#SOTD 69: Don’t hide bad news (Sequoia deck)
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#SOTD 69: Don’t hide bad news (Sequoia deck)
Today we look at how the Sequoia deck does not mince words in conveying bad news.
For those who came in late: This week I’m breaking down some of the storytelling techniques used in Sequoia’s recent presentation to its portfolio companies titled ‘Adapting to Endure‘.
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To recap:
– In Monday’s email, we looked at how the presenter starts with a personal story – of having faced a similar economic downturn.
– Tuesday’s edition looked at how the deck had clear messages on top of slides and charts.
– On Wednesday we explored the use of the Pyramid Principle to structure your thoughts.
Today’s lesson: The use of a simple story flow (What-Why-What next) and the willingness to lay out the bad news upfront without mincing words.
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No wonder, if we have bad news to share at the workplace, we try various tactics to soften (or altogether avoid) the blow. We sugarcoat it or try to give a ‘positive spin’.
Sequoia does none of the above. In a series of messages it lays down the state of the economy and then follows it up with the implications:
- We’re experiencing the 3rd largest Nasdaq drawdown in 20 yrs
- 61% of all software, internet and fintech companies are trading below pre-pandemic 2020 prices
- 1/3 are trading below COVID lows, when uncertainty and fear was peaking
- Growth at all costs is no longer being rewarded
- Focus is shifting to companies with profitability
- Cheap capital is not coming to the rescue
- Medium to long-term: durable growth with improving profitability is always the path
- Recovery will be long
Here’s my interpretation of the overall message they are giving with these key statements:
1. Things are bad:
- We’re experiencing the 3rd largest Nasdaq drawdown in 20 yrs
- 61% of all software, internet and fintech companies are trading below pre-pandemic 2020 prices
- 1/3 are trading below COVID lows, when uncertainty and fear was peaking
2. The party is over:
- Growth at all costs is no longer being rewarded
- Focus is shifting to companies with profitability
3. There will be pain and recovery will be long:
- Cheap capital is not coming to the rescue
- Medium to long-term: durable growth with improving profitability is always the path
- Recovery will be long
Alright what next after these messages? Once having laid out the bad news, the responsibility of the storyteller is to answer two key questions:
- Why did this happen?
- What can we do?
Sequoia answers both these questions (especially the ‘what next’ part) clearly in the deck.
Incidentally, I had mentioned this framework for conveying bad news in an earlier post, using the case study of J&J’s Tylenol, where I argued that in some cases bad news can be good for your brand/ethos.
Don’t hide bad news – be upfront about it, and follow it up with the Why and the What next.
#SOTD 69
![](https://www.storyrules.com/wp-content/uploads/2022/11/unnamed-16-2-1024x576.jpg)