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To get investors’ attention, your pitch deck must be authentic

Do not just follow Airbnb or Uber’s templates




If your pitch deck is repeatedly failing to convince investors of how unique and investment-worthy your business is, it is maybe you’ve been following one of the generic pitch templates that fly around the internet.


There are tons of blog posts, step-by-step guides and pitch teardowns out there teaching entrepreneurs how to create their fundraising pitch deck. If you’ve ever looked into raising start-up capital, you have probably come across some of those resources.


They teach you “everything” you need to know about fundraising: from VCs mindset to pitch deck content through PowerPoint best practices. They give you ready-to-use templates to replicate.


They even tell you how to order your slides as if there was one way that fits all startup stories!


Above all, they reveal the “ultimate secrets” behind Uber, Airbnb, and other unicorns successful fundraising.


All you would have to do is to look at some of these legendary cases, replicate their style and investors will start knocking at your door…


Isn’t it simple?


The result is we see more and more pitch decks that look similar and fail to emphasise the specifics of the business they are meant to sell.


Surely, there is nothing wrong with seeking advice on how create a pitch deck that will convince investors. The problem is most resources out there have a fundamental flaw.


They fail to acknowledge and take into consideration the critical factor that determines to a large extent how new ventures develop: The Type of Market in which they compete.


They implicitly assume that every founder is building a new tech product aimed to enable experiences which were not imaginable before. Just like Airbnb and Uber, etc.


Needless to say, the reality is quite different. Not all startups are shaping up new markets. Far from it. There are more businesses competing in established markets than those with the potential to create new ones.


Steve Blank and Bob Dorf defined in their book The Startup Owner’s Manual, four broad types of startups determined by their relationship with the market into which they are trying to enter:


1. Startups creating something that didn’t exist before (new market).

2. Startups offering a new product into an existing market.

3. Startups re-segmenting an existing market with a low-cost or a niche strategy

4. Startups “cloning” a known business model in another geography.


The Market Type is a key driving factor behind the way startups test their products, go to market, acquire customers, and grow market share. It significantly affects speed of execution and cash spend rate.


Each Market Type poses its own set of challenges and requires appropriate strategies.

When professional investors look at pitch decks, they instantly understand the Market Type the startup is trying to enter and immediately get the challenges that come with it. This will trigger specific concerns and they will look for thoughtful answers.


Failing to properly address these challenges upfront and anticipate investors objections will result in your chances at securing capital vanishing.


Therefore, it is crucial for founders to thoroughly reflect on challenges specific to their Market Type, devise adequate responses and then embed them thoughtfully in their pitch storyline.


Let’s now look at what are the challenges and investors’ concerns for each Market Type.


You are creating something that didn’t exist before (a new market)

There are no customers yet. You will need to go the extra mile to demonstrate that the pain point you are solving is real and concerns a large group of people, ready to pay for your product.


In your pitch deck, ensure you nail the problem articulation, the target customer persona, and the market sizing.

Your product or service is unknown to anyone outside your team. Perhaps the technology behind it is complex and difficult to grasp for non-experts. You will have to prove the viability of your technology in a simple and intelligible language.


Tech founders: Refrain from using jargon!


It is as well crucial to articulate how the product will works in users’ hands and change their day-to-day lives. Explain how your target customers deal with the pain point today and why you believe they will shift to your product when they have access to it. Showing early adoption, convenience and a promising traction is the way to go here.


Developing a customer base is a lengthy and costly process in a market creation scenario. Cash burn rate is going to be one of the biggest investors’ concerns. Provide an accurate view of your customer acquisition strategy and associated costs. Most investors will be sensitive to whether you are running a cost-efficient business or not.


You are offering a new product in an existing market.

Here you are competing head-on with established players. Customers have their consumption routine well in place. You will need to put in hard work to prove that your product or service is better, cheaper, or faster than the incumbents’.


Go deep into what makes your product or service unique in the market you are targeting. It could simply be about product or service features or about your delivery model: Maybe you outperform your competitors in a particular location or channel.


It could be about the values you stand for: Maybe you are the first one to spot a change in customer behaviour influenced by social or environmental concerns and you have just the right product innovation or operating model to respond to that shift. If that is the case, make sure it is the first thing you put in your deck.


It is also important to nail down how you are planning to drive customers to adopt your product or service. Clarify how you will deal with potential barriers to exit (e.g., membership cancellation penalties).


Stealing customers from established players is a risky and costly adventure. It will be key to convince investors that the market share you intend to capture is worth the challenge and that you have the right approach to increase the chances of success.


One last point: what is your strategy to protect your business against incumbent’s retaliation?


You are re-segmenting an existing market with a low-cost or a niche strategy

On top of the challenges of playing in an existing market (discussed above), there is the idea of creating around your business a community of like-minded customers whose specific needs are not fully met by incumbents.


You will have to prove the existence of this community (the niche). Who are those customers and what do they value? Showcase that unique feature of yours that will attract them like a magnet.


Investors would like to know if this niche is big enough to deserve their attention. You will have to go into details when it comes to market sizing. Back your numbers with credible assumptions.


When pursuing a low cost re-segmentation strategy, it is crucial to discuss the pricing point which will attract and qualify customers left out by incumbents. It is equally important to spell out the operating model changes you are implementing to enable a profitable business even at a lower pricing point.


Could incumbents easily replicate your operating model and crush you?


You are “cloning” a known business model in another geography

You don’t actually clone an existing business in a new geography. You always adjust the business model to local realities.


With the fast growth of emerging economies across the globe, there are more and more opportunities for entrepreneurs to borrow what has worked well in mature markets to solve problems in emerging markets.


When raising funding for such ventures, there is a lot of education to do. You will need to spend a fair amount of time building in people’s mind a connection between the business model and the target country.


You will need to convince investors that your product or service fit culturally well with locals and that there are ready to pay for it at the pricing point you’re proposing.

One way to do it is to use adjacent markets data to substantiate your case.


Operational feasibility could also a big concern in this scenario. Lay out how you are planning to establish your delivery model locally and make sure you’ve covered the below questions:


How would you deal with potential infrastructure challenges?

Do your team members understand the local culture?

Can you hire locally to scale-up your business overtime?

Have you studied local regulations and standards applicable to your business?


Takeaway:


Before you start crafting your pitch deck, take time to reflect on what makes your startup journey unique. Face your challenges upfront and ensure you have addressed them all in a way that will reassure potential investors.

Then capture that essence in your storytelling. This is a good place to start.

We have summarised this approach in an actionable framework. Download it here