Pitch Decks - The Two Problem Slides

Avoiding Common Issues in Pitch Decks - The Two Problem Slides

As part of the Avoiding Common Issues in Startups series, let’s talk about the two slides that are most likely to derail a #PitchScrub session - or worse… lose your audience at a #PitchCompetition! The Problem slide and The Market slide.

But, before we get into that, I have to give a big thanks to my friend and fellow mentor on the west coast, Mark Szelenyi for sharing his thoughts, experience, and expertise in helping to write this article.

The Problem

If you have read the other articles in this series, you know that The Problem slide is usually where you start your pitch. If The Problem isn’t stated well, then everything else is misfocused or even irrelevant. So, it is critical that your problem statement resonates with your audience from the very beginning.?

As a mentor or audience, sometimes it is not until The Solution slide or The Market slide that you realize that The Problem is off. A mentor can help you fix that problem, but if it is your audience that gets lost, it is too late.?

What are some of the common problems with The Problem, you ask?

Too Technical

This is my “favorite.” Most of my articles that talk about The Problem slide say something about keeping it understandable by people outside your industry.

Most of your potential investors DO NOT come from your industry.

The mindset is that if the founder can’t explain The Problem in layman’s terms, then how is it going to be marketed to the masses?

As mentioned in previous articles, have someone outside your industry read your problem statement and explain it back to you. If they get lost or misinterpret it, your audience will, too.

Too Broad

I can’t tell you how many times I have heard someone tell a founder that he or she is “trying to boil the ocean.” (I literally heard it twice today!)

I had a boss 20 years ago in the corporate world tell me, “John, pick one thing that you want to be known for, and do it well.” That advice certainly carries over to the Startup world.?

The M in MVP stands for what? Minimum. Keep that word in mind when you are defining The Problem. When you are starting a business, make sure that The Problem you are trying to solve is manageable and obtainable. If it is too big, then you’ll take longer than you think to get a product out the door.

Remember that you don’t need a multi-billion dollar market to have a successful business.

Conversely, you don’t want to make it too narrow (that usually comes to light in The Market slide), but it needs to be large enough that it will support a business.?

Not Targeted to a Persona

To make your problem specific, you need to target a specific type of buyer with the problem your product solves, we might call this your buyer persona.? One great way of knowing if your problem is well defined is if you can describe clearly who benefits from a solution to the problem.? I often see a lack of attention to the process of researching and segmenting potential buyers and how they drive the problem statement.?

Not Digestible (in less than 30 seconds)

This can be caused by technical jargon or too much detail. While it may be tempting (consciously or unconsciously) to stroke one’s ego by making The Problem sound complex, that is a mistake. Why? It is very simple.?

Complexity = Risk

Investors don’t like risk. If someone doesn’t understand The Problem that is trying to be solved, then they are unlikely to understand The Solution either. Either will scare away investors.

Quantify the Pain

To best describe The Problem try to state the pain points very clearly and in terms your audience can relate to.? For example, in a pitch for a new business solution we should be able to identify the dollars saved (or made) due to the use of your solution within the business.

The Market

There are a lot of things that can go wrong with this slide and set off alarms for potential investors. This is a very important slide, because Product-Market Fit is a big factor in whether a business appears to have potential to make money. If you don’t appear to have done your homework with your market or your numbers seem contrived, then you have lost a lot of credibility - and probably any chance of getting funding from that pitch.

Here are some of the most common problems with The Market slide.

Too Broad

If The Market slide shows some giant market with billions and billions of dollars (or more), then this sets a few things into motion in your audiences’ minds. First, if this is a huge market then there is probably a lot of well-established, well-funded competition. Second, you are going to try to “boil the ocean” (yes, there is that phrase again), and the product will need to be too big or too broad to be feasible. (Again, complexity = risk.) Third, you haven’t done enough research to narrow down your market, or you are overconfident in your abilities to launch a company.?

Lack of Credibility

Yes, we all want to see a big and growing target market, but when describing your Available (SAM) and Obtainable (SOM) portions of that market, it is advisable to focus on the portion that your solution addresses best.? Merge this together with your company's ability to address that market and you will reach an accurate and credible statement of market size.

Wrong Metrics

This is when your marketing metrics don’t really match what you are trying to do, and it is related to Credibility above. I used the example of real estate in a previous article, so let’s go with a different one here. Let’s talk about a training application for a specific industry that trains staff on a particular skill. There is a temptation to base the market size on the value of the transactions in the industry, which is likely a huge number. That is fine, if the price that users pay is based on the price of a transaction in that industry. However, in this case, the market for the app is more likely related to the number of staff in a certain role or job type in that industry, rather than the total sales of that industry. Using a metric based on industry value is irrelevant, unless you have a statistic on training dollars spent per transaction amount - which is unlikely.

Wrong Problem

Sometimes we get to The Market slide and it doesn’t match what we understood The Problem and The Solution to be. When talking through The Market, we realize that The Market is correct, but it doesn’t add up with The Solution, then we realize that it doesn’t add up with The Problem either. This is a time to revisit The Problem slide and make sure that it is defined correctly and matches the Solution and The Market slides.

Summary

Avoid common problems with The Problem and The Market slides to make sure you tell your story in layman’s terms and that it is credible and feasible!

As mentioned in previous articles, it is best practice to have friends review your slide deck, then ask them to tell you what the problem, solution, and market are. If they get it right, move on to people that you may not know as well, who are not familiar with your company. Ask the same questions of them, and see if they get it right. Keep refining these slides until they do.

Save a link to this article as a reference for writing your Pitch Deck.

Questions? Put them in a comment below.

Need help with your Pitch Deck? Direct Message me and we can talk.

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