OK, so you’ve given your Company Overview (Slide 1) and established your Value Proposition (Slides 2 to 4). Now you need to convince investors that you can break into the market, grow and retain market share, and have suifficent entry barriers not to get overrun by a slew of copycats.
Slide 5: Secret Sauce/Intellectual Property
Depending on your solution, you might need a separate slide to convince investors that no one else can easily duplicate or surpass your solution (assuming that’s actually true.) If you are in a business sector in which intellectual property is important, this is where you drill down into your secret sauce and proprietary technology. Boil this down to simple elements so that the man on the street can understand it.
Slide 6: Competitive Advantage
Okay, so how are you better than everyone else, including the status quo? Most entrepreneurs misunderstand the critical objective of this slide, which is not to simply bash the competition (as much fun as that may be.) Your key objective is to convince the investor that lots of people will buy your product or service, even though they have several alternatives (one of which may be to do nothing), for very good reasons.
The best way to convince an investor is to provide customers or prospects who will articulate why they bought or will buy your offering. Use this slide to summarize the three or four key reasons why customers prefer your solution to other solutions and to the status quo. This is often done as a “check the box matrix”. Just make sure your check-box criteria reflect the market’s requirements, not just your product’s features.
Check out the first segment of an interview with Warren Buffett, in which he uses the analogy of a “Moat around a Castle” to describe Competitive Advantage:
