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Now that Obama has won the election. The question that needs to be answered is: Will the election rally hold.

Historically, the answer is “For a while.”

Seeking Alpha compiled all the daily closings from 1929 to August 8th, 2006 and came up with the following results.

What do these results show us?

1.The market stabilizes around the election before dropping a few months after the inauguration.

2. Once the new executive has settled into office there is a period of rapid growth based on the hope of change, followed by a steep decline as the mid term election approaches.

3. These results are independent of party, candidate, or economic situation as they have been averaged over 77 years of the DJIA’s history.

However people seem  to think things will be different this time around.

CNBC indicates that Obama’s victory comes a point where change is needed. “It’s a sense of absolute relief that some definition today will arrive,” says Diane de Vries Ashley, managing partner of Zenith Capital Partners in Coral Gables, Fla. “People are expressing ‘enough is enough’ and things are not as bleak as they appear to have been and now we can get down to business.”

But unlike previous periods where there is hope for change, a rally and then politics as usual, this time things seem different. Obama’s team is clearly focused and has proven its ability to deliver. This started with a bid for the Whitehouse. They put together a staff, not of politcos, but the best experts in the field of corporate strategy, corporate finance, social media, viral marketing, public relations and grass roots fundrasing to win the election. Then instead of touting rhetoric or attacking his opponent at his victory speech, Obama humbly asked America for its help in making it through the next several years. Today the Obama Presidential Transition Committe hits the ground running, without so much as 12 hours of celbration, to make good on dream of change that led Obama to victory.

It’s like they realize that winning  only gets them the starting line. There is still a 26.5 mile marathon left to run.

This is in response to Richie’s last post regarding an economic turn around. While I agree that the market has stabilized somewhat, I think that stability is based on the hope of a turnaround should Obama win this years election. Be warned, should obama lose, the postivie sentiment or at least guarded optimism wil evaporate and I can very easily see the dow reaching 5000 within two weeks of the election.

Right now with an increase in unemployment, decreased consumer spending, decreased ad buying, falling housing prices, and poor consumer sentiment, there is very little to provide confidence Wall Street other than the hope of change. Given post debate analysis, Barack Obama has sold to both Mainstreet and Wallstreet that lhe is the instrument of that change. Moreso, CNBC reports that folks who move in financial circles have already be sold on the idea that Obama will win, and operating accordingly.

If the american voter doesn’t deliver those expectations, the bubble which is build on nothing more than hope will pop. We will, once again,  see the economy for what it really is, and stocks will tumble on yet another piece of bad news.

So let’s all hope for an Obama victory and at least give America something to dream about. In bad times, dreams are what keep us from losing all hope.

So get out and vote! And if you care about the well being of this country…

Today the National Venture Capital Association released numbers for the PEPI  (private equity performance index).

What these numbers show is that despite the lack of IPO liquidity venture capital firms have squished wall street performance over every measurable time period. This year, as wall street and the S&P have tanked creating an IRR of -11.1% and -13.1% respectively, VC firms have created positive value for their limited partners. The average rate of return accross the entire industry has been 5.1%.

What does this mean? As risky as VC investments may appear to be, these funds are a) not leveraged, b) investing in hard IP based assets, and are relatively recession proof. Think about this when deciding what to do with your cash.

The full report can be found here

“The Private Equity Performance Index is based on the latest quarterly statistics from Thomson Reuters’ PrivateEquity Performance Database analyzing the cashflows and returns for over 1941 US venture capital and privateequity partnerships with a capitalization of $828 billion. Sources are financial documents and schedules from Limited Partner investors and General Partners. All returns are calculated by Thomson Reuters from the underlying financial cashflows. Returns are net to investor after management fees and carried interest.”

I get asked every so often to help out companies that aren’t seeing much traction.  After some successes and failures, I’ve come up with a flowchart that seems to help. (If you’ve ever met me in person you know I just LOVE my flowcharts!!!- Dork Central right here!)
In my mind there are four reasons why  software may not gain adpotion.

1. The product is not filling a market need. Ie. NO ONE CARES!
2. The value proposition is not clear. Ie. NO ONE UNDERSTANDS.
3. The experience is aweful. USERS RUN AWAY SCREAMING
4. The experience is hidden. NO ONE KNOWS WHAT YOU DO!

Mind you this is probably an oversimplification, but humor me, nonetheless

I will address each of these issues in a separate post, So lets start from the beginning…

Does anyone really care?

When trying to answer this question, be able to pinpoint who your customer, why they would use your product or service and articulate this clearly as your statement of business. Remember, don’t try to be everything to everybody.

Things to think about when trying to figure out if there is a legitimate need.

