Crafting Pitch Decks: The Art of Pitching Like A Pro (Replay)

This is a remastered replay of one of our most popular episodes. Enjoy. How do you insert a wedge into the world and then expand that wedge out over time? How do you insert a wedge into the world? That's strangely poetic and beautiful. So I like that. It's not as good as you're walking a bullshit tightrope, which I thought was brilliant. I think I might put that at the very beginning of the show. Absolutely. It's going to be in all the primers. Bullshit tightrope and putting a wedge in the world. You're listening to the Startup Podcast. This is an educational episode in deaf masterclasses about the concepts essential to building, running, and investing in Silicon Valley style startups. Whether you're a founder, investor, or operator in a startup, you'll gain insights into the principles that power high growth disruption, the same way Facebook, Google, and Uber do it. The conversation starts now. Hey, I'm Chris. I've been building brands, marketplaces, startups, and go-to-market strategies for over 20 years, including 10 years in venture-backed businesses in Silicon Valley. And I'm now helping a small handful of startups fast forward to the best high growth outcomes as quickly as possible. And I'm Yannup. I'm a software engineer, operator, coach, advisor, investor, and people geek. I've worked at Google and a number of scale-ups, and I'm now co-founder at Circular, a high growth startup. Our job on this show is to guide you through the unique mindset and approach that drive Silicon Valley style disruption at scale. And in this episode, we're going to continue our discussion about fund raising, and in particular, we're going to deep dive on the pitch deck. Specifically, I'm going to talk about what is a pitch deck even used for? What's the standard narrative that pitch decks tend to follow? What goes on each slide? And of course, what are some of the common mistakes that people make when putting together a pitch deck? Whether you're starting a scaling your company security program, demonstrating top-notch security practices and establishing trust is more important than ever. Vanta Automate's compliance for SOC2, ISO 2701, and more, saving your time and money while helping you build customer trust. Plus, you can streamline security reviews by automating questionnaires and demonstrating your security posture with a customer-facing trust center all powered by Vanta AI. And it gets even better. Just for TSP listeners, you can get $1,000 off Vanta when you go to vanta.com/tsp. That's vant.com/tsp for the start-up podcast to get $1,000 off. So, Chris, let's start with a very basic, what's a pitch deck even useful for? The first most commonly understood use case for a pitch deck is to go and pitch investors, of course. The presentation that you walk into a VC meeting with and walk the VC through it. The mental model you have to have in your head is that the investor you're pitching, even though they might be smart money as we defined in the previous episodes where they're sophisticated, they understand how startups work, maybe they have some insights into the domain that you're pitching because maybe they're an investor that operates in that domain, maybe they're in FinTech or Biotech or what have you. But you have to assume that this investor is basically ignorant of what you're doing. And I don't mean to say the investor is actually ignorant, but you have to treat them as if they're ignorant. You have to be on the hook, you have to be accountable for educating them about why this problem, why this solution, why this space, and why your business is going to win. And I find often founders, and I'll include myself in my early career, will walk out of an investment meeting and say, well, they're stupid, they just don't get it. Maybe they weren't paying attention, maybe they were distracted, but you have to recognize that all investors are fundamentally ignorant compared to you when you walk in that room because they're either distracted, they're dealing with a lot of different businesses, angel investors are often, this is not their full-time job, they don't have the insight you had, otherwise maybe they would have gone and built your business. They haven't built the institutional knowledge you've built, they don't know what quirks and features you've developed about your business model, your product, what you've learned, what hypothesis testing you've done. So by definition, you are walking into that room as the expert, and so you have to take full accountability for disabusing that investor of their ignorance. And that's the job of the deck, without being patronizing or rude or what have you, of course, but that's the journey that this deck that we're going to walk you through ultimately has to do. I think what's happening here is, if you talk to an investor, and in fact, we have a really great co-host lined up for a future episode, who is a venture capitalist, they would probably say, well, founders are ignorant, they don't understand the macro trends, they don't understand the hidden economics, they don't understand a bunch of important things. So I'm leaving angel investors to one side because that's just a total crap shoot. But if you look at the professional investors and think about what their job is, their job is to understand the big picture and to get very good at pattern matching, right? They see what's been working, what hasn't been working, they understand a lot of the common business models and so on. And they see dozens of pitch decks a week. And so they've kind of trained this pattern matching engine in their brain, which is like, okay, which one of these businesses is it? Now, once in a while, what you're doing is truly revolutionary and there's nothing like it, and you're just going to have to do that hard job of educating people from the ground up. Assume that's not you, that's really rare. What you're actually doing when we're talking about educating investors is what you want to do is make their job of pattern matching as easy as possible. So even though there is no formal template, what you're actually trying to do is fit your business into a template that they are familiar with so that they can easily say, oh, okay, it's one of those, I know what questions to ask, I know what risks there are, I can validate it and then I can feel confident giving these people my money. Your pitch deck should make their lives easy. Remember, you're asking them for money, so don't make them work for it. I absolutely love this characterization because when I talk about them being ignorant or you having to assume there's a level of ignorance there, I'm talking a little bit about my general philosophy of taking 100% accountability for other people's understanding or behavior or your general success. And so you need to walk in there and take accountability for walking them through your story, but you're correct 100% Yonev, which is in many ways they're smarter than you because they get to see many