A top-down company plan facilitates decision-making and impresses investors.

A startup business plan starts with the product, the target customers, how to reach them, and how to grow the business.

Bottom-up is terrific unless venture investors fund it.

If it can prove how it can exceed $100M in sales, investors will invest. If not, the business may be wonderful, but it's not venture capital-investable.

As a rule, venture investors only fund firms that expect to reach $100M within 5 years.

Investors get nothing until an acquisition or IPO. To make up for 90% of failed investments and still generate 20% annual returns, portfolio successes must exit with a 25x return. A $20M-valued company must be acquired for $500M or more.

This requires $100M in sales (or being on a nearly vertical trajectory to get there). The company has 5 years to attain that milestone and create the requisite ROI.

This motivates venture investors (venture funds and angel investors) to hunt for $100M firms within 5 years. When you pitch investors, you outline how you'll achieve that aim.

I'm wary of pitches after seeing a million hockey sticks predicting $5M to $100M in year 5 that never materialized. Doubtful.

Startups fail because they don't have enough clients, not because they don't produce a great product. That jump from $5M to $100M never happens. The company reaches $5M or $10M, growing at 10% or 20% per year.  That's great, but not enough for a $500 million deal.

Once it becomes clear the company won’t reach orbit, investors write it off as a loss. When a corporation runs out of money, it's shut down or sold in a fire sale. The company can survive if expenses are trimmed to match revenues, but investors lose everything.

When I hear a pitch, I'm not looking for bright income projections but a viable plan to achieve them. Answer these questions in your pitch.

• Is the market size sufficient to generate $100 million in revenue?

• Will the initial beachhead market serve as a springboard to the larger market or as quicksand that hinders progress?

• What marketing plan will bring in $100 million in revenue? Is the market diffuse and will cost millions of dollars in advertising, or is it one, focused market that can be tackled with a team of salespeople?

• Will the business be able to bridge the gap from a small but fervent set of early adopters to a larger user base and avoid lock-in with their current solution?

• Will the team be able to manage a $100 million company with hundreds of people, or will hypergrowth force the organization to collapse into chaos?

• Once the company starts stealing market share from the industry giants, how will it deter copycats?

The requirement to reach $100M may be onerous, but it provides a context for difficult decisions: What should the product be? Where should we concentrate? who should we hire? Every strategic choice must consider how to reach $100M in 5 years.

Focusing on $100M streamlines investor pitches. Instead of explaining everything, focus on how you'll attain $100M.

As an investor, I know I'll lose my money if the startup doesn't reach this milestone, so the revenue prediction is the first thing I look at in a pitch deck.

Reaching the $100M goal needs to be the first thing the entrepreneur thinks about when putting together the business plan, the central story of the pitch, and the criteria for every important decision the company makes.

It’s Zuora’s, and it’s brilliant. Here’s why.

My friend Tim got a sales position at a Series-C software company that garnered $60 million from A-list investors. He's one of the best salespeople I know, yet he emailed me after starting to struggle.

Tim has a few modest clients. “Big companies ignore my pitch”. Tim said.

I love helping teams write the strategic story that drives sales, marketing, and fundraising. Tim and I had lunch at Amber India on Market Street to evaluate his deck.

After a feast, I asked Tim when prospects tune out.

He said, “several slides in”.

Intent on maximizing dining ROI, Tim went back to the buffet for seconds. When he returned, I pulled out my laptop and launched into a Powerpoint presentation.

“What’s this?” Tim asked.

“This,” I said, “is the greatest sales deck I have ever seen.”

Five Essentials of a Great Sales Narrative

I showed Tim a sales slide from IPO-bound Zuora, which sells a SaaS platform for subscription billing. Zuora supports recurring payments (e.g. enterprise software).

Ex-Zuora salesman gave me the deck, saying it helped him close his largest business. (I don't know anyone who works at Zuora.) After reading this, a few Zuora employees contacted me.)

Tim abandoned his naan in a pool of goat curry and took notes while we discussed the Zuora deck.

We remarked how well the deck led prospects through five elements:

(The ex-Zuora salesperson begged me not to release the Zuora deck publicly.) All of the images below originate from Zuora's website and SlideShare channel.)

#1. Name a Significant Change in the World

Don't start a sales presentation with mentioning your product, headquarters, investors, clients, or yourself.

Name the world shift that raises enormous stakes and urgency for your prospect.

Every Zuora sales deck begins with this slide:

Zuora coined the term subscription economy to describe a new market where purchasers prefer regular service payments over outright purchases. Zuora then shows a slide with the change's history.

