All great new companies have something in common; they were the right company, solving the right problem at the right time. For every colossal startup success, you’ll often hear, “Oh! That thing? Jenny was working on that like a decade ago.” Jenny—whoever she is—is now working on a new startup, because she failed to find traction and product/market fit for her thing.
I usually advise against a “timing” or “why now?” slide in a pitch deck. I considered not including this chapter in the book. However, the “why now” slide just won’t die—and for some companies, putting their vision into a historical context is crucial.
Skate to where the puck is going
Timing is a delicate matter because while it’s often possible to see some significant market trends converging, the question of timing is one of reading the future. In the words of Wayne Gretzky, you want to be skating to where the puck will be, not where the puck is. In other words, if you’re going to build an incredible cryptocurrency startup, you usually don’t want to be the founder that started a company the day Bitcoin hit $20,000. (As I’m writing this, BTC has been hovering at around $10k for the best part of a year). The perfect founder was already deep in the crypto world, had faith in cryptocurrencies in general, and was already building a company long before Bitcoin rallied. If you were building a crypto startup in 2010—before any of the cryptocurrencies were making it big—you probably would need to explain why you think now is the time to start your company.
Let me bring this to life with an example: when consumer-grade photography drones first started happening, the “why now” question was necessary. Yes, it’s refreshing to have a flying camera and all, but why did they arrive when they did? After all, RC planes and helicopters have been around since the 1970s. Compact video cameras (such as GoPros) have been around for a good while, too. It would have been possible to build a quadcopter for a long time (the first helicopter was a quadcopter, back in 1920), but it would have been an academic experiment. In essence, the technology required would have been prohibitively expensive for a consumer-grade piece of tech. What unlocked photography drones? The prevalence of Apple’s iPhone did.
One of my favorite questions to ask founders is “why couldn’t you have done this 5 years ago?” and “why is 5 years from now too late?” The very best companies are started because they have seen something change in the market, in the availability of technology, or a scientific breakthrough. What are the keys that unlock the startup? Your “why now” slide tells that story. Image Source: Mirko/stock.adobe.com
Why now?
“Why now” can be the question that unlocks a lot of different conversations. If you are Slack or Zoom, you can use the trend toward remote working to tell the story of your company being in the right place at the right time. If you are an Internet-of-things company, it’s an excuse to talk about the technological developments that have come before you. Any big-picture behavior change or market shifts can be woven into your narratives to help bolster your story—as shown in Figure 16-1.
The most successful startups of our era did three things: They spotted a trend early and developed a solution to take advantage of that. They rode the wave as the entire market grew; effectively, they were expanding both by increasing market share and through the fact that the whole market was developing. Slightly later in their journey, they became the poster child for that market, helping it grow further. Google, Facebook, and Apple are all good examples here; they aren’t the first search engine, social network, or smartphone/computer manufacturer. What did these companies get right? They saw an opportunity: a universe where people needed better versions of all of these products. They were able to build solutions that were better than anything else out there. Then they ended up defining the industries they entered, riding the wave to the top.
Uber is another excellent example; they started as a taxi service with an app to call a cab. Before smartphones, Uber wouldn’t have been possible. When more and more people began carrying devices with GPS and data network capabilities, a new opportunity was unlocked. Instead of having to call a taxi firm, you could press a button. Uber’s original innovation was replacing the dispatcher. Then something happened: Airbnb was starting to take off, and people started wondering what else could be part of the sharing economy. Lyft invented modern ride sharing as we know it today, and Uber took a look over its shoulder and figured they could execute better. And they did, quickly gobbling up a significant market share. But what happened to Lyft? They were left in the dust by Uber, but the company still managed to proliferate by becoming a challenger brand with a better reputation than the market leader. As I’m writing this, Uber’s market cap (i.e., the value of the company) is five times bigger than Lyft’s—but Lyft itself is worth $11bn, which is nothing to scoff at.
Reiterate your strengths
In my experience, you can use your timing narrative to reiterate some of the biggest strengths in your startup. You should explain the macro-dynamics of your space. Please explain how the market is evolving and how new technological innovations make your company possible when it wasn’t before. Remind the investors how changes in regulatory frameworks are opening new opportunities: demographic shifts (the population as a whole is aging), technology shifts (self-driving cars, solar power, electric vehicles, 5G mobile phone networks), market shifts (homeownership numbers, market boom/bust times), and significant changes in how work is done (the gig economy, working from home, remote-first companies). Many of these trends are somewhat predictable. The best startup founders know how to spot them and leverage them to their advantage.
It’s an opportunity to remind investors how your team has been in this industry for a long time. “I saw all of these shifts happen when I was a VP of investment banking at Goldman Sachs for 15 years” is a great way to remind the investors that you have both experience and in-depth domain knowledge.
The critical point here is that the “why now” is partially about history, but remember that it’s not a history lesson—it is about trends. You can use past data and innovation to draw a trend line toward the future. Combine that with what your company is doing and where it is going. The perfect “why now” slide has a fast-moving puck and a startup moving at breakneck speed to intercept it where it’s going to be in 5 years. It’s going to be a hell of a challenge, but this is the sort of thing that makes investors salivate; the world’s most significant opportunities are high-risk, high-reward movements. Think big, and weave a story of how you are on the right vector to be in the right place at the right time.