How to show your target customers in a pitch deck when fundraising for your startup?
Demonstrating your handle on your target customers and who they are plays a big role in fundraising. As well of course as being critical to your whole business and its longevity.
There’s a lot more to showing your target customers in your deck than most realize. So, how do you do it? Where does your target market show up in addition to the target customer slide?
The Importance Of Knowing & Showing Your Target Customers
The #1 Factor For Success
Experienced investors and entrepreneurs have gained much more appreciation for the role of the problem in startups. You can’t have a good solution or strong business, without getting the problem right.
However, it is only logical that you can’t get the problem right, if you don’t really know and have a handle on who your customers really are.
This is where it all stems from. It is the foundation. You either have a strong one or a flawed one.
Founders need to be focused on this and know that investors certainly will be.
Investors will certainly be thinking about how this is going to lead to an exit and deliver returns for them. Who your customers are may indicate who could be good future acquirers and how large they are. For example; are they a good match for Google, Salesforce or Facebook? This is a tricky part of how to show your target customers in a pitch deck.
This can be especially important for strategic investors who may see a path to partnerships and mergers one day.
Keep in mind that in fundraising storytelling is everything. In this regard for a winning pitch deck to help you here, take a look at the template created by Silicon Valley legend, Peter Thiel (see it here) that I recently covered. Thiel was the first angel investor in Facebook with a $500K check that turned into more than $1 billion in cash.
Remember to unlock the pitch deck template that is being used by founders around the world to raise millions below.
Demonstrating you are the right team to take on this problem is hugely important. If you are the best team, then investors will be confident you will figure everything else out, even if that means a big pivot. If you aren’t the best team, then someone else will come in and dominate this space at some point.
Showing your clarity on the target customers in a pitch deck says a lot about the strength and capability of your team.
Use Of Funds
Without complete clarity on your target customers, you simply cannot use any funds you raise well. Fundraising may help cover up for some of these blunders, but only if investors are willing to gamble on you still trying to figure out this core part of the idea and thesis.
Without intimately knowing and understanding your target customers you cannot create a market strategy accurately. You can’t build the right branding or solution either. That can mean millions of dollars and years of waste.
Get the target market right, and everything else will take care of itself in a logical order. This is a critical aspect of how to show your target customers in a pitch deck.
Defining Your Target Customers
The more deeply you can know your target customers the better. The better you’ll do at communicating with them, reaching them, marketing and focusing on the right product features and user experience.
This is embodied in your ideal customer profiles and avatars. For internal purposes, the more detailed you are the better.
This may include:
- Job titles
- Net worth
- Pains and aspirations
- Brand affiliations
- Which communications mediums they use
- What time of day or month they take certain actions
- Favorite colors, fonts, and devices, etc.
Of course, this is a lot of detail. Perhaps pages long for your marketing teams.
When starting out, you probably need to be hyper micro-focused on the best customers. It is the best way to make the most of your time and budget and get fast results.
However, when it comes to building a true hypergrowth startup with huge potential you may eventually need to zoom out as well. Your target may need to be much broader in order to be inclusive of enough customers.
Your Target Customer Slide
Space and simplicity is your friend. You are going to need to simplify this to just a few bullet points to comfortably fit on this slide. Perhaps along with an image.
However, showing your target customer in a pitch deck really starts well before you get to this slide.
The Market Slide
Here you’ll show the total market. The biggest it could be if you could and wanted to serve them all. Next, you’ll break it down to your TAM, and SOM. Who you can really reach and serve right now.
The Problem Slide
Through your problem slide you will demonstrate your understanding of the problem you are solving, through your customer. You’ll be crisp and clear about the problem. Though also drop in how you’ve verified and proven this problem with your target customers in a pitch deck.
Solutions & Products Slides
This is a great place to use images to show your product and solution in use in real-life situations by your target customers. As they say, a picture is worth 1,000 words.
In tandem with your static pitch deck slides, you’ll also have a verbal story to tell. It is powerful if you can use this story to depict you as a target customer, them (the investors) as a target customer, and explain how you ran into the pain, and how they can relate.
It really all starts with your cover slide. The company name, your business address, contact information, branding, logo, and tagline all show the vibe you are creating, and the type of customer it is made for too. Make sure you’ve thought through this alignment in advance.
Hopefully this post provided you with some perspective as you are looking into how to show your target customers in a pitch deck.
You may find interesting as well our free library of business templates. There you will find every single template you will need when building and scaling your business completely for free. See it here.
For more information on this, you may want to watch the video below where I cover how to show the target customers in a pitch deck.
* * *
FULL TRANSCRIPTION OF THIS VIDEO:
Hello, everyone. This is Alejandro Cremades, and today we’re going to be talking about how to show the target customers in a 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.
Putting the people that you’re going to go after on that pitch deck, on that document that you’re using to raise money is going to make it or break it because it’s going to help the investor determine whether or not you’ve done your homework and how well you know your customers, and knowing your customers is absolutely everything. In today’s video, we’re going to be breaking it down for you, giving you all the insights and actionable steps to make it happen. So with that being said, let’s get into it.
The number one factor for success is listening and listening to your customers. That is going to help you understand how you can ultimately bring a solution to whatever problem that they’re experiencing and essentially hit what people call product/market fit. That is when you come up with something valuable that you can’t even keep up with the demand that you are experiencing – product and the services literally flying off the shelves.
I can’t stress enough how many times I have heard of entrepreneurs that have gone to pitch an investor, and they were with their feet up, they were looking at their phones, and all of a sudden, when it was time to talk about the customers, you could see people putting their feet on the floor, putting their phones down, and listening. Knowing your customers is absolutely everything and the number one thing that is going to determine whether or not you’re going to find your direction to succeed.
When you’re positioning your target customers, the investor is going to want to see what kind of overlap your product or your service is having with other larger players because those larger players are going to ultimately acquire your business and give that investor a return on their investment. Is your service targeting certain customers where maybe a Google or a Facebook or an Amazon may be interested? Those are essential things that you want to keep in consideration, especially in your narrative when you’re pitching the type of customers that you’re going after and also how you’re showcasing it on your own pitch deck.
The use of funds is also something that goes hand-in-hand. As I have said multiple times on some of my other videos, it’s all about the flow and the structure that your pitch deck is moving along with. For example, in this case, you want to know how this is going in line with how much money you’re going to be requiring to get in front of those customers and to close them, and to get them excited about what you’re doing.
So, the use of funds, whatever amount of money that you’re going out to market and saying that you’re raising, it needs to be in sync with the amount of money that is going to cost you, as well, to get those customers to hear about you, to be excited about you, and to take action to buy your product or your service.
When it comes to defining your own customer, you want to be as detailed and as specific as possible so that the investor, when they see it, they’re going be like, “Wow! They’ve done their homework. They know exactly who they’re going after.” So some of the ingredients and the different things that you want to look out for are the following:
- Job title
- Net worth
- Pains and aspirations
- Brand affiliations
- Which communications do they use?
- What time of day or month they take certain actions
- Favorite colors, fonts, devices, etc.
Obviously, this could be a little bit broad, but you want to be as detailed and hyper-focused as possible so that it comes across when you’re pitching the investors and telling them how you’re defining the customers that you’re going after. And, believe it or not, they’re going to ask you, and they’re going to be paying a lot of attention when you answer.
When it comes to actually positioning the target customers in your own pitch deck, you want to be very simple; you want to use beautiful visuals that are exactly showcasing what those types of customers look like, and maybe the other things that you want to add of additional interests or data points that you want to include in bullets and in text. So you need to have the nice balance between the text on the one end and then also the visuals. But the visuals, right away when they actually land on that slide, it needs to tell them exactly the type of customers that you’re going after.
The market slide is also going to go in sync with your target customers. You want to talk about numbers; you want to talk about the total addressable market; you want to talk about how that’s growing over the course of time, like the compounding annual growth rate that goes with that. You can find that online with a simple Google search that can help you with that. You don’t need to pay thousands of dollars for a report.
Then, the other thing is how big it is. Here, investors want to see amounts in the billions. If it’s not over a billion, then don’t do that. You’ve got to keep looking. There has to be a bigger market. You need to think big when it comes to the market because ultimately, the market is going to justify the risk of the investment, of the investors, and it’s going to also potentially limit their own investment. Investors would prefer to invest in an average team that is executing in a massive market versus investing in an incredible team that is executing in a small market because that is ultimately going to limit the potential outcome.
On the problem slide, you’re going to essentially determine what is exactly the pain that your customers are dealing with? The more detailed, the more relatable that you can make it, maybe like that investor themselves directly have dealt with that problem – maybe their father, mother, sister, but it’s something that they had direct or indirect exposure to, which is going to make a big difference if you position it in that light.
The solution is a continuation of that. Again, honing in another time on your target customer is a really nice flow or follow-up to the problem slide, and you want to go into detail as to what you’re bringing to market.
With that being said, I would love to hear what you guys are up to. Put it on the comment section below. Hit a Like, and then also Subscribe to the video so that you don’t miss out on all the videos that we’re rolling out every week. And if you’re raising money, shoot me a note at [email protected]. We’d love to help out. Thank you so much for watching.