Most pitch recommendation advises starting with the problem. When you claim a problem, you put prospects on the defensive. They may be unaware of or uncomfortable admitting the situation.

When you highlight a global trend, prospects open up about how it affects them, worries them, and where they see opportunity. You capture their interest. Robert McKee says:

…what attracts human attention is change. …if the temperature around you changes, if the phone rings — that gets your attention. The way in which a story begins is a starting event that creates a moment of change.

#2. Show There’ll Be Winners and Losers

Loss aversion affects all prospects. They avoid a loss by sticking with the status quo rather than risking a gain by changing.

To fight loss aversion, show how the change will create winners and losers. You must show both

1. that if the prospect can adjust to the modification you mentioned, the outcome will probably be quite favorable; and

2. That failing to do so is likely to have an unacceptable negative impact on the prospect's future

Zuora shows a mass extinction among Fortune 500 firms.

…and then showing how the “winners” have shifted from product ownership to subscription services. Those include upstarts…

…as well as rejuvenated incumbents:

To illustrate, Zuora asks:

Winners utilize Zuora's subscription service models.

#3. Tease the Promised Land

It's tempting to get into product or service details now. Resist that urge.

Prospects won't understand why product/service details are crucial if you introduce them too soon, therefore they'll tune out.

Instead, providing a teaser image of the happily-ever-after your product/service will assist the prospect reach.

Your Promised Land should be appealing and hard to achieve without support. Otherwise, why does your company exist?

Zuora shows this Promised Land slide after explaining that the subscription economy will have winners and losers.

Not your product or service, but a new future state.

(I asked my friend Tim to describe his Promised Land, and he answered, "You’ll have the most innovative platform for ____." Nope: the Promised Land isn't possessing your technology, but living with it.)

Your Promised Land helps prospects market your solution to coworkers after your sales meeting. Your coworkers will wonder what you do without you. Your prospects are more likely to provide a persuasive answer with a captivating Promised Land.

#4. Present Features as “Mystic Gifts” for Overcoming Difficulties on the Road to the Promised Land

Successful sales decks follow the same format as epic films and fairy tales. Obi Wan gives Luke a lightsaber to help him destroy the Empire. You're Gandalf, helping Frodo destroy the ring. Your prospect is Cinderella, and you're her fairy godmother.

Position your product or service's skills as mystical gifts to aid your main character (prospect) achieve the Promised Land.

Zuora's client record slide is shown above. Without context, even the most technical prospect would be bored.

Positioned in the context of shifting from an “old” to a “new world”, it's the foundation for a compelling conversation with prospects—technical and otherwise—about why traditional solutions can't reach the Promised Land.

#5. Show Proof That You Can Make the Story True.

In this sense, you're promising possibilities that if they follow you, they'll reach the Promised Land.

The journey to the Promised Land is by definition rocky, so prospects are right to be cautious. The final part of the pitch is proof that you can make the story come true.

The most convincing proof is a success story about how you assisted someone comparable to the prospect. Zuora's sales people use a deck of customer success stories, but this one gets the essence.

I particularly appreciate this one from an NCR exec (a Zuora customer), which relates more strongly to Zuora's Promised Land:

Not enough successful customers? Product demos are the next best evidence, but features should always be presented in the context of helping a prospect achieve the Promised Land.

The best sales narrative is one that is told by everyone.

Success rarely comes from a fantastic deck alone. To be effective, salespeople need an organization-wide story about change, Promised Land, and Magic Gifts.

Zuora exemplifies this. If you hear a Zuora executive, including CEO Tien Tzuo, talk, you'll likely hear about the subscription economy and its winners and losers. This is the theme of the company's marketing communications, campaigns, and vision statement.

According to the ex-Zuora salesperson, company-wide story alignment made him successful.

The Zuora marketing folks ran campaigns and branding around this shift to the subscription economy, and [CEO] Tien [Tzuo] talked it up all the time. All of that was like air cover for my in-person sales ground attack. By the time I arrived, prospects were already convinced they had to act. It was the closest thing I’ve ever experienced to sales nirvana.

The largest deal ever

Tim contacted me three weeks after our lunch to tell me that prospects at large organizations were responding well to his new deck, which we modeled on Zuora's framework. First, prospects revealed their obstacles more quickly. The new pitch engages CFOs and other top gatekeepers better, he said.

A week later, Tim emailed that he'd signed his company's biggest agreement.

Next week, we’re headed back to Amber India to celebrate.

Or the “lie to me” method.

