Once Upon a Pitch Problem #11 (last of three newsletters in a row on the Competition Slide)
“I am getting investor feedback that the Competition Slide needs changed so I keep tweaking it,” lamented a frustrated founder during a pitch practice meetup. “I’ve even had investors tell me to add data that is already on the slide!” I asked the founder to share the slide on screen and Pollock’s Convergence appeared: a pedal-ish diagram (or is that a blimp-shaped 3-D pie chart?), a Power Grid with not enough competitors and too many green check marks, and an addressable and serviceable market bar chart only sort of related to the product, all cluttered with arrows, colors, patterns, footnotes, and wee little, teeny, tiny font.
I took down the founder slide and put up an exercise slide with 3 bullets:
Problem: difficult for consumers to reliably and efficiently get a taxi
Solution: an app on your phone that matches rider requests to drivers of black town cars that are nearby (GPS) and have free time to take the ride
Other solutions: [blank]
“This is Uber at the start of their journey. Give me all the other solutions to the problem to fill in, just say it out loud and I’ll type,” I said. Long pause, “Lyft,” responded the founder. “Yup, what else?” “I don’t know, it’s not my market,” the founder quipped. I started typing, adding to Lyft: walk, public bus, private bus, bicycle, scooter, motorcycle, hitchhike, train, subway, rental car, your own car, borrowed car, skateboard, pre-ordered taxi, town car, limousine, stay home, change plans, ferry. “Okay, I get it,” responded the founder, laughing. We cleared the Uber information and filled in the same bullets with the founder’s customer problem and solution. Together, we then brainstormed a comprehensive list, in plain black text, of ‘other solutions’ that ended up actually telling the story of the competitive landscape.
Solutions
If you don’t get it, no one gets it. As the storyteller of your startup, if you can’t answer a question, no one can answer that question. You created the characters, the time and the place for the story and if you don’t know how the characters get from here to there, then nobody knows. If you cannot easily answer who the competitors are, now and in the foreseeable future, and how you fit in that landscape, go back to first principles: what is the customer problem, what is your solution, and who or what else can (or will) solve that same problem. Paint the picture with the graph/diagram/chart that matches the stage of your company development; if you don’t have a product yet, the Power Grid is not for you and if you don’t know your TAM and SAM, learn it because this is the raison d'être for investors. If you are still struggling, then look hard at product-market match because odds are you have a solution looking for a customer problem, a fatal flaw that needs fixed before taking any other action.
“And because of this . . ..” The Competition Slide is that part of your story where you get to dream big about all the upheaval, chaos and economic value you will create by solving the customer problem. This is not a candle and match story; this is the bigger, transformative lightbulb and electricity story. The Competition Slide should landscape tectonic-level heaving and tilting of your industry segment with unadaptable companies out of business, innovative new companies in business and wholesale creation of new economic value, shedding ideas and opportunities all around it. The economic value of the Apple iPhone is not just revenue and job creation from device unit sales: think about the independent software developers creating apps to solve user problems and distributing those apps through the App Store on the iPhone (e.g, Waze, Duolingo, WhatsApp, Angry Birds, StubHub, Twitter, Slack, Spotify). Landscape your direct competitors for the Competition Slide then go a step further in your story by asking yourself what happens next to you, the competitors and the entire industry because you solved the customer problem.
The reason magic quadrants and pedal diagrams struggle to describe a startup’s competition is because they begin from a flawed premise. They both assume that consumers use products for similar and easy-to-define sets of reasons. However, the consumer behavior is significantly more variable and nuanced . . . The real competition is - and always will be the status quo . . . It might be weird, but it’s real, and that’s what matters. So if you want to describe your biggest competitors in a pitch, here’s a simple PowerPoint slide that’s guaranteed to work no matter what.
Author The First Principles Pitch, startup storyteller, board member, advisor and investor. Once Upon a Pitch is a weekly newsletter looking at one business pitch problem and offering storytelling solutions to help solve that problem.
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Always pitching -- always learning... and this always gives me something to think about. Thanks!