you are proposing CAN be done. It may be somewhat crude, "quick and dirty," but it seems possible to do. Now you have eliminated the possible objection based on feasibility. The second effect is that the investors can now imagine the experience using your product or service. Even if it's "quick and dirty," doesn't look anything like the final product or service, but they can imagine how it will work. And, especially if you are presenting your business plan to a prospective early stage investor for a startup company, you are likely to present to someone who will accept the incomplete form of your demo.

In 1995 I had an idea for a startup. It was going to be a device that connects your phones in your home to the Internet and allow you to place international calls at the price of local calls. This was 6 years before Vonage was created (2001), and 8 years before  Skype was founded (2003). It was hard to explain the concept. Even to my wife. Internet Telephony was very crude, but what I did was build a crude-looking device that connected to the Internet on one side, and then dialed to my cell phone on the other side. I then established a connection from Israel to someone in Florida who happened to be connected at the time (that's how you would connect with people then, just like ham radio...). I handed the phone to my wife, and she spoke with that Florida man. That's when she understood what the product was going to do.

In 2005, when I worked for Texas Instruments, I tried to convince Intel to launch USB 3. One of their first objections was that they didn't believe we can run 5Gbps, 10 times faster than USB 2, over a 14-foot USB cable. A group of engineers in Texas Instruments pulled together a very crude looking demo with two desktop PCs, and we flew it to Portland, Oregon. That demonstration convinced them, and the rest is history.

In 2010, when I had the idea for penveu, I claimed that a camera on a pen can know exactly where it is on the screen using on-screen targets that are invisible to the human eye. This was never done before, and I expected skepticism. To convince the CEO and the board of directors, my team developed two demos. One that showed that we could embed targets in a screen image that would be visible to a camera, but not to the human eye. The other was a demo that showed that the camera could track a visible target on the screen and write exactly where it is pointing. I explained that all that was needed to be done is to combine the two demos into one product that will track invisible targets. I secured funding that day. Four years and many patents later, and the product was launched.

Today we live in a world of mobile apps. I am the founder of yet another startup, that will release a new app in 2017. It was hard for me to explain how this app will work and look. Even to my partner. To my help came an app called POPApp. It allows me to draw screenshots even on paper, take pictures of them, mark active areas that will switch to another image, and in minutes I could demonstrate the operation of the app and make it tangible. I actually spent days and used a computer to design real-looking screenshots and uploaded them to this modeling app. Now, when I demonstrated the app, people don't believe that this is really a mockup and not a real active app. Until we finish the development, that it...

You never know how hard it is to get the investment, or resources and budget you need. It might just be the demo that pushes you over the hurdle. I would encourage you to always create a demo. Doesn't matter how crude it is, but create it.

However, sometimes it isn't feasible to create a demo, or the demo will not be able to explain what you want to achieve well enough. In those case, I use an analogy.

I once sat through a presentation given to the North Texas Angel Network, considering whether to recommend this startup to other investors for investment. The entrepreneur was struggling to explain to us what the service was. He used big words such as platform, ubiquitous, over-arching, and more. Now, I'm not the stupidest person on this planet, but I didn't get it. At some point I asked: "wait, so what you are proposing is like eBay for corporate buyers in the energy market. Isn't it?" He immediately lit up and said "exactly!" Then you could hear the other investors in the room saying "now I get it!" You see, we all know what eBay is. We understand what buyers in the energy market are. We just didn't understand what, in God's name, he was talking about. But when it was positioned as something they knew into a new market, we got it. So if you cannot demonstrate what you are proposing, at least use a sentence like: "this is like (something you know) for the (market, customer, or user definition)." That will do the trick. It also supports the notion that the greatest market disruptions are cross-industry disruptions, where a technology from one industry crosses over into another industry. I can imagine someone in the 1970's saying something like "this is just like a walkie talkie with a telephone number."

Published on: Jul 27, 2016
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