I can predict a startup's success in minutes.

Just interview its founder.

Ask "why?"

I question "why" till I sense him.

I need to feel the person I have in front of me. I need to know if he or she can deliver. Startups aren't easy. Without abilities, a brilliant idea will fail.

Good entrepreneurs have these qualities: He's a leader, determined, and resilient.

For me, they can be split in two categories.

The first entrepreneur aspires to live meaningfully. The second wants to get rich. The second is communicative. He wants to wow the crowd. He's motivated by the thought of one day sailing a boat past palm trees and sunny beaches.

What drives the first entrepreneur is evident in his speech, face, and voice. He will not speak about his product. He's (nearly) uninterested. He's not selling anything. He's not a salesman. He wants to succeed. The product is his fuel.

He'll explain his decision. He'll share his motivations. His desire. And he'll use meaningful words.

Paul Ekman has shown that face expressions aren't cultural. His study influenced the American TV series "lie to me" about body language and speech.

Passionate entrepreneurs are obvious. It's palpable. Faking passion is tough. Someone who wants your favor and money will expose his actual motives through his expressions and language.

The good liar will be able to fool you for a while, but not for long if you pay attention to his body language and how he expresses himself.

And also, if you look at his business plan.

His business plan reveals his goals. Read between the lines.

Entrepreneur 1 will focus on his "why", whereas Entrepreneur 2 will focus on the "how".

Entrepreneur 1 will develop a vision-driven culture.

The second, on the other hand, will focus on his EBITDA.

Why is the culture so critical? Because it will allow entrepreneur 1 to develop a solid team that can tackle his problems and trials. His team's "why" will keep them together in tough times.

"Give me a terrific start-up team with a mediocre idea over a weak one any day." Because a great team knows when to pivot and trusts each other. Weak teams fail.” — Bernhard Schroeder

Closings thoughts

Every VC must ask Why. Entrepreneur's motivations. This "why" will create the team's culture. This culture will help the team adjust to any setback.

McMurtry Spéirling outperforms Tesla in speed and efficiency.

EVs were ridiculously slow for decades. However, the 2008 Tesla Roadster revealed that EVs might go extraordinarily fast. The Tesla Model S Plaid and Rimac Nevera are the fastest-accelerating road vehicles, despite combustion-engined road cars dominating the course. A little-known firm beat Tesla and Rimac in the 0-60 race, beat F1 vehicles on a circuit, and boasts a 350-mile driving range. The McMurtry Spéirling is completely insane.

Mat Watson of CarWow, a YouTube megastar, was recently handed a Spéirling and access to Silverstone Circuit (view video above). Mat ran a quarter-mile on Silverstone straight with former F1 driver Max Chilton. The little pocket-rocket automobile touched 100 mph in 2.7 seconds, completed the quarter mile in 7.97 seconds, and hit 0-60 in 1.4 seconds. When looking at autos quickly, 0-60 times can seem near. The Tesla Model S Plaid does 0-60 in 1.99 seconds, which is comparable to the Spéirling. Despite the meager statistics, the Spéirling is nearly 30% faster than Plaid!

My vintage VW Golf 1.4s has an 8.8-second 0-60 time, whereas a BMW Z4 3.0i is 30% faster (with a 0-60 time of 6 seconds). I tried to beat a Z4 off the lights in my Golf, but the Beamer flew away. If they challenge the Spéirling in a Model S Plaid, they'll feel as I did. Fast!

Insane quarter-mile drag time. Its road car record is 7.97 seconds. A Dodge Demon, meant to run extremely fast quarter miles, finishes so in 9.65 seconds, approximately 20% slower. The Rimac Nevera's 8.582-second quarter-mile record was miles behind drag racing. This run hampered the Spéirling. Because it was employing gearing that limited its top speed to 150 mph, it reached there in a little over 5 seconds without accelerating for most of the quarter mile! McMurtry can easily change the gearing, making the Spéirling run quicker.

McMurtry did this how? First, the Spéirling is a tiny single-seater EV with a 60 kWh battery pack, making it one of the lightest EVs ever. The 1,000-hp Spéirling has more than one horsepower per kg. The Nevera has 0.84 horsepower per kg and the Plaid 0.44.

However, you cannot simply construct a car light and power it. Instead of accelerating, it would spin. This makes the Spéirling a fan car. Its huge fans create massive downforce. These fans provide the Spéirling 2 tonnes of downforce while stationary, so you could park it on the ceiling. Its fast 0-60 time comes from its downforce, which lets it deliver all that power without wheel spin.

