Deck Review w/The Labyrinth
Issue #3 ARWAY + Thoughts on value creation and serendipity
Much of the recent advice for maintaining productivity while sheltering in place completely ignores 50% of the way we create value. As investors, entrepreneurs, inventors and authors we create value in two major ways:
1) We create processes and structures for value creation: At the most basic level this is creating a business with a mission, vision and common goal but its also 1:1 meetings with direct reports, conducting due diligence on prospective investments, and brainstorming new solutions to big problems.
2) We create the conditions for serendipity. People often say that successful founders or investors are “lucky”. They’re half-right. Successful people are lucky in that they had a raffle ticket pay off but what people don’t see is that the successful investors and entrepreneurs have created structures that funnel raffle tickets to them. Attending countless events, walking to coffee with acquaintances, water cooler conversions with co-workers, lunches where you catch up with folks and writing industry relevant newsletters. Each of these actions creates an opportunity for serendipitous value creation that scheduled zoom calls with an agenda simply cannot replicate.
I’d argue that the official processes and structures we set up for value creation are only responsible for 25% of the value we create so how do we keep serendipitous creation alive during Covid-19? Simple… we need to keep doing what we’ve always done… intentionally create opportunities for serendipity.
Some quick suggestions:
a) Set-up 10 minute daily 1:1s with your team. Set no agenda and avoid talking about urgent but unimportant work. This creates time for people to share the burning thoughts that just occurred to them but would never be shared during a regular meeting.
b) Continue to schedule lunch catch-ups with your acquaintances. More business has gotten done and more novel ideas have been brainstormed over a shared meal than in any other context. Breaking bread with someone is powerful, don’t lose it to Covid-19
c) Find ways to continue having fun with your social network. One of my favorite new discoveries is boardgamearena.com. I’ve also found zoom happy hours to be much more enjoyable than I expected. Having something fun and casual to focus on, creates space for sharing ideas, questions and feelings that someone might be too intimidated to share in a more formal/focused setting.
Just because our bodies need to be isolated right now doesn't mean that our minds do. Get your mind out of the house and rubbing up against some other creative thinkers.
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This week we’re looking at ARWAY’s deck. ARWAY is a new method for mapping indoor environments.
Good cover slide. Google maps for the indoors basically gives me the unique value proposition up front, which is the most important thing a deck needs to convey.
Great headline. I’ve seen a dozen companies trying to crack this problem in different ways. Beacons, special cameras, drone fly throughs, etc and the fact that special hardware is needed for most or all of those cases is a huge disadvantage. I’m only 2 slides in but my interest is peaked, I know what they do and I know how they try to differentiate from competitors.
Slides like this that are the same slide as the prior one and just show some change aren’t great in decks you email but work well for in person presentations. In an email deck its a little redundant in that all the info here is implied by the prior slide.
I think I understand how the tech works based on this slide but I’m not 100% sure. Does the enterprise user just need to upload a CAD file and then the end user’s phone cameras are sufficient for localization based off the CAD file? Does the enterprise user need to conduct a camera walkthrough using their phone + the CAD file upload? I think it’s the latter but a really clear step by step here would be helpful.
The ARWAY folks do a good job of showing the key parts of their consumer facing product here.
Not sure what purpose this slide serves. It doesn’t put ARWAY in context. Was ARWAY not possible in 2018? Are you saying that it won’t hit its stride until 2022? You really need to ground this slide in why its important for you AND most importantly why it matters to investors.
I really hate this style of competitive landscape slide. Everyone just picks the features that their competitors don’t have but I guarantee every competitor could produce this exact same slide, highlighting a couple extra features they have.
The big thing these slides miss is features aren’t important to me, to most investors or to customers. Value propositions matter and while features factor into the value proposition, they’re at least one or two steps abstracted away. If you want to show me how you beat competition focus on the value proposition differences, not the features.
