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- ♞ Common Problems: Business Model Slide
Today, we continue the 10-issue series in which I discuss the most common problems that I see on each slide in founders’ pitch decks. Today’s issue will look at the Business Model Slide.
What is the most common problem with the Business Model?
This is a slide that many founders overlook, and it’s easy to see why. In the scope of your deck, it seems relatively straightforward, especially if you have a “traditional” business model that investors will be familiar with.
The problem with that mentality, however, is that the business model is key for investors. It’s how you make money, which means it’s how they get a return on their investment. They want to know that you can monetize and do so effectively and repetitively. In their mind this is not a slide to skimp on, its’s a critical linchpin of the business. The business model is the difference between a business and a hobby.
Let’s discuss some of the common problems I see on this slide:
Unclear monetization - If you are at the pre-seed phase and don’t need to monetize to raise a seed round (this is becoming incredibly rare), then you can get away with sharing a couple of options just to show that you can monetize. If this doesn’t describe you, then you should run with one monetization option in your deck. Even if you plan on testing multiple options or monetizing in different ways, your deck should just be clear about one of them so that investors can visualize how you will make money. You’ll always be working to perfect your monetization and extract maximum value, but you don’t need to dive into every option in the deck.
Show it from the customer’s perspective - Most investors like to hear the business model/pricing/value from the customer’s perspective. So, talk about how it will be $5/month for individuals, then as they scale, they can go to the higher plan for $20/month instead of just saying that you charge an average of $10/month.
Does your deck feature any of these common problems? |
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Onwards and Upwards,
