The process companies use for approving new projects or initiatives is tested & true – right? Create a business plan outlining the 5-year forecast for income, profits, and cash flow, and run that up the flagpole for approval.
Business plans are detailed, and thorough – and in the innovation world, they’re almost always wrong.
Founders – both startup founders and corporate intrapreneurs – have one job: build the minimum needed to test a hypothesis, measure the results, and learn. The faster, the better. At the earliest stages in the lifecycle of a new venture, the “founding team” should have more questions than answers.
As a result, creating detailed business plans is often a waste of their – and your – time. You end up no better prepared to make a decision about whether to invest in or kill the idea.
But how else, then, to communicate to the decision makers, who will determine the fate of a new venture?
As much as they might like to, be executives and investors can’t be there throughout the entire process to share in learnings. As your portfolio of new ventures grows, so will the difficulty of keeping tabs on each one.
Every company is different – and so the “investment” process for new ventures in your company will undoubtedly be unique. But whether you are a Fortune 500 or First Round Capital, you’re going to need a structure to guide that conversation.
We’re big believers that for early-stage ideas, the structure of that conversation should be guided not by a 5-year plan or a business case, but by a pitch deck. By containing the conversation to 10 slides or less, you’re forced to focus only on what matters.
At the earliest stage of an idea, we recommend focusing go/no-go decisions to invest initial capital (or employee time, or access to internal resources) on two questions:
1. Is there is a problem worth solving?
2. Is your team (both your intrapreneurs and the company as a whole) better positioned to solve this problem than anyone else in the market?
Remember: at this point, you are investing enough to discover answers to the biggest unknowns the team is facing – and nothing more. The initial resources might be just enough to build an MVP of the product or to acquire the first hundred users.
Venture funding works like gears. A typical startup goes through several rounds of funding, and at each round you want to take just enough money to reach the speed where you can shift into the next gear.
-Paul Graham, Y Combinator
Once the team has validated the problem, and maybe gained early traction with users, they can come back and pitch for more funding or resources.
You’ll continue to invest in some new ventures that make it this far – and you’ll choose not to continue with some. And because you’re taking a portfolio approach to new ventures, that’s OK.
After 42 pre-seed investments and 20 years of combined startup and innovation experience, the Highline BETA team has seen some great – and some not so great – pitch decks.
We also know that the deck is just the story of the work that’s already been done, and the truths that have been uncovered. Without the up-front work to find and validate a meaningful customer problem, you’ll be all pitch and no substance.
But when the time comes that a pitch deck is the best tool for the task at hand, you might as well put your best foot forward.
While there are a number of examples and templates (notably, the Sequoia template) available online, we’ve found that for corporate new ventures and startups hoping to co-create with enterprise partners, they don’t quite fit the bill. So we made our own.
Here’s the pitch deck outline that we recommend for new ventures launching within larger corporations, or for startups looking to co-create with enterprise partners.
You can have it for free – on one condition: No more business plans.
Edit the Pitch Deck in Google Slides HERE.