pictures across many companies and have this unfair bird's eye view of the industry, of the patterns, of the things that work. And so in that sense, you also want to be careful about coming across like you are a revelatory business when you're not. In the last couple of podcasts we talked about signaling. And perhaps one of the strongest signals is to know the right parts of your business that are new and the right parts of the business that are actually pretty well worn and know some of the jargon, the patterns, the speaking style to almost gloss over the parts that are commonly understood and dig into the parts that are unique to your business. I've bumped into a number of founders who will start things off with saying, this is a revelation and no one's ever done this before, it's completely unique. And what they're really pitching you is a pretty standard two-sided marketplace, right? And so part of your signaling and part of your sophistication is almost knowing what to educate on and what the industry standard jargon is and what to dig in on and explain how your thing maps to or might vary from the standard. And I think that's a really hard, really hard communication problem to solve. Yeah, it's funny. We talk about VCs as being very comfortable taking risks because most investments fail, right? But it's important to understand the way in which they take risks, which is they're kind of like those species of turtle where each one lays a thousand eggs and they have a thousand baby turtles because they know nearly all of them are going to die. They're not giving birth to a thousand completely different creatures and seeing which one will succeed, right? They're just playing a numbers game because they know that the failure rate is very high. They don't like taking risks on totally new business models or like the unique revelatory thing. They actually want to feel comfortable that they kind of understand the type of business you are and you're just another one of those investments that adds up to that total risk portfolio, some of which will grow up to be a beautiful green sea turtle and you know, you get your your tenix return on your fund. I've got to do a wild analogy at least once in an episode. I love it. I love it. Okay, all right, having dived into all of that, I actually find a pitch deck is very, very useful way before that. Oftentimes, and I'm first engaging with a startup, I actually will ask them if they have a pitch deck and review the deck with them and typically I'll find it lacking in some way or out of date in some way and I'll encourage or almost insist that we go and build a pitch deck even if the next thing we're going to do in that business is not going to be to raise money. And the reason for that is it can drive clarity of thinking for the founder and alignment across all the key stakeholders in the business so that it's not implicit in your head and it's not a bunch of possibilities and potential. It's a specific plan, a specific pathway through the field of options that are in front of you that you were trying to execute on over the next stage of the business. And so a pitch deck is useful before you even begin talking to any investors. It's funny, Chris. As you were saying that, I was actually thinking about one of Amazon's famous practices, the PRFAQ, which stands for press release and frequently asked questions. At Amazon, whenever you begin a new project, pretty much the first artifact you create is effectively this press release of what it's going to look like and it's not not that something that you're actually going to release to the public, but you create this press release describing the product when it's finished, the benefits it offers, and so on. And then an FAQ that actually answers some of the questions you imagine people might have about this product release. And the whole purpose of that exercise is to put yourself in the shoes of someone else who's trying to understand why that product that you're building is valuable and it forces that clarity of thought and that clarity of expression that is actually going to benefit you a lot as you work on the project. So I think what you're saying in a very real sense is that your pitch deck is very closely related to that. It's kind of your business PR FAQ and there's a huge amount of discipline that goes into taking what you're doing and actually breaking it down and expressing it clearly in such a way that someone who doesn't know what you do very well doesn't share your passion initially gets to the point where they're willing to write a large check to you. I love that Amazon practice. Sometimes founders can get lost in the weeds about what they're building and why they're building and how they're going to market and that early pitch deck to add clarity to their own thinking and to quickly onboard their early team and vendors I find to be just really compelling, really effective. Yeah. So let's say, all right, we're thoroughly convinced that a pitch deck is a good tool even before you're pitching to an investor. You're using it for your internal planning and alignment processes. But what the heck is on this deck, right? So maybe you want to rattle through the standard narrative of a pitch deck. Just before you do, though, I think it's important to note it is the standard narrative. It's kind of the cookie cutter narrative, but you can add or remove a slide or a concept here and there. You can reorder them depending on the kind of business you're running or perhaps the thing you really need to prove. But if you're not certain what order to tell the story, this is probably the right order. Yeah. It's like jazz, right? You've got to understand the basics and master the standards. Once you do that, you can start getting creative. So the standard narrative for a pitch deck goes like this. First, you talk about the problem. Then you talk about the solution that you are pursuing to solve that problem. Then you talk about the team, the market size, the competitors, your go to market strategy, the traction that you have so far and pay to picture of where this can go. What's the big future ambition? Then finally, finish with what you're actually asking for the ask that we covered in the last episode. What we thought we would do is actually go through this slide by slide and talk about what the best practice is, why it's in there, and also what are some common mistakes because it can be very easy to make mistakes on any of these. The way I like to think about this list is through the lens of how a third party might be reading it and understanding it and the kind of skepticism you might be knocking over as you go through each slide. Okay, Mr. and Mrs. Foundry are sitting in front of me. What problem do you see in the world? What is this insight that you've had that no one else has had? So you're like, okay, you tell me the problem. Then I'm left thinking, oh, that's interesting. I never knew that. I never thought about that. I never considered that pain or that potential. Or