1. How big is your addressable market - the number of people who make up the potential pool of clients/users?
2. How much of this market can you realistically expect to capture?
3. Are you really solving a significant itch for people in this market by making things easier/faster/cheaper?
4. Do you offer something unique or are you what I like to call a “Me seven”, a clone of something else with an insignificant improvement? The world can only support so many social networks, adnetworks, or video sites. So chances are unless your product is a real game changer in a crowded space, it will fall on its head.
5. How many other companies are doing something similar in your space? What is the financial health of those competitors?
6. How do customers/users  of those other providers feel about their vendor/ service?
7. Is there an industry leader?
8. What is that leaders market share?
9. How are you different? Why are you better?
10. What prevents any of your competitors from stealing your market share? These are your barriers to entry.
11. Would you pay to use your own service ?
12. Would you ask your friends to ask their bosses to use your service?

If you can’t pinpoint who you are “selling” to and concretely determine why they would adopt/buy from you in one sentence, then you need to rethink your focus.

Your entire product design, sales and marketing strategy and pitch should flow from a pinpointed statement of business.

So what does this look like when it is done right?

Let’s look at a company like angelsoft. Their focus is clear: They create software to help Angel investor groups manage all the document exchange and conversation involved in evaluating early stage companies– a process which was previously relegated to email or a shared webdrive or some poor intern stuck in a closet.   Angelsoft’s customer is your average angel group and their value proposition is simplifiying a complicated and messy process. - Easy and to the point.

What do you think? Do you know of any other companies who have done it right?

I am currently working with a company on a sales strategy. One thing I am trying to push is (especially in this economy) is figuring out ways to demonstrate need. One thing,really works well–showing your client hard data on how they can financially benefit by using your product. I’m not talking about speculation or wishy washy statements like “you will get more exposure!,” but real hard quantifiable data. For example showing “here is what it costs to do X now. With our product it will cost this much less, which will pad your bottom line with those dollars.” In an economy where more cash flow means more likelihood of survival, I can almost guarantee you will get attention with this approach.  And I’m not alone in my thinking. Check out Startup CFO for the same solid advice.

I usually don’t like to re-hash posts, but after reading what Michael Arrington just wrote for Tech Crunch, I felt like the advice was perfect for this forum. His original article on effective demos can be found here.

Below are observations taken from sitting through hundreds of phone and live demos at Techcruch50.

If you are presenting to a client, investor or partner keep the following in mind.

• Show your product within the first 60 seconds. If you have to lead in with fluff, your product is incomplete, too complicated or not very useful in the market.
• The best products take less than five minutes to demo
• Leave people wanting more. Be minimalistic in your presentations. Let your audience lead the conversation. People are far more likely to remember you if they are make “discoveries,” and not having them forced down their throat.
• Talk about what you’ve done, not what you’re going to do.
• Understand your competitive landscape–current and historical. Know who has attempted what you are doing in the past and who is in your space today. If speaking about companies in past tense, know why they succeeded or failed. If speaking about your current competitors, know how you are different.
• Short answers are best. From my own experience it is tiring hear some drone on and on when trying to answer a question.  Use words sparingly.
• PowerPoint bullet slides are death. There is enough about this elsewhere.
• USE A HANDSET ON A LANDLINE!!! I’ve been on calls where I’ve wanted to reach through the phone and strangle entrepreneurs because they decided to call me on skype.   Skype is great, except when there is a lag, or the line is choppy.  Also don’t use a speaker phone. The echo blows!!!
• Answer questions honestly. If you don’t know the answer say something like “Hmmm… that’s a good question. Let me think about that for a second,” or “I’m not really sure, I’m going to have to think about that for a bit and get back to you,” or “I’m not sure to be honest. What do you think?,” or even that you will cross that bridge when you come to it. Just be honest. You won’t know the answer to everything unless you are a bullshit artist.
• Always confirm the time of your meeting/call, and always be 15minutes early.
• Practice. Practice. Practice.

If you have anything else to add to the list feel free to comment below.

In our daily routine, we hear from numerous companies looking for ways to improve their pitch and overall web strategy.

I found this comment on the NextNY discussion group, and felt that it was insightful advice. In an interview Guy Kawasaki; the founder of Garage Ventures, was asked:

Q: So with all the advice you’ve given on pitching VCs, have you seen an improvement in the quality of pitches to Garage Technology Ventures?

A: Honestly, they’re not that much better. They are still too long, still using meaningless buzz words like “revolutionary,” and still don’t have credible business models. If only they would adhere to the
10/20/30 rule of Powerpoint: Ten slides, twenty minutes, 30 point font.

So the moral of the story is

Keep your powerpoint presentation simple.

• Make it readable form 20 ft away,  or better yet don’t include much text at all.
• Remove the words “revolutionary,” “World Changing” and “This is going to be huge” from your vocabulary FOREVER!
• Stop mentioning that if you can achieve just 1% market share of an industry, you will be able to create a 100 million dollar company.
• Be different / Be interesting / Provide Value

If you want to learn more about effective pitching please see Guy Kawasaki’s blog post on the 10/20/30 rule

Just before we go, we leave you with a short piece on how to turn a compelling speech into utter PowerPoint  boringness:

http://tinyurl.com/5dd59t