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Jon Bradshaw & Peter Harris

VC rips apart a pitch deck for a very open and honest review. Peter Harris from the University Growth Fund reviews the pitch deck for In this episode learn what a later-stage VC actually thinks about a pitchdeck.

VC Rips Apart My Pitch Deck for

VC rips apart a pitch deck for a very open and honest review.
Peter Harris from the University Growth Fund reviews the pitch deck for
In this episode learn what a later-stage VC actually thinks about a pitchdeck.

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Episode Transcript

Jon: Peter says.
Peter: I'm hoping my only pushback on that was that I was trying to tell you how I was thinking, and you kept interrupting me and telling me how I was wrong.
Jon: Well, no, it was that you wrong. It's that you hadn't met this last person.