maybe I'm nodding along going, yeah, yeah, exactly. I have this problem. This why has nobody addressed this? That's the first slide. The second slide is like, given that we've characterized this problem, here's how we think we can go about solving this within your product or business model or what have you. And then the investor is saying, oh, yeah, I buy that that's an approach that you can take or hypothesis you could have about solving that problem. Who are you people? Anyway, why do you think you can do this? And that's why you switch to team. You go, okay, here's who we are and why we think we're uniquely qualified to do this. And team is probably one of those slides that you can most often move around a little bit. So, in a very beginning, if you are really, really early stage and you're trying to establish some credibility up front, or you can move it towards the back if you are a bit later stage and you want to lean more on your traction and so on. So then once you've convinced me, you've got a real problem, you've got a real hypothesis to solve that problem. You have a serious team. My next question is, okay, okay, I buy that. How big is this? How big is this problem? How much money is there behind this? And that's why you switch to market size. And you go, okay, here's how big and how much money there is on the table for this. And if you've convinced me of that, my next question in my mind is like, come on, man, if this is such a clear problem with a clear solution and a huge market size, surely someone is going after this already. And so you switch to competitors, right? Like, here's how we differ from all the other people who think they're going after this. And then it's, okay, okay, okay, I see. I see how you're doing this differently. What is your path to market? How are you going to go capture that opportunity and go disrupt those competitors? And then it's, okay, I buy that. How far along are you in tackling that go to market, that hypothesis, that product? And so then you switch to traction. And then the next question in my mind as an investor is, cool, this is really cool. Where does this go? If you win that solution, you have that great team. You start taking part of that market. You start beating those competitors. Where does this go? How does my X dollars turn into X times 100 or times 500? And then you thoroughly convince me, hopefully, and then you hit me with the ask, here's how much money I need from you and how much equity we're selling. And so that's why that order is roughly right. Because you're kind of knocking over the objections or the skepticism or building the story in a very, very logical sequence. Now let's dive into each one of those in turn. First of all, why do you start with a problem? Because a problem represents an opportunity. If you solve that problem, then you have a viable business, right? So even if something looks like an opportunity, you really want to frame it as a problem that can be solved. And then one of the things you sometimes hear with problems is, pain killers are better than vitamins. That's one of those little bits VC startup jargon, right? So why pain killers rather than vitamins? The idea there is an acute problem that people have strong motivation to solve, like a headache, is much easier to sell into than a problem where it's more like there's upside. You feel fine, but if you take these vitamins, you might feel even better. That's a more difficult consumer behavior to change. Now I would note that there's like a multi, multi-billion dollar global industry for vitamins. So it's not that vitamins are something that you cannot sell, but if you can frame your problem as a headache rather than a wellness play as it were, it's an easier sell to make. So I think that's one of the best practices. One of the biggest mistakes I've made along my career is getting very excited, you know, to go back to one of our earlier episodes, getting very excited about an idea I have for something I want to see in the world or an opportunity I see in the world. You know, if everybody just did it my way or adopted my technology, my product, my idea, then this whole other thing would be possible. And I would frame my pitch that same way. And I would often get people saying the phrase to me, "This looks like a technology in search of a problem." I would get really, really frustrated by that. I was like, "What the hell are you talking about? Can you not see how the world would just be better if this thing existed?" And what I wasn't understanding, I wasn't grokking until I'm barrisingly late in my career was I needed to solve someone's problem. And this is echoing again that the thing that we discussed very early on, which is it's not about your idea for how the world can be better or how this really sexy app can be built. It's about the problem, falling in love with the problem. And so you start with that problem. The other thing I would say about this slide is that the mistake I often see is that people want to jump to the solution very quickly. So they start to conflate problem solution in this first slide. Avoid jumping to solutions in your problem slide. Just be very, very kind of a matter of fact about X amount of millions of dollars are being wasted because of A. And people are feeling enormous pain because of B. And there is enormous friction, frustration, and suffering because of C. And try to stick to the top three to five measurable pain points that ideally are expressed in dollars or conversion or waste the top three to five clear examples rather than a long laundry list of kind of debatable issues that someone could sit there and have various degrees of conviction on. So if you're again, think of the VC, they're sitting there and if five out of your 15 bullet points, they could debate with. And it's a bad list. You just want to have the three to five indisputable things that everybody can look at and not they're heading go, yeah, that is a real problem. I completely agree with you. In a sense, the biggest mistake that's made with the problem slide is simply not there. But like you can conflate it. But the biggest issue is so many decks simply skip it and they're like, we're building this thing. And they haven't even explained why it's important that somebody builds it. Yes. I think there is one little bit of subtlety here with the problem slide, which depends on the type of problem you're addressing. If it's something that is a relatable problem and I'm thinking like, you know, a B to C or something like that, this can be very short and it can appeal to people's intuition. If you look at the famous pitch decks that we're doing the rounds over an Airbnb, is this can be really short because you know, the problems of accommodation or taxis are like, okay, I get it. I have this problem in my life. But if you're doing something more esoteric like fixing some issue to do with how freight dispatching happens in multinational freight forwarding, then you need to be educating your audience about the problem