Planning for Higher Sustainable Competitive Advantage (SCA)
I find that pitch decks to investors fail to articulate how they will maintain a market lead and build barriers to entry around their business over time, as more competitors emerge. We teach 17 ways to increase SCA at The CEO Boot Camp and in our scaling consulting work.
I would recommend adding two additional slides to the standard 10-12 most have in their decks. This will impress investors far more than some fancy graphics or massive TAM market claims. Slides to add:
- Sustainable Competitive Advantage (SCA) – How will you evolve your barriers to entry over time. The “Moat” which can create higher PE ratios. Product roadmap and innovation? IP? Brand? Partnerships? etc.
- Market entry strategy, which is not the same as Go to Market strategy. This shows expanding markets, niches and the $1B market opportunity – which NO startup should ever enter initially because then they are competing with giants on day #1. A slow suicide strategy.
These two additional slides will show you have done your homework and understand competition will follow in the 5–6 years until an exit may be possible or likely. It still revolved around your hedgehog concept but shows how you will maintain a market lead, and hence a higher PE multiple and exit value for your investors.
The attached slide shows the 88 niches where this product could enter the market, but a startup MUST HAVE an exclusive, zero competition, market that is very focused. Each red oval is an added market niche, then larger vertical or channel, as the company builds in infrastructure, proves its product is robust and can procure larger capital, staff and brand power. Think Tesla’s Roadster, then Model S, then Model 3. Each was a much larger market, allowing the foundational technologies, manufacturing and more mature team to go after larger markets. Top investors think this way.
Want to 2X, 3X or more your valuation? Join me for a free workshop on creating more Sustainable Competitive Advantage at our monthly webinar for growth companies that want to hit $10M, $100M or even $1B in sales eventually.
Bob Norton is a long-time Serial Entrepreneur, CEO and investor who founded six companies with four exits that returned over $1 billion to investors for a 25X ROI. Two others are still in development. He has trained, consulted and advised thousands of Entrepreneurs, CEOs and boards since 2002. Mr. Norton works with companies to 2X to 10X growth rates and valuation using AirTight Management™, the world’s most comprehensive Leadership Operating System. He also helps companies raise capital to fund growth. He is also the Founder of The CEO Boot Camp™ and Entrepreneurship University™ for early-stage companies that have not reached product-market fit and $1M ARR.
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