January 29, 2022

Incubator Light: Week 3

What type of founder are you?

"How many millionaires do you know who have become wealthy by investing in savings accounts? I rest my case." — Robert G. Allen

This week, during the Incubator Light Program, we focused on the Growth Model for founders and how to break the process into segments suitable for a pitch deck that will make the most sense to investors.

The growth model is made out of three overlapping segments, User Experience, Marketing, and Product. We often see circumstances within the blockchain industry where Product or Tech takes priority, but it is still important for investors to see how you have considered the other two factors. They are ultimately still essential for processing returns.

When it comes to customer development, understanding the market environment will give a greater insight into what causes a problem for your customers. This will enable you to provide accurate solutions for the right target audience.

During this section we discussed what problem does your product fix, is it the new Netflix to the old Blockbuster or are you really cutting edge with completely new development. If your project represents the latter, it is important to have a timeline demonstrating your development roadmap, demonstrating that you have considered future implications and competitive development within your project's market fit.

To understand customer problems, we need to put ourselves in the perspective of our audience and look at the difficulties they face. From here, we can identify what it is that our business can provide as a solution. This process helps us to not be so attached to our solution or product and helps us focus on the customer's requirements.

The go-to-market strategy combines the previous exercises, enabling founders to identify how you will acquire customers. From Product strategy to Channel Marketing to Growth Marketing, the cascading and evolutionary nature of market strategy enables founders to deliberately and efficiently structure the financial model.

The goal of your financial model is to show the roadmap of how you will achieve your projected annual revenue. This takes into consideration all expense and development strategies. For investors, this section of your Pitch Deck is one of the most critical. It shows you have a structured path forward to achieve your proposition with diligence. Investors often focus on Costs, Revenue, Rates and KPI.

In the blockchain environment, we frequently utilize tokenomics with complicated structures to revenue. Not all investors will be as tech-savvy as yourself, and it is important to be able to explain the complicated process in the most simple way. Breaking down your revenue process into steps that are easily digestible will help portray your model. Essentially demonstrating at which point of the journey your revenue will come from and what costs or requirements are needed to achieve that revenue.

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One of the key takeaways from this week's session was that your pitch deck is an individual development and can be structured in a way that suits your business model best, while still containing the essential components that an investor wants to see in able for them to make a calculated investment.

How does your business minimize financial risk for the investors?

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