at the same time as making it clear that it exists. And you need to do that in a way that's really succinct. So you actually have a much more challenging job there. And again, to Chris's point, like you don't want to have 10 different things and like appendices and footnotes and so on. So you need to think of a way of expressing that problem that is really crisp and makes it obvious to people that, oh, okay, this is a real problem. And I can see that it's painful and therefore it's solving it would cause a lot of benefit and be a big business opportunity. - I actually think even if it's a consumer app though, like an Uber or an Airbnb, and even if the problems with that seem intuitive or obvious, I really still like having three or four clear, indisputable specific characterizations that make people like really nodding their head and saying, "Oh yeah, like yeah, taxis are really hard to hail "and oh yeah, they are dirty and inconsistent "and oh yeah, they're really very expensive and hard to find." And part of the reason for that is because when we move to the solution slide, what I like to do is actually have a sister or a pairing for each of these problems, I have a hypothesis or a productizable solution to address those specific three or four things I just talked about on the problem slide. And so I like telling that story of A, B, A, B, A, B for the problem and solution. - Let's move on to the solutions. The interesting thing here is we spent all of episode to ripping into ideas and talking about why your ideas are worthless and that's not important and it's all about execution. And now we're like, okay, we've got a pitch check and we're gonna share our solution. There's definitely some subtlety here. What do we mean when we talk about sharing a solution and what does a good practice look like here? - Yeah, well, what I mean by sharing your solution is a little bit of what I just touched on, which is given these broad areas of behavior in the problem space, what hypotheses do we have or what intuitions do we have about, how do we address directly each of those things? It shouldn't be so specific that it's right down into the implementation details of like, we're gonna have this button here and that button there or even this screenshot and that screenshot, it should be broadly speaking for the sake of argument, let's keep using Uber. Broadly speaking, the problem with taxi is there is a constrained supply that you have to have these medallions, these yellow painted cars with $100,000 fit outs and there just isn't enough of them to go around. Let's say that's one of the subproblems on the first slide. Well, the sub solution would be, we should open this up to a marketplace of peer-to-peer, people who can onboard themselves be trained and kind of have a self-balancing marketplace. Now that's not exactly how Uber pitched it and not exactly the way you would pitch it, Uber started from something more primitive than that. But the idea being you have a hypothesis that, well, if taxi is constrained, then the solution is to open it up to be more of a peer-to-peer marketplace. We don't know exactly how, we don't exactly know who we're gonna target, we don't know exactly what some of the characteristics of that marketplace might be, but we believe that a fundamentally different business model from curated top-down hiring of full-time drivers to peer-to-peer marketplace, we have a hypothesis that that's the business model shift that needs to crack this open. Sometimes I use the term solution space or approach to describe this. So you've got to hypothesis, you've got a basic way that you're going to try to solve the problem. And within that space, there are many different solutions and you're going to do that discovery and exploration to find the solution that really works. If you can't find a solution that really works within that space, that's when you are doing effectively a pivot. So now the next slide that we typically talk about is team. Who you are. Why is it so important to talk about the team? And how should you be talking about the team? As I've mentioned earlier, I think you could have team a little bit higher in the deck if you're very, very early stage or a little bit lower in the deck if you're a little bit later stage, but the team is intended to demonstrate to the investor that this is a credible group of people who have the right mix of skills and pedigree to execute the thing they're claiming they can execute. And we've touched on this in the last couple episodes, but really the founding team, it's ideal if they have some operational experience, some unfair advantage, some startup experience that demonstrates it, they're probably the right people to do this. And or they've been able to gather the right kind of angel investors or advisors to compensate for their weaknesses, for their blind spots, for their inexperience. And so that's what that slide's about. I would also caution that in terms of mistakes on this slide, people are listing like either the whole team or the whole resume, whereas like lots and lots of bullet points and lots of paragraphs of text, what you really want to dig in on is the key two or three bullet points that makes this person the right fit for this company and this story that we're telling today. Exactly. So we talk about why each of these slides forms a coherent whole. We were just coming off the solution or solution space. And what we're trying to answer with the team is, why is this the right group of people? You mentioned unfair advantage. I think that's another one of those bits of startup jargon, which is actually important here, right? Which is investors want to invest in a team that is positioned uniquely well to solve that problem. So yes, there's a bit of credentialing, but you don't want to spend all the time talking about your PhD and your MBA, unless your PhD happens to be in the exact area of the problem that you're solving. In that case, you should talk about it a lot, right? So it's not just about boasting, it's about saying we have this great fit between the solution we're trying to build and the team is trying to build the solution. And you need to craft that narrative using the people that you have, the credentials experience that you have. So it's not just spray and pray, try to be thoughtful about the story that you're trying to tell about why does it the right team. The term that comes to mind is founder startup fit, right? Yep, you really want to display the team through the lens of why these people for this startup at this time. And so you have to be very precise about the lens that you apply to the words that you put on that slide. And the key people that you put there rather than just listing everybody and their dog that's participating in some way. Over 7,000 global companies like Atlassian, Dovetail, Flow Health, and Quora all use Vantage to manage risk and prove security in real time. Why aren't you? Get $1,000 off Vantage when you go to vantage.com/tsp. That's vanta.com/tsp for the