Blippar, one of the companies you listed as a competitor went out of business. (a) that means they aren’t your competitor anymore and (b) begs the question why did they fail and if they failed why will you succeed. This question is particularly relevant as Blippar seems to be the solution most similar to what you’re building.
Before talking about market in this deck you should talk about who your customers / prospective customers are and what the business model looks like. At this point in the narrative I know the problem and I know your solution but I don’t know who you sell to or why they buy which means I can’t evaluate the market for myself or evaluate this market slide.
You’re still not giving me the value proposition, this is re-iterating product features. The value prop I want to hear is something along the lines of “Our customers lose $60B a year because shoppers don’t locate what they need… that is $0.30 per shopper on average. Legacy systems with hardware, customization and maintenance cost $0.50 per shopper and so have seen zero adoption but our system costs $0.01 per shopper on average and has a 2 week payback period for our customers.” Obviously, I just made all of that up but that is the kernel of the story that is your true value proposition. Tell it to us.
Eliminate the first business model slide. Much of the information is duplicative with the second slide and the parts that aren’t duplicative seem too speculative. You’re early in the business and you don’t actually know how the model will evolve over the next few years, thats fine but the first business model slide makes it seem like you’re just going to throw stuff against the wall to see what sticks. The second slide at least makes clear that SAAS is the first step and then shows you have extensions in the future.
Great seeing the early traction. If any of these have converted from pilot to commercial deployment that would be critical information to include here.
Good info
Advisor slides don’t do much work for you unless one of the advisors is involved on something like a day to day or week to week level AND they are very well known. Otherwise investors just skip over them because we know how hollow most advisory relationships are.
Slides like this are tricky. You aren’t showing historical revenue (traction) just projections and when you show projections its almost impossible to get it just right. If you project too much revenue just a couple years out, people will think you’re delusional and if you don’t project enough revenue people will think the opportunity or your vision is too limited. In this case, you’re actually walking the tightrope pretty well. I’m looking at this thinking you’ll need to raise a series A in late 2021 and if you’re basically at the 2022 run rate you should be fine.
Fine investment/use of funds slide. Hits the high points and lets investors know that you’re in TechStars and that you’ve raised most of the round already.
My initial reaction is that I’m not convinced the adtech / shopping application for this is all that compelling. I know similar solutions have been around for awhile and I haven’t seen much adoption on the enterprise side or much demand from the end user side. While shopping mall shoppers aren’t the direct customers, if they don’t download the app, the enterprise customers won’t last long. Putting myself into the position of the end user its hard to imagine a scenario where I’d be willing to download the customer facing application in a shopping environment. I could be convinced I’m wrong if there were data but my gut says customers don’t want this living on their phone.
That said, I am curious as to other possible use cases. Would cities want internal maps for all facilities open to the public for first responder use? Could museums use this to build interactive tours? Would universities or large corporate campuses use this for their employees and students? Maybe.
Some Questions I have for the ARWAY team:
1) Have any of your pilots converted to commercial deployments? What are your pilot customers looking for before they deploy more broadly? What KPIs are they tracking and how are you doing against those numbers?
2) How many end users downloaded the customer facing application during your pilots and what did the conversion rate look like, if you can track that? What does the user retention look like? How do you track it?
3) How much money do you save / are you worth to your enterprise customers (the folks creating maps of their spaces)? What is the payback period for them?
4) Where have your competitors gone wrong and how are you avoiding a similar trap?
5) What are other use cases you’ve considered for your technology. Why did you decide on the initial use case you did, what was the decision process like?
6) How do you see Covid-19 impacting your business? How are you addressing this threat?
7) What sort of barriers can you build around this business? If you don’t have unique hardware and you’re building off the ecosystem won’t you be cannibalized by dozens of copycats? Is there any mechanism, technological, market or data driven that will give you a long-term competitive advantage in this business?
If you have any questions you’d like to see the ARWAY team answer, leave them in the comments and we’ll see if the team can answer them for us!