I was talking with the founder of a very early stage company we recently invested in about the wide set of customer opportunities they have. His biggest question was about where he should spend his time. My answer borrowed from MDV partner and author of Crossing The Chasm, Geoffrey Moore, was core or context?
What‘s Core? In the early stages of a company, core is hiring, product, and customers. Context is all that other stuff you have to do to support those three things, such as benefits, office space, fund raising, and so on. The real challenge arises in determining where to focus your product efforts. Focus too narrowly and you risk building the wrong product, a product no one actually wants to buy or use. Fail to focus and you risk never putting anything in the market.
Your Customers. As the entrepreneur pointed out to me, perhaps the most important question you can ask in answering this question is whether your product (or a particular feature) is core or context for your customers/users. If it’s core for them, you may be wasting your time. If what you‘re building is one of the top activities your customer is doing to differentiate themselves from the competition, it’s unlikely they‘re going to outsource that activity to you. But if it’s a must-have for your customer but not something they see as separating them from the competition, there‘s a good chance you‘re onto something valuable.
Fail Fast. How do you avoid getting too far afield from your vision as you‘re out talking to a whole lot of customers? When you‘re very early, I would argue that building the right product is about failing at a lot of mini-products as fast as possible. As you work on each mini-product, you have to be 100% focused on that effort — design it, build it, ship it, market test it, and then repeat. It‘s about 100% focus but very quickly shifting from one effort to another. In fact, you may be working with the same core product, but going through the process of positioning it differently to different markets; iterating certain key features, or just testing out a whole new concept. In some cases — especially in hardware — a lot more underlying investment may be required before you can market test the actual product — but certainly you can test the product concept and feature concepts with potential customers.
Focus wins. Last fall, I was fortunate enough to participate in a session Geoff Moore did with the management team of a later stage portfolio company we invested in. In addition to helping the company focus their strategic direction, the discussion also emphasized the long-term value of core versus context. As companies grow, the core versus context choice becomes even more important. Companies can‘t afford to do as many product based mini-tests (on a per feature basis they can, but on an overall product basis, they have to both develop new versions and maintain the existing code base — even for the most nimble consumer Internet companies). So it becomes even more important to figure out what’s core and what‘s context.
Trust your gut. You know if your company is hitting its stride or not. Not your advisors, not your board, only you. If it is, go 100% core. If it‘s not, it may be time to go back to the drawing board and into fail fast mode. Context always looks appealing because as the old saying goes, the grass is always greener…
Obviously, startups have limited time and money to work with. Some of the best products come about as a result of getting distracted early on. Focus on what’s core for you but context for your customers, and you‘ll win too.
There is no perfect pitch. When I was raising money, every investor responded to something slightly different. Ultimately, nothing speaks louder than a winning team, product, and market. But a good pitch deck can really help you tell your story.
Each pitch is unique. They vary by category. Content matters more than format. With those caveats, below is the outline for a deck in the B2B space. It’s the composite of slides used in pitches that resulted in investment from us.
When it comes to presentation, it goes without saying that the best pitches:
- Tell your audience what you’re doing, why the market will be big, and why you will win.
- Provide an imperative and a sense of urgency — they answer the questions “Why now?” and “What’s changed?”
- Provide real insight — into the market, customer pain, or a unique approach.
- Hook the investor — with compelling customers or user numbers (unless it’s a seed stage deal — even then, potential numbers or customers are helpful).
- Are delivered with knowledge, passion, and conviction by the entrepreneur.
0. Front slide
YourCo — Vision Statement or The Leading XX for YY — Your name(s)
1. Company Snapshot
What you are Key Figures
Customer painpoint/Your value prop
Sales (if you have them)
Selected (potential) customer logo’s
Recent product milestone
(It’s great discipline to have a Company Snapshot outside your deck – a dashboard that you use internally to monitor your business and track progress.)
Entrepreneur / CEO
Highlight a few key accomplishments for each person listed. Focus on the core team — that’s who your potential investors are funding. If there’s a key adviser or two, speak to them.
3. Market Overview — Your Market $X Today, $Y Tomorrow
Insightful market statistics or top players and key stats
The big market you’re playing in, even if you’re in a small segment of it today
Why it will be big
Why investors should care
4. The “Disruption” or “Driving Force”
What’s your insight? Talk about your insight into disruptions taking place in your space.
What do customers care about this?
What’s different now than five or ten years ago?
What’s changed (human behavior, sales model enabled by Internet, utility computing, how people spend their time, etc.)? Often this is a statement like X combined with Y means…
What is this a must-have?
Do more than just show your product — use the screenshot to highlight one key element of your approach. For example, take a specific product feature and use it to emphasize a pillar of your whole approach — agile development, ease of use, automation, user-generated content, etc.
6. Proven Success
YourCo is Winning
Key metrics for customer painpoint and your value proposition (value delivered – however you measure it, cost savings, etc.)
7. Business Model
Keep it simple – Illustrate via two or three graphical boxes and arrows
Stats on sales cycle
Chart on number of users/customers/objects/transactions/etc. growth over time (depending on your stage)
Go to market – direct / channel / etc.
8. Your Customers
Customer logo’s and compelling numbers, if you have them
If possible, show by vertical or solution area (shows you are thoughtful about and a leader in given areas)
If you have a customer sat number that is compelling, include it
9. How Customers Use Your Product
3 or 4 case studies / use cases on a single slide — what was the use, revenue value, etc.
Use this to really drive home your value proposition, customer pain points/value
Key tenets of your product
Relate to earlier screenshot slide — what drives you? Value proposition? Key features? Fast iteration? Ability to scale? Customer sat?
11. Product Futures
Cross of go to market combined with product roadmap
Where things will be when you’re bigger — good place to talk about platform/API’s, vertical solutions, partner strategy, mobile, or just your next version
12. Competitive Landscape
Suggest a 2 by 2 matrix with your company in upper right
Pick axis’s that highlight your strengths and your competitors’ weaknesses
Put a few companies that are really relevant and speak to them knowledgeably.
13. Your Competitive Advantages
Re-emphasize your advantages over the competition
Why you will win
Don’t leave the competitive slide out there without speaking to why you will win
14. Financials – A $XXM+ Business in 5 years
Last year – This year – Next year (depending on stage)
Use a graphic to show the ramp for next 5 years (include previous years if possible)
15. Use of Proceeds
Size of the raise
What three key things will you accomplish with this round of funding?
How do you capture the opportunity and remove risks that will lead you to a successful next fund raising round? Hiring? Product? Key customers?
16. Backup Slide – Bottom Up Analysis
Bottom-up analysis of the market in support of slide 3, if asked.
Manage Your Time
A big part of delivering a great pitch is managing your time. Investors ask questions — your goal should be to answer these questions but deliver your key points. A good slide deck can help you with the message but also act as a framework to keep things on track for both you — and your audience.
A compelling product that delivers real customer or user value, and an entrepreneur with a vision for that product, is at the heart of every great company. Without a product customers want to buy, or a site users want to use, there is little to talk about. But with that in hand, a great pitch can mean the difference between interest and commitment from potential employees, customers, and investors. As the old saying goes, always put your best foot forward…
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