startup podcast to get $1,000 off. So the next slide then is the market sizing slide. And I'll be frank with the audience, I hate this slide. Hey, I was gonna say that. It's the worst slide ever. It is the worst slide. It's so bad. It's the one of those slides where it's like how long is a piece of string? How do you really define what the market is? How big is this market? Really, how much of it can you really go get? I've tried to jump into the middle here 'cause we hate it so much. But let's talk about the purpose of the slide. The purpose of the slide is to say there is a big bucket of money available to our startup if we address this problem that we talked about. And you want to provide some quantification for how big that bucket of money is. And as I said, that's a really hard thing to articulate because trying to measure exactly who your target customer might be, exactly what bucket of money their purchase might come from, understanding things like the market, expanding. For example, Uber grew the market, the taxi market. So if you just looked at the taxi market, that would be quite a different market opportunity than what Uber was able to create. It's a real art to this in terms of framing it and in terms of doing the research to come up with credible numbers for it. But unfortunately, you have to do it and you have to spend quite a bit of time coming up with something that you think is credible, defensible and tells the story well. You're absolutely walking a bullshit tightrope with this one. We're on the one hand, you can have this kind of very prosaic. This is the market that's right in front of us. If you're Uber and you're offering black cars in San Francisco, you can say, that's like a $10 million market and then no one will invest in you. Or you can sort of expand a view and talk about the big picture and you can say, well, you know, there are a billion people in China and if 10% of them spend $100 in that product and that's $10 billion, you know, I think those are both common mistakes. If you too much focus just on what's right in front of you, you're not going to show a market side that's appealing for venture capital. But venture capitalists are very sensitive to this like nonsense top-down thinking where it's like, there's trillions of dollars in the world and if we can get 1% of the his trillions of dollars then we're massive. You need to have some sort of set of assumptions that feels ambitious but realistic and targeted and thoughtful that makes them say, okay, you're not guaranteed to get this whole market but we can say that if you execute your job really well, then you're not just pulling numbers out of your ass, you're actually talking about a market that you can genuinely address. This is absolutely an art. I'm not sure what advice I have to give. I'm not sure that I'm particularly good at it but it's one of those things like, you know what, when you see it, when it's done well and when it's done poorly. But I think the really common mistake is the over-inflated bullshit. You need to somehow get your point where you've got a billion dollar plus market opportunity where the way that you got there doesn't just seem like wishful thinking. - Yeah, it's such a painful slide and I agree I think in terms of the ways in which I help startups, I think this is the way that I'm least helpful. You need a market sizing deck here, good luck. But one of the techniques I use to try to make this a little bit easier on myself is amongst other things, I will often have some concentric circles where I'll say, look, here is this very pragmatic, fairly constrained bucket of money that I think we can be tapping into. And then if you go outside that, there is this slightly larger, slightly more amorphous blob of money which we're probably able to tap in. to. And then if you really buy that once we land here, we can go expand into global or we can span into these adjacencies, then this is a much, much larger bucket of money that we can go after. So in some sense, you're kind of having your cake and eat it too. But really, there's probably an entire episode we can do on figuring out market sizing. Just before we move on from this, I actually think there's a subtle bit of signaling here where the investor wants to see, are you like high on your own supply? Have you drunk your own cool-aid too much? Or do you still have a vague handle on reality when you're talking about the product that you're building? So it's definitely a red flag. It's a bit of a yellow flag. If you have some total addressable market that's based on ridiculous top-down assumptions. So you want to show your pragmatism in a sense of type of humility while at the same time showing that even once you do that, there's a lot to go after. So the next slide is competitors. And this one I like. I like this one's easy, I find. And so let's talk about the competitor's slide. The purpose of this slide is to show who you're competing against and how you're going to differentiate from them. And there are some common mistakes here around like, well, we have no competitors. It's completely greenfield. And that's often either not true or problematic actually. Because if nobody's going after it, then why not? What's the problem here? Why is no one even taking a stab at this? And so you really want to think of companies that you classify as competitors maybe relatively generously. Because if you're not able to come up with some competitors, you're in trouble. And you want to list those competitors either by name or by category. And what I like to do here is I like to plot them either on a magic quadrant. If you haven't seen a magic quadrant, then go Google one. And getting those axes really right is really important. And the other visual tool I like to use instead or in addition to that is a matrix, a comparison chart matrix, where you list all the features or characteristics or differentiators that make your solution to the problem specific. And then obviously in your column, you put all the ticks. And then in the other competitor categories or competitor names, you obviously will have a thinning out of those ticks as you move over to the right of that comparison table. And I find that to be one of the better ways of visualizing your competitive landscape, I do think that slightly casual intuitive at least to a less experienced founder where saying you don't have any competitors and that's green fields seems appealing, right? But it's actually a warning sign. I think it's what I'm packing that a little bit. So it just doesn't seem plausible that a good market opportunity doesn't have other people going after it. There are eight billion people on this planet. Why the only one who see this opportunity? So I think there's that. And then the other thing is actually market validation, which we were talking about with pattern matching for VCs is they like to be able to say, oh, okay, easier competitors. I understand those competitors and what they're doing. Therefore, I hear the standard you makes the VCs job a lot easier. You'd think that they might be less interested once I realize you have a bunch of competitors. But as long as you have a credible story about how you will be successful at competing, it's actually very comforting for them to know that you have competitors. And you know, it's funny. I've mentioned before that I'm currently going through fundraising and we actually had a VC ask yesterday, oh, why is nobody doing exactly this thing that you're doing in the US? And a part of me got frustrated. I was thinking, well, you'll have to ask, but I don't know. I can't answer for all the people who are not competing with us. But at the same time, you can say it's a very legitimate question. I think the right answer is to sort of think about somebody who's doing something similar and give people the comfort that structurally there is a market there. I think this is actually a perfect spot to talk about two key things. The first is, we often talk about disruption. In fact, the tagline of this show is, this is a show about how to drive disruption. And what's often missed is if you're driving disruption, you're disrupting something. Someone somewhere is being disrupted from the status quo. And so that might mean some middleman or woman being cut out of the marketplace. It might mean some legacy business that used to do business one way based on some business model is going to be shaken up and maybe even eventually dislodged from their leadership position. And so if you are trying to drive disruption in the world and you have no one you are disrupting on your competitor list, that's just a fundamental problem. Even if, you know, think about Coke and Pepsi, you know, they're disrupting water, right? Water is the disruption. So who and what are you disrupting? And you need to be very, very clear about that. And the other thing to keep in mind is you want to be careful about the mistake of like, oh, we're going to have more features than them. So, you know, those guys, they only do this one narrow thing and they don't do these other things. And we're going to go do more, more features, more things. And really chances are the reason they haven't gone and done those things yet is because they're running a disciplined Silicon Valley style execution, which is to do one thing really well and then expanded to Jason Cs once the timing is right. And so actually they're very narrow, very focused, very disciplined roadmap is telling them they shouldn't be doing those other things yet. And when they're good and ready, they'll go do those things and have raised tons of money and come and disrupt you with your unfocused, boil the ocean strategy. So be careful about that. What you really want to be thinking about is business models. Why is our go to market or our business model fundamentally different than these other people? And therefore we're going to disrupt them from the outside or from the bottom up, oil the top down. And this is a fundamentally different, better business rather than just a business with more features. So the next slide, go to market. It really talks about how you're going to distribute your product. It's not enough to build a great product that solves a great problem. You actually have to get people to know that it exists and then ultimately use a or buy it. VSA is know this. A great product with no viable distribution channels with no viable go to market is not going to make a successful business. And so in this slide you want to talk about what is your distribution strategy and why is that a good and viable strategy? So Chris, what are some of the best practices and what are some of the mistakes that you've seen in this one? I think if you had to categorize startups into two broad categories, it's oftentimes you're running to startups that are very good at building products, but don't know how to go to market. And some startups that are very, very good at going to market and getting customers in revenue, but don't know how to build products. I feel like that's one way of dividing startups in the world. And so go to market, as you just said, Jannev is very much like, okay, you've got a solution. It's likely some kind of product or experience or business model that you have an insight about how are you going to take this to market? And that might include actually business model. We don't have a plan to talk about business model slides specifically in this run through, but it might be saying, look, we are doing this via B2B and we are going to go find large enterprise customers and we're going to go sell to IT and we're going to price it this way, per seat, and we're going to do it through a sales team. I would actually encourage you to not do it that way. That's probably the worst good market. But the point is that's how we're going to take this thing to market. Or the opposite of that, we want to go direct to consumer. We're going to do a bunch of SEO, SEM, social media marketing, influencer, partnerships. We're going to have a freemium model. People can pick it up, use it, learn about it, love it, invite their friends. And only when they start to bump into limitations around teams and collaboration and access controls, then they'll start to upgrade to other things. And so it's about, how do you insert a wedge into the world and then expand that wedge out over time? So I like that. I think I'm at the very beginning of the show. Absolutely. It's going to be in all the primos. So that's you go to market. In fact, Brian Balfour is an awesome writer about some of this stuff, talks about product channel fit. So you've got your product market fit, but then there's also product channel fit. So the channel is effectively how you go to market. If you can loosely explain why a particular channel is a great way of distributing your product, then you're going to make a lot of investors sit up and take notice. Because this is actually the most neglected and hardest part of the whole thing. Now I want to just do it on a side here and do a little bit of a rant and maybe we'll do a whole episode about this. But just as you're thinking through your go to market, and I'm not talking about how you pitch it, but rather how you conceive it at the beginning, I just want to encourage more founders to think more about going direct to customers. The phrase I use perhaps in eloquently is sell your own shit. That's definitely eloquent. I will oftentimes find founders who are passionate about improving the end user experience, but think that the path to market is via other businesses because they have the users. And that's where the fastest path to revenue is, the easiest path to distribution is. And I just want you to take a moment to reconsider that. I think we should have an entire show about this, about selling your own shit, but just consider that you want to go solve the problem that's in your heart of hearts, not solve some other problem hoping that someone else will take you to market. And that's a, I think a really important thing to think about as you