OOPs Deck Review w/The Labyrinth

Issue #2b Audlist w/slides

OOPs! Technical difficulties with last night’s send. The deck images should be attached now.

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Before digging in to this week’s deck I want to share some brief insights on the current fundraising environment.

I’ve spoken with a dozen other pre-seed through series A VCs in the last week and this is what I’ve taken away:

1. Many VCs are still actively looking to deploy capital but there a few forces which are slowing things down.

   • The pace of major pandemic and economic news is coming so quickly, there is pressure to hold off one or two weeks just to see if we’re living in a completely new reality before investing.

   • Everyone is expecting valuations to slide substantially but many founders who began their fundraising process a month or so ago launched under the old valuation paradigm. We are all holding our collective breath during this new period of private market price discovery.

   • Like many of our founders, VCs have had their lives turned upside down. Kids are being homeschooled, significant other are sharing a home office, and firms are re-jiggering processes to accommodate remote work. All of these things are slowing our ability to make decisions but the hiccup should be temporary.

2. While investors are still looking to deploy capital, albeit at a slower pace, some are busy re-working their theses for a post-Corona world. This means a couple things for founders.

   • Start thinking about how you fit into a post-Corona world and make sure you’re ready to tell that story.

   • You might have built a company for a pre-Corona world (dating app anyone?) and have been struck by the lightning of fate. If this is the case for you, do some real soul searching about whether now is the right time to be launching this business or if there is a higher use for your time.

3. Investors are thinking through their portfolio strategy given current and likely future conditions. What sort of follow-on reserves do they need? Should they reserve more than planned and if so, where do those reserves come from? In the short term this just means that deals might slow until everyone has a handle on their plan.

4. Investors are concerned that LPs (The upstream investors that give venture capitalists their money) may default on their commitments or ask for more time to make their commitments. This means that many VCs are busy shoring up their own finances and may pull back from the market or a couple weeks while they evaluate how solid their LP base is likely to be over the coming months.

5. Angels are pulling waaaay back. Many angels have had their public portfolios hit hard in the last couple weeks. These are folks who, when they invest in companies are usually selling some stock to do so. Right now they are reluctant to sell stock when the market has taken such a big hit. They’re also concerned about liquidity. Investing in early stage venture is about as illiquid as you get and individuals are rightfully worried about what the next 6 months might hold for them personally. As such they are being much more selective about any investments that lock up their capital.

Without Further ado, lets dive into Audlist, which is a company that might actually do well in a Covid-19 world.

• I LOVE this cover slide. It has a cute memorable logo, it shows me a snapshot of the product, it tells me its audio focused and the tag line lets me know that its about MY ability to create content, not just passively receive content. This slide accomplishes a ton of work without a ton of text.

• This + the cover slide lets me know that you’re (a) going to help me create audio content and (b) there is a social network element here so its not just 1:many (like a podcasting app).

• This is the quintessential “times are changing” slide. The argument is an important one to make but it would help if you graphically showed one or two stats here to back up the assertion. Anecdotally I buy the story but this is a good opportunity to show how big the audio market is becoming.

• Doesn’t add much from the prior slide. Also too much text.

• I’m not sure I buy the premise either. These devices and devices like them have been around for a number of years but it doesn’t seem like anyone has been able to make an audio based social network catch. If you’re going to argue that they all failed because these technologies weren't mature enough yet, that needs a lot more explanation. My gut tells me the failure of prior audio networks had more to do with it being a medium that doesn’t lend itself as well to casual social network engagement.

• Good product overview slide, gives a sense of what you’ve actually built.

• Too much text. You could delete all but the first bullet point under each of the 3 major categories. That is enough info to tell your story in the deck and land an initial meeting.

• Ugg, I generally hate these competition slides. They don’t convey much useful information since everyone just picks the features they want to highlight and the competition they can beat on those features. There is some value to a slide like this if you just want to show all of your granular features but it belongs in an appendix not in the middle of your narrative.

• The better way to address competition is to include a slide that tells me why people are clamoring to use you for communication. It isn’t because of any of the features above. What is the hole you are uniquely filling in someone’s life?

• Team slide is fine. Would be good to include anything that demonstrates audio is important to you. Not critical in the deck though.

• For an intro deck I’d either delete all the details here and just leave the first paragraph or move it to the appendix. Too much text and an investor will just skip the slide. Your mission and why you started the business are an absolutely critical piece of your story but its more well suited to the intro conversation then the deck unless its super clear and succinct.

• The axes on the chart are almost impossible to read, boost the contrast.

• Do the numbers on the left hand side represent individual WAUs or 100s or 1000s of DAUs? If its individuals, which I suspect it is, the graph isn’t that powerful. I can’t extrapolate much meaning from a jump from 30-50 WAUs over a 3 week period. Its just not enough to show broad interest or retention. At this scale the users could all be your friends. Instead I’d pick another couple impressive headline stats. Maybe hours spent per active user creating content or listing to content or retention or viral factor, or something similar

• Important slide because we all know how insanely difficult it is to break through the noise these days with a consumer app, especially in social. Unfortunately, this slide is completely generic. It could be that it’s generic because Audlist hasn’t started growing yet but these are all things that almost any consumer facing startup could do. I think the company needs to get a little more creative/strategic about how they are going to break through the noise.

• I would pull this slide unless Audlist can come up with some very specific tactics and/or results.

• I’d delete the first two bullets of this slide. Global advertising spend isn’t really relevant to your company, it just wastes space and time to include it.

• Podcasting TAM is the most relevant but it isn’t huge. It would be good to show focus on Podcasting TAM and show how its changing over time or show how you can expand beyond advertising revenue.

• Companies that need to massively scale before generating any revenues are out of favor these days, likely more so after Covid-19. This may be the only monetization strategy that makes sense but just recognize its going to be a much tougher sell in this environment.

• Also, advertising as an industry isn’t going anywhere anytime soon but I am skeptical that the industry will show much growth in the next decade. There is a magma chamber of suspicion growing underneath the attention/personal information based economy and I’d be worried about relying on it for a company just getting started today.

• Pull this slide. Exit strategy slides have gone out of favor with many investors. Its waaaay to early to be considering your exit at this stage, too much will happen over the next couple years.

• Additionally, you don’t really need to include an exit slide like this given that we all know what the options are. The caveat here is if you are a late stage company closer to exit and you want to include a slide with recent comparable acquisitions with exit multiples, it can help show evidence of M&A interest in the space and likely exit multiple. Even then probably better to just let the investor do their own research while you keep your narrative about building a big business and not selling a business.

• Great, covers all the main points re: the fundraise.

Overall, I think the Audlist team did an ok job. They’ve avoided any glaring mistakes and produced a deck that is visually appealing but it does feel a bit hollow. They could do a better job of explaining why someone would choose to spend their time on Audlist. It isn’t clear to me that there is a burning unmet need they are addressing or that the product is so amazing they’re seeing explosive organic growth. Absent one of those 2 things its hard to get excited about the opportunity.

If you have some comments or thoughts for me or the Audlist team please share them.

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