Hi, everyone. This is Alejandro Cremades, and today we’re going to be talking about
how to show the competitor landscape in your pitch deck. Before we get started, make sure
that you hit that Subscribe button, and this way, you will never miss out on any of the
videos that we roll out every week. Displaying your landscape – the competitors,
whether that is directly or indirectly, is a critical part of being able to raise money,
showcasing, and putting your pitch deck in the best light possible toward investors.
In today’s video, we’re going to be breaking it down and walking you step-by-step through
how to put that landscape in motion. With that being said, let’s get into it.
Who is your competition? At the end of the day, just like Mark Cuban says, there are
at least 100 other people that have thought about your idea either directly or indirectly.
So, you’re not the first one. Everything, for the most part, has been invented. Now,
obviously, you can make it better; you can make it faster, but, for the most part, everything
is out there. Now, it is a big turnoff for investors when
you literally tell them, “We are the first ones to do this. There is no one that is competing
with us.” This is the kind of stuff that really sounds the alarm for the investors.
They’re going to run in the other direction if you do this.
What you want to do is you want to do the research. You want to go online. You want
to go on Google. You want to ask people. You want to have those right conversations. You
want to try to go to websites like Crunchbase, PitchBook, Mattermark to see who is competing
in your own segment. Who is the closest one? And try to dig in as much information as possible
because the more that you know, the better you’re going to be.
No, the other thing that you don’t want to do is either dismiss them or talk poorly
about them because the world is small, and also for the investor, it’s a turnoff when
you’re speaking poorly about certain competitors that could actually acquire your business
in the future. So, whatever you do, just be polite about it; be diplomatic; don’t be
dismissive, and always try to identify who the players are that could take the food off
of your table and that are essentially competing directly or indirectly with what you have
in mind executing. You should also look at potential future competitors
because the truth of the matter is, is that when you’re about to launch a business or
you’re already executing on a business, the way that you should always go about it
is always: think big, but start small, which is essentially building a store into a mall
rather than the other way around. Always, entrepreneurs try to go really big. They think
too big, and it scares people off. So, you want to start small.
Also, what you want to do is identify who could be future competitors. Maybe, right
now, you want to start small, but as you continue to build, you’re going to be perhaps competing
with other players. So, having those players identified and being able to talk about them
during some of your discussions can actually really prove on your behalf and then help
you so that investors are like, “Okay. Joe Smith or whatever your name is has done their
homework, and this is good.” As part of the work that you’re going to
be doing on researching those competitors is also knowing how much capital they have
raised, meaning that you need to do your research and know at the same cycle that you’re in
your business in this lifecycle of your business now. How much did they raise? At what valuation
did they raise the money? And what you can do is identify four or five
competitors, and you literally put yourself right in the middle because that is going
to help you during the discussion so that when they talk about valuations, and they
even say, “Hey, your valuation is too expensive,” you can say, “Yes, but that is what the
market is paying, and in fact, we’re right in the middle. We don’t believe in negotiations
because, in negotiations, there’s always someone that wins and someone that loses.
We believe in partnerships where everyone wins, and that’s why we did our research
and we are exactly in the middle of what the market is paying.” By doing this, you’re
going to come across in a very powerful light. So, again, do your homework and try to see
all the people that are going up against you, directly or indirectly. How much money did
they raise, and what were those valuations? As part of the research on the competitive
landscape, you also need to take a look at who are the potential players that may be
interested in acquiring your business? Typically, you can even put a slide at the end of the
deck that talks about this. By the way, you can actually look at using
the template below, the pitch deck template below that founders are using all over the
world to raise millions. But here’s the thing: by identifying those
potential players that can come in and offer you an acquisition, this is going to help
the investor because in many cases, the investor is going to ask you: what is the potential
exit? How am I going to be able to get my investment back with some returns? So by identifying
some of those players that could potentially acquire you is going to put you in a very
nice environment or light toward the investor because they’re going to see light at the
end of the tunnel. They’re going to see the potential opportunity of getting that
money back with return. So you need to help them to have that type of visibility.
When it comes down to the competitive landscape slide, this is a very important slide, and
people complicate this slide too much. You need to simplify it, and you need to make
it clear for whoever is reviewing it. The way that you want to go about it is by putting
a diagram where you’re putting all the different players. You put the Y-axis and the X-axis.
Essentially, you’re putting the two labels – Y-axis and X-axis. They need to be your
strengths that play to everyone else’s weaknesses. That could be something around your technology.
It could be something around your distribution or whatever that is. But it needs to be your
strengths, and clearly, you’re putting everyone on that diagram, and you’re putting yourself
up on the top right because that’s where the eye always goes to. They need to be able
to identify you and take a look at everyone else and be like, “You know what? I get
it. I get why they’re different. I get why they have an unfair advantage, and that is
what is going to get those investors super excited.
Now, never try to avoid putting people in that slide. Maybe you are concerned about
how it will look. Here’s the thing: if you don’t put everyone there on that slide that
you should be putting, the investor is going to think that you’re either withholding
information, that you’re lying, or that you have no idea about your own sector. So,
avoid doing that because remember that the investor is always coming in with a lens of
“Why should I not invest in this business?” So never give them extra reasons because fundraising
is not about adding concerns. It’s about removing concerns. Ultimately, what separates
you and the money are the concerns in-between. Remember that the pitch deck is never a complete
project or work. The pitch deck is always a work in progress. It’s always a work in
which you’re iterating based on the discussions that you’re having with customers, with
employees, with investors, or potential investors. Also, what you want to do is keep iterating
and keep adding either more players or try to identify how you differentiate yourself
from everyone else. Again, hit a Like to this video; subscribe
to the channel so that you don’t miss out on any of the videos that we’re rolling
out every week. Leave a comment underneath so that I know what you’re up to, and then
if you’re raising money and you need any help, shoot me a note at alejandro@pantheraadvisors.com.
We’d love to help out. Thank you so much for watching.