It also possesses complete downforce at all speeds, allowing it to tackle turns faster than even race vehicles. Spéirlings overcame VW IDRs and F1 cars to set the Goodwood Hill Climb record (read more here). The Spéirling is a dragstrip winner and track dominator, unlike the Plaid and Nevera.

The Spéirling is astonishing for a single-seater. Fan-generated downforce is more efficient than wings and splitters. It also means the vehicle has very minimal drag without the fan. The Spéirling can go 350 miles per charge (WLTP) or 20-30 minutes at full speed on a track despite its 60 kWh battery pack. The G-forces would hurt your neck before the battery died if you drove around a track for longer. The Spéirling can charge at over 200 kW in about 30 minutes. Thus, driving to track days, having fun, and returning is possible. Unlike other high-performance EVs.

Tesla, Rimac, or Lucid will struggle to defeat the Spéirling. They would need to build a fan automobile because adding power to their current vehicle would make it uncontrollable. The EV and automobile industries now have a new, untouchable performance king.

A completely operating application requires many processes and technical challenges. Implementing coding standards can make apps right, work, and faster.

With years of experience working in software houses. Many client apps are scarcely maintained.

Why are these programs "barely maintainable"? If we're used to coding concepts, we can probably tell if an app is awful or good from its codebase.

This is how I coded much of my app.

Make It Work

Before adopting any concept, make sure the apps are completely functional. Why have a fully maintained codebase if the app can't be used?

The user doesn't care if the app is created on a super server or uses the greatest coding practices. The user just cares if the program helps them.

After the application is working, we may implement coding principles.

You Aren’t Gonna Need It

As a junior software engineer, I kept unneeded code, components, comments, etc., thinking I'd need them later.

In reality, I never use that code for weeks or months.

First, we must remove useless code from our primary codebase. If you insist on keeping it because "you'll need it later," employ version control.

If we remove code from our codebase, we can quickly roll back or copy-paste the previous code without preserving it permanently.

The larger the codebase, the more maintenance required.

Keep It Simple Stupid

Indeed. Keep things simple.

Why complicate something if we can make it simpler?

Our code improvements should lessen the server load and be manageable by others.

If our code didn't pass those benchmarks, it's too convoluted and needs restructuring. Using an open-source code critic or code smell library, we can quickly rewrite the code.

Simpler codebases and processes utilize fewer server resources.

Don't Repeat Yourself

Have you ever needed an action or process before every action, such as ensuring the user is logged in before accessing user pages?

As you can see from the above code, I try to call is user login? in every controller action, and it should be optimized, because if we need to rename the method or change the logic, etc. We can improve this method's efficiency.

We can write a constructor/middleware/before action that calls is_user_login?

The code is more maintainable and readable after refactoring.

Each programming language or framework handles this issue differently, so be adaptable.

Clean Code

Clean code is a broad notion that you've probably heard of before.

When creating a function, method, module, or variable name, the first rule of clean code is to be precise and simple.

The name should express its value or logic as a whole, and follow code rules because every programming language is distinct.

If you want to learn more about this topic, I recommend reading https://www.amazon.com/Clean-Code-Handbook-Software-Craftsmanship/dp/0132350882.

Standing On The Shoulder of Giants

Use industry standards and mature technologies, not your own(s).

There are several resources that explain how to build boilerplate code with tools, how to code with best practices, etc.

I propose following current conventions, best practices, and standardization since we shouldn't innovate on top of them until it gives us a competitive edge.

Boy Scout Rule

What reduces programmers' productivity?

When we have to maintain or build a project with messy code, our productivity decreases.

Having to cope with sloppy code will slow us down (shame of us).

How to cope? Uncle Bob's book says, "Always leave the campground cleaner than you found it."

When developing new features or maintaining current ones, we must improve our codebase. We can fix minor issues too. Renaming variables, deleting whitespace, standardizing indentation, etc.

Make It Fast

After making our code more maintainable, efficient, and understandable, we can speed up our app.

Whether it's database indexing, architecture, caching, etc.

A smart craftsman understands that refactoring takes time and it's preferable to balance all the principles simultaneously. Don't YAGNI phase 1.

Using these ideas in each iteration/milestone, while giving the bottom items less time/care.

You can check one of my articles for further information. https://medium.com/life-at-mekari/why-does-my-website-run-very-slowly-and-how-do-i-optimize-it-for-free-b21f8a2f0162

https://medium.com/life-at-mekari/what-you-need-to-make-your-app-a-high-availability-system-tackling-the-technical-challenges-8896abec363f