conceiving your business in the first place. Yeah, I love that. So now we're up to the traction slide. I guess this is one of the easier ones to talk about. You shared all of this ambition, all of this big picture. How far are you along the journey? So this is where you get to share your actual numbers. If you have them, your customer interviews, your customer feedback, whatever it is that you've got that says, "Okay, we have moved from the world of theory into the world of practice here, and we're getting some good early signs." This is where you go wild on that. I think there's a bit of nuance as with all of these things. Growth always looks good, it always feels good, but as with everything here, you're trying to solidify the hypothesis that you put all the way up there in that sort of problem and solution pair of slides at the beginning, which is highlighting the ways in which the existing traction shows that solution that you have is likely to work. I think this slide kind of evolves as your business evolves, right? So if you're pre-product and you have a series of hypotheses, your traction slide is maybe what you've done to go prove out or validate some of those hypotheses. If you've shipped product, then your traction slide is maybe more about the actual user adoption and growth that your product has achieved. If you are moving into expanding the team, perhaps, you can talk about some key hires or some key bets that you've placed that are going to set you up for success. But really, the most ideal answer on the traction slide is really metrics. And if you can show a hockey stick curve on this slide, you win the slide. That is really the ultimate traction slide, is a hockey stick curve. That's really what everybody is aiming for in a startup, ultimately. Yeah. And a close second is retention. So yes, you can grow on the top line. But if you can show the people stick around and keep using your product, then that's a slightly more sophisticated and mature metric that investors absolutely love to see. And, you know, I just went through why I culminate over with Circular and Demoday now has been compressed down to a single slide, one minute presentation, which is a challenge. Of course, brevity always takes you down to the essence. And really what you talk about, you do a single slide with a mini version of what we've had here, right? Which is nearly every slide looks like problem, solution, total addressable market and traction. And yes, all the companies that had a curve that just looked like it was up and to the right and a bit exponential, they had that graph, front and center of the single slide that they were allowed. We talked in the previous episodes about investors invest in team technology and traction and depending on the stage of your business and the pedigree of your team, you need to lean on different things at different times. And so that's why we talked about if you're early, the team slide goes up towards the top. If you're a little bit later, the team slide goes towards the bottom and the traction slide then naturally just because of the stack rank of things floats up a little bit more. It's just such an important slide and important concept. So many founders get stuck on building an app or having an idea or doing a bunch of research. And it's ultimately about delivering value to a large and growing number of people. And so the traction slide, if nothing else, is the most important thing that you're ultimately aiming for is that traction. Okay, the next slide is where can this go? This is where we talked about in previous episodes A, B, Z or Z depending on where you live. The slides so far have mostly been about A and B. Here's this very pragmatic problem and a very pragmatic solution and a credible market size and an incredible analysis of competitors. The where can this go is Z or Z? What is the end state of this? If you solve that problem, what are all the adjacencies, what are all the opportunities, what's the data play, the insight play, the partnerships play, how do you take the oxygen out of the room for this category of problem in the world? This can be a lot more creative. It doesn't necessarily need a bunch of data against it, although you might talk about how there are some addressable markets that are unlocked from these new adjacencies, but it is where you get to be a little bit more aspirational without losing your credibility. I think this ties back again to that total addressable market slide. It puts a little bit of meat on that bone and it's like, okay, our current solution maybe doesn't take the whole market, but this is where we're headed. I like your concentric circles way of presenting the addressable market. This is where you start to show how you capture those outer rings and say, okay, we've got a big ambition today. We're just black cars in San Francisco, but in 20 years time, we've reinvented transportation and this is what it looks like. VCs love to see that combination of ambition and pragmatism and this is where you get to tie those two things together. Now, the last slide is asked, I think we can probably more or less gloss over this slide because we've spent so much time talking about crafting your ask and valuations and so on in the last two episodes, but really, this is where you get to write all of that stuff down. How much money you're raising? How are you going to be spending that capital in terms of percentages of the capital raised? Maybe how much equity is up for sale, although that's usually dictated by the terms that come in from the market. And then basically making the ask any good sales person will tell you you have to ask for the sale. This is saying, okay, we've hopefully thoroughly convinced you. Here's the amount we're raising. Here is some of the terms we're thinking about and here's how we're going to use that capital. That's pretty much your deck. And we mentioned at the beginning, this is jazz. This is your jazz standard. If you follow this path, then you're not going to go too far wrong. But you know your business. You know your pitching style. You know the strengths of your narrative. You know your business is going to be neatly well. And so once you're confident with that, you can start burying this of course. Another thing that most founders who go through this process will say is that their deck evolves over time. So once you start getting the responses from investors saying what resonates, what doesn't, it's actually a really great idea to keep modifying your deck so that you get the tightest story that you can for them. Absolutely. It is a bit of jazz and you can do those variations. We discussed one thing I will caution though is, you know we talk about making it easy for investors to digest your story. And so this really is a pattern, this storytelling order that we've just gone through is really a pattern investors are very familiar with. I have run into founders who say, well, you know, I didn't like that other format. I threw it out and I did it this whole other different way. And I wanted to start with our vision and where we want to go in the world. And I just felt like that was more true to our story. I really would encourage you to follow the pattern until you have a high degree of confidence that you understand the pattern, understand how to break it well and that you have really, really good reasons for that because the path of least resistance is to try to format this in a way that an investor is familiar with and can follow and feels very comfortable. I chose jazz carefully because jazz is creativity within quite tight constraints. You have a core progression, you need to follow it and you can be creative with in-match. And this is kind of your core progression for your pitch decks. So I completely agree Chris, you shouldn't stray from it too far. I think maybe just one final sort of thing to wrap up is we're focusing on each slide. I thought it might be worth talking about a few common mistakes for the deck overall. And there's one that for me, very much front of mind, which is too much text. And this is a classic thing for any slide presentation. So it's not unique to pitch decks, but nonetheless worth calling out. You've got a complex business, you've got lots of data, you've got lots of thoughts. It can be tempting to create slides that have 300 words on them divided into 12 bullet points with five diagrams. Just please don't do that. You've got a slide deck that needs to serve dual purpose to be read and also presented to in a live setting. And you want to focus people's attention on the small number of things that really make a difference. So keep your presentation to relatively few words and relatively few diagrams. Make sure they tell a really tight story. I've recently been using this phrase, the higher up you go, the bigger the font should be. That really speaks to this as well, right? And VCs are in some ways some of the higher ups in the pecking order in terms of you need to go to them and convince them of this stuff. And so, you know, keep that font size really large, keep that word count really low. And I find people often underestimate design as a communication technique. And I don't mean design is in like beautiful brochure style layouts. I mean, putting the information into a diagram. So if you're describing a flywheel, put it in a circle with one thing connecting to the other. If you're describing a funnel, put it on a funnel diagram, help people understand the mental model they should have in their head and use as few words as possible. If I'm trying to say a two sentence point, I will try to find the two word summary of that sentence, give it a name or headline. And I'll have the headline dash the sentence so that if they read nothing but the headline, I win. The other trick speaking of broad patterns is the headline on each slide. People often will put problem solution team at the very top of the slide. What I do is I do that in very small writing, like in a little block writing at the top, you know, team problem solution, whatever. But in the in the large font, I'll put the key takeaway I want the investor to walk away with. So I'll say, for example, for problem, you know, let's continue to use Uber. Getting around the city involves enormous inefficiency waste and frustration. Like that's the headline I want you to walk away with. And for solution, you know, might be something like a peer-to-peer real-time marketplace makes transportation easy, fun and effective. And you talk about market size, you talk about like an X billion dollar untapped opportunity. Something like that. Put the headline at the top. And so if the VCU reads nothing else, even it's like subliminal, it's neural linguistic programming, they walk away going, oh wow, this is a really painful, highly inefficient problem space. Wow, this is a multi-billion dollar opportunity. And so you put that at the top and then the rest is the rest. One thing that I've observed through this fundraise, and so I can't speak to its universal applicability, but spoken to a lot of investors, is first of all, they will want to get your slide check as an advanced rate. So you'll send it to them beforehand, and all the good investors will have already read it. So you need to make sure that you format it for being read without being spoken to, while still keeping it to not that many words. So it's a challenge I won't lie, but that's what you're aiming for. And then what you actually find is often in the meeting itself, you're not even presenting the deck, because I've already read it. And what you're doing is effectively diving straight into Q&A. The deck might sometimes act as a prompt or as an illustration, but it becomes more of a free-flowing conversation. So another thing I'd really encourage people to do is have a good readable deck, and to make a standard practice of sending it to investors when you set up that initial meeting. And perhaps the last point to make, which may or may not be obvious to some people, is we talked about each of these slides. They really should be no more than a slide, in best case. And so really what we're talking about is a 10 to 15 slide deck, and it should really not be any more than that. On occasion, you might have an appendix, where there is some key slides that address key objections, or deep dives and things that often vcs through your experience, having pitched a few of them they want to dig into. And so you have an appendix slide to jump to. But that core narrative should not be any more than 10 to 15 slides. Well, I think we covered pitched decks pretty well there, Chris. What's really funny is, before we start recording, we both thought, you know, this is not going to be a very long episode. But, you know, an hour in, I think there's a lot to unpack here, right? Heaps to unpack. So today, you know, we talked about bullshit tightrope wedges in the world. We talked about jazz, we talked about turtles, and in between, we talked about how to craft a great pitch deck. The standard format that it follows, common mistakes, and best practices. So writing pitched decks is actually a core part of your job, as a founder, whether you like it or not. So getting good at it is actually very high leverage thing to do. Now, don't forget to jump into the comments and let us know what you thought about this episode. Let us know about your favorite pitch decks. There's some of them that have been out there published, and they're kind of like trading cards these days. So tell us which ones you like. Tell us some tips and tricks you've had while fundraising and developing decks. Of course, follow us on all the social media, Twitter and Instagram and LinkedIn and what have you, both personally and the official of the startup podcast channels. And of course, most importantly, please go to your podcast app and subscribe, rate, review, and tell the world how great we are because it feeds the algorithm and feeds our ego. Thanks so much, Chris. It was fun as always. Catch you in the next one. See you later, guys. Bye. [Music]