I have seen thousands of pitch decks and all of them have at least one slide on competition. Unfortunately most startups use this slide to simply check the "See I know who some of my competitors are" box. While this is minimally acceptable, founders are unknowingly missing a great opportunity to show investors that they really understand their market and their customer needs. Let's explore this big mistake and go over how you can avoid it and make your competition slide pop.
The Norm
Most competition slides I see in pitch decks look something like this:
Companies use a 2 x 2 matrix or grid with two very generic categories like price and quality/ convenience and put themselves in the upper right hand quadrant while all of their competitors fall in areas lower and to the left. There are two MAJOR problems with this approach, first off you are only differentiating your company on two factors. Is that really it? Just two factors? If your market is really this simple, it's probably already over-saturated and you are too late to the game. It shows that you really haven't put much thought into your market and your customers if all you can come up with is that people prefer things that are less expensive and more convenient. Lastly, and probably most importantly, this approach shows investors absolutely NOTHING. Wow you are in the top right quadrant? Congrats! You moved your competitors some arbitrary length below and to the left of you? They suck! My biggest issue with these grids is that they don't actually tell investors anything other than the fact that you think your product is better than your competitors. No insight or any useful information can be taken from this slide and investors hate it. So with that being said, it's time to move the "competition grid" to the slide graveyard where it belongs.
The Better Alternative
Hopefully now most of you are running to your pitch decks and deleting your competition slide. However, you are probably wondering what I would recommend instead of the grid. For your competition slide, I would recommend a Benefits Tables with Your company and your competitors in the columns and various customer benefits in the rows. The middle of the table can be filled in with "Check" and "X" indicators to show which companies offer the different benefits. You can reference the table below to understand exactly what I am talking about:
Using a table like the one above is far superior to the grid. First of all, it defines your business on more than two criteria. Instead of using price, you can include "Addresses X pain point" as one of your benefits which shows you have thought about and understand your market and customer. Having in depth knowledge of your customer is a huge PLUS when talking to investors and calling out several benefits in this table is a great way to demonstrate that knowledge. Next, showing a lot of companies have a certain benefit is a great way to show investors that there is an appetite, or demand, for whatever you are trying to sell. If multiple companies are doing the same thing, like addressing a particular pain point, there is probably a reason why. Additionally, the benefits table facilitates more QUANTITATIVE categories over qualitive ones. It's easy to say your product is more convenient, but it's much better to quantify that benefit in terms of time saved or a percentage increase in terms of the speed of a task. Lastly, this benefits table opens up the opportunity for benefits that might not be included in your product. For example, if you are a Health Tech company selling a SaaS product and you have an existing network with hospital systems from a previous job, include that benefit in the table. This is a valuable piece of information that investors might not know, which can be called out as a key differentiator.
Summary
Competition is one of the most important and talked about aspects of any business trying to raise money. Don't put investors to sleep with another boring 2 x 2 grid. Instead use the competition slide as a way to show in depth knowledge of your market and customer and differentiate yourself from the pack. If you have any questions about the competition slide or need help building one, please reach out. InfleXion Point Advisors is happy to help!
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