In this blog, I will walk through Twitch’s Series B pitch deck. It took us over a year to solidify funding. There were many factors that went into why it took over a year, but one critical piece was that we were missing a sharp and concise pitch deck with a well-narrated, compelling story.
Below I will point out what we did and did not do well and how to improve upon our oversights. If you’re in a rush or want to reference this later, you can also download the entire deck and commentary.
Tip to the reader: Something worth noting before diving in. If you can help it, you should avoid emailing pitch decks. Unfortunately, many investors will ask you to do this, and your deck has to work without you there. As you build your deck, make sure the slides can speak for themselves. As you go through this deck, you’ll see we didn’t keep that in mind.
Slide 2 (skipping the title slide)
This slide dove right into what Twitch is and what our gamers do on our platform before ever explaining to investors the state of the gaming industry and why gaming-related content was a big, viable market to invest in.
The biggest miss here, and one I’ve seen in numerous pitches as an investor is that people assume that the investors are educated in their industry.
First, answer WHY. Why is gaming a notable trend? Why should they care about it?
Do not assume that investors know anything about your industry, product, or customer base. Explain it to them. The storyline you should tell is simple:
- The world is a certain way. What is the problem you are solving? How did you get exposure to it and why are you an expert? Why is it a big and important problem to solve?
- Something changes. What is your solution? Why is now the time to do it?
- The world is a new way. How does the company (and therefore the investors) benefit from bringing this solution to market?
Takeaway: Build your narrative before diving in and creating a deck. Nail the story and then slides will come naturally.
Once you’ve explained why investors should care, then lay out how you’re solving it differently.
This is where you should explain your mission statement and why it hasn’t yet been accomplished by others. And then, address how you plan to put that mission statement into action. Be sure to cover in more detail:
- The problem
- The scope of problem
- Why now
- The solution
- Traction (if any)
If your vision and story are well explained, you should not have to demo your product (though you might want to).
Takeaway: Know your mission and state it up front. Then back it up with an action plan.
Press or media exposure doesn’t mean anything about success. Media will cover just about anything once or twice.
What really matters are engagement numbers and the stickiness of your customer base to your product (we will go into this further below).
What we were missing here is how Twitch has changed the gaming experience. And why people come back to the platform over and over. More on these engagement metrics coming below.
Takeaway: Don’t lean on the press or media for validation that your company is successful. If you have notable press you’re proud of, first lead with your tangible metrics, then follow with 3rd party validation.
This is where the narrative and deck should have started – to explain why gaming matters. Also, this slide isn’t bad, but it shows only a piece of the story.
Keep in mind that you should tell a well-rounded story. For example, we highlighted YouTube’s success with gaming – although it shows the demand in gaming content, it doesn’t then explain why a new platform is needed or where Twitch stands in this industry demand.
The key here would have been showing Twitch’s impact on this industry. And even a zoomed out view of the larger picture. For example, by that time, video games were actually more popular than movies and TV! This is a big piece of the narrative that we missed and a huge validation of the demand for Twitch.
Takeaway: Take a step back and set the context. Illustrate how your industry compares to similar industries to show your opportunity as well as where you stand within the industry.
Here are where engagement metrics come into play as we mentioned briefly on slide 4 but let’s go more in depth.
This metric is good – it showed that the usage was growing and we had traction. But it would have been much more interesting and convincing to show deeper and more holistic engagement metrics such as:
- Viewer and broadcaster retention
- Session length
- Viewer engagement (how many people were chatting on Twitch)
- Broadcast engagement (how much are broadcasters streaming on Twitch)
- How many people were making a full time living broadcasting
Takeaway: Don’t show mediocre metrics. Only show the most impactful metrics – metrics that show how sticky your product is.
This last metric on the previous slide is a huge miss from our storytelling perceptive.
Just like Airbnb or Uber has become a way of income and newfound flexible careers today, Twitch was that long before Airbnb or Uber.
We had gamers making a living off creating content and streaming on Twitch. People were able to monetize their hobby into a career or side gig. Because of this, the speed at which live streaming videos grew was phenomenal. This turned the industry upside-down. We were developing something much more than ESPN for gaming but didn’t articulate that well.
Takeaway: Don’t try to fit yourself into a category to draw comparisons. Instead, show why and how you’re disrupting the current state of the industry.
This slide worked well. It showed investors where revenue was coming from. But if it had been packaged with the larger picture and deeper metrics we listed above, it could have told a more powerful story.
It’s also missing context. We had 3 audiences – advertisers, consumers of the video content, and creators of the video content. This is a differentiator. It would have been great to paint that picture which (1) highlights how we were approaching the industry differently and (2) which of the three audiences we were investing in to maximize revenue.
Takeaway: Explain your audience and revenue streams before showing revenue numbers. Also then follow it up by showing future plans to grow these numbers.
This slide should not just show but explain why we were better than our competition.
The unique thing about Twitch was that we had built our own owned and operated (O&O) infrastructure for streaming. This allowed us to have a significantly lower cost basis than other competitors at the time (like Own3d), enabling us to have a higher rev share with broadcasters (and thus we were able to pull more talent to our platform over time). Here we should have explained further why that was important.
Takeaway: Just like you shouldn’t assume your investors know your industry, you can’t assume they know your competitive landscape. Spell out why your competitors are not a threat.
This metric is fine but weaker than other metrics we could have shown. What it’s showing is growth but not stickiness of our platform (returning visitors, increase in length of time spent, etc.).
You should carefully choose the metrics you show. You do not need to show every half-decent metric but instead, choose the most impactful metrics based on your mission and goals. Avoid death by metrics – you can lose your story with an overload of numbers.
This metric should probably have been bundled with slide 6. Consider if splitting up your metrics across your presentation makes sense. Based on your narrative, you may dilute your story by separating your metrics.
Takeaway: Consider which metrics are the best to show and how to slot them within the broader story.
Here we should have explained why Twitch ultimately would win over YouTube – and what was actually different about our product.
We argued that much of the gaming VOD content would be created as cut down clips from live streams. So if you owned the broadcaster at the live stream, eventually you could get all the VODs (and we could displace Youtube as the place where viewers found gaming VODs).
Of course, in 2019 that hasn’t played out yet :)… but the point is that if we were telling this story, we should have explained it in more detail because by looking at this slide you would never really get all of that.
Takeaway: Don’t assume investors can understand strategy from a graphic!
Similar to the point about partners on slide 11, why should investors care about the platforms Twitch can run on?
What we missed here was explaining what additional growth or added exposure these platforms gave us.
And this slide should in no way have been the end of the pitch. These last two slides should have been part of the earlier pitch on why Twitch is going to outpace existing platforms.
Instead, we should have ended the pitch with the long-term vision and how we would accomplish the mission.
Takeaway: This is your final chance. Layout your long-term vision and growth strategy. Give the investors an opportunity to get excited about where the company is going and why they want to become a part of it.
I hope this was helpful. I welcome your thoughts in the comments below. And if you’d like to reference this deck and its commentary at a later date, you can also download it.