This is part seven of "The Ultimate Pitch Deck Guide for Startups," a fundraising guide made in partnership with DECKO, a leading pitch deck development company that’s helped ~180 startups raise over $100M from investors.
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Your investors are interested. They see a compelling Market opportunity with ideal timing, a clear and quantifiable Problem worth solving, and a Solution that delivers for its customers. At this point in your deck, you have their attention. Now, they want to know a little more about how your solution fulfills its promise to customers.
As the Founder, you have a better understanding than anyone in the world about the nuts and bolts of your product/offering. Because of this, it is tempting to tell investors everything about the way your product works. However, too much detail can overwhelm and confuse investors who are not as deeply involved in the day-to-day operations and inner workings of your product/offering.
Investors already trust you to know more about your product/offering than anyone. That’s why you’re the Founder, and they’re just financial backers.
Financial investors are primarily interested in how your product/offering drives company value, and strategic investors are more interested in how your product/offering will fit into their existing workflows or company goals.
In our previous chapter on your Solution slide, we learned that investors care about why customers will flock to your Solution and thus drive your company’s value upward. As a result, investors want to know two things about how your product/offering works:
- Can it deliver high-quality results for customers?
- Can it scale without either losing quality or overwhelming your company?
In this chapter, we’ll discuss the “How it Works” portion of your pitch deck. We’ll discuss how to keep investor attention as you pop the hood on your product/offering and what to keep in mind when you are creating your pitch deck slide content.
Now, let’s dive in:
Begin With Your “Core Innovations”
At the center of your product/offering is a core innovation - proprietary technology, assets, processes, or trade secrets that allow you to:
- Run your product/offering on behalf of customers to deliver for them.
- Scale your offering to as many customers as possible while still maintaining quality.
- Remain competitive as new companies enter your market or vie for customer attention.
Begin by explaining what your company’s version of this is.
In DECKO’s case, our Core Innovations are our DECKOSYSTEM™ (asset), DEAL Team™ (process), and proprietary knowledge base (trade secrets).
The DECKOSYSTEM™ is our expansive network of venture capital investors and designers who create pitch deck content and visuals for startups from scratch (asset). To create pitch decks for founders, we connect each startup with a DEAL Team™ comprised of a Venture Capital Investor and Designer from our DECKOSYSTEM™ (process).
As your DEAL Team is creating your pitch deck, they are supported by DECKO’s proprietary knowledge base of best practices and design language so they can deliver high-quality, template-free results for customers (trade secrets).
Because of our DECKOSYSTEM and DEAL Team model, DECKO is able to:
- Create fully custom world-class pitch decks for startups (run our process for customers).
- Service an expansive, global network of customers while still delivering top-quality, template-free pitch decks (scale while maintaining quality).
- Create pitch decks that resonate better with our customers’ target investors by having VCs who invest in similar companies create the pitch decks they would want to see cross their own desks (remain competitive as new companies vie for customer attention).
Another example is Facebook/Meta’s EdgeRank algorithm for identifying what articles to include in a user’s feed and in what order which:
- Ranks and curates articles to be shown in user’s feed (run the process for customers).
- Sorts and routes billions of articles to billions of individual users to deliver a custom-curated feed (scale while maintaining quality).
- Keeps users both on the app for longer periods of time and coming back to the app more frequently (remain competitive as new companies vie for customer attention).
Each company has its own core innovation. Find yours and give it a name or title that makes it feel more productized/digestible for investors who are not already familiar with your business to understand. This will help investors better visualize your offering, priming them to take the next step into your “How it Works” section.
Walk Investors Through Your “Customer/ User Journey”
Since investors want to know if your product can deliver high-quality results for customers, it is important to walk investors through what a customer’s experience with your company looks like. Your Customer Journey slide should show all the steps your customer takes from beginning to end of a deliverable with you.
The shorter this slide is, the better as simpler products/offerings have less friction for customers. One excellent example of this is Uber. A customer journey on Uber looks like this:
- Open the app.
- Input the target destination.
- Get in the cab.
Uber knows a user’s current location and has their payment information stored, which eliminates two points of friction (finding out where you currently are and paying for a ride at the end) to deliver a streamlined customer experience.
That customer experience has only gotten faster as Uber has grown because they continue to innovate on their product and expand their network of drivers.
Remember, your company works hard to acquire customers. Because of this, investors love simple Customer Journeys because it means the customers you worked hard to acquire (See “CAC” in Chapter 3) will be easy to satisfy once acquired.
Show How You Maintain Quality at Scale
Investors are investing at a less mature stage of your company with the hope that spending the money they give you will allow you to profitably acquire and service customers in the future.
Showing how your process scales while maintaining quality helps them better understand your path to profitability.
Let’s continue building on Uber’s example. A customer’s experience with Uber relies on:
- Short waiting times for cabs.
- Trust in the network of drivers.
- Comfortable, efficient rides.
To support this, Uber has:
- A large hiring apparatus with a streamlined driver vetting and onboarding system to maintain an expansive network of cab drivers that decrease wait times.
- Profiles and background checks for all of their drivers along with driver standards that each driver adheres to in order to maintain trust.
- A suite of apps for drivers that help them navigate to their drop-off location and analyze their own performance as drivers to provide comfortable and efficient rides.
All of this is important to investors as it helps them understand how Uber will remain operationally efficient as it scales.
Your company will have its own support system in place that maintains or even improves quality for customers at scale. Show your investors the measures you are taking to ensure your product is ready to scale.
Over time, this support system will allow your company to become more operationally efficient and ultimately profitable at scale.
Consumer Packaged Goods companies, for example, maintain quality at scale through sophisticated manufacturing processes. Over time, those manufacturing processes become more efficient, and they can negotiate better rates with their vendors in exchange for larger orders (also known as “Economies of Scale”). This will improve margins and ultimately make the company profitable.
Once investors can visualize your company at scale, they will feel excited to invest and confident that your company can become self-sustaining without raising additional money.
Your “How it Works” section provides a unique opportunity to help investors understand how you spend your resources to deliver value to your customers and drive growth for your company. It can be spread out into multiple slides as long as it remains digestible.
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Remember, your company is much more dynamic than your product/ offering so do not spend so much time in your “How it Works” section so that you detract from slides on your company's growth, strategy, and traction.
In next week’s chapter, we’ll discuss your Traction section and how to use your company’s numbers to tell a story about your business.
