Investor Deck Checklist #3: Market Opportunity

Welcome to part 3 of 12 blogs on investor deck content. This one is about defining the Market Opportunity.

There’s one more thing you need to excite the investor about before getting onto the solution.

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Is there a big and obvious opportunity for the problem needing solved?

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This is arguably the most straightforward of the 12 items, so I won’t dwell on it too long. But it’s still important to get it right.

The biggest mistake people make here is they completely make up the whole thing. If it’s a genuinely category-defining and unique product, you can get away with it. Most can’t.

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You need to use third-party data somewhere here.

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There has to be a grounding in reality. Even if it’s demographic detail for consumers or the firmographic equivalent for companies. Some verifiable source with legitimacy is important.

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If there are analyst reports – Gartner, Ovum, IDC, etc – that’s the pinnacle.

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It doesn’t matter if you use TAM, SAM, SOM or some other metric to refine your target market. You have to show that there’s a large, growing and sustainable market opportunity.

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Putting £ values, not just number of customers or users, is helpful too, so that investors can imagine how a decent market share translates to revenue.

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Investors want to know that an achievable market share of just the SOM will result in a good-sized, valuable business. But there’s another thing they’re assessing.

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How do your minds work when it comes to segmentation and targeting?

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No start-up or scale-up can attack the whole of a country, let alone a region or the globe. So across what dimensions are you segmenting the market? How are you going to target your efforts?

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Story-telling and imbuing confidence in the investor are what count.

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Most new companies and new products aren’t addressing neatly defined, pre-existing markets. Arguably, investors don’t want that either, as it means market maturity and saturation. So they want to see that you’re aiming at something new.

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You’re setting the scene for differentiation and GTM

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We’ll come to these two items in future blogs. But it’s all part of the narrative thread. First, you demonstrate understanding of the totality of the present and future opportunity.

Second, you outline how you will stand out against the competition.

Thirdly, you break down how you will take your product(s) to this market.

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Don’t be afraid to keep it simple.

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Ultimately, all the investor wants from this is (a) that there’s a potential market there and (b) the confidence that you can hit the target. They can always ask for more detail, but you always need to show an understanding of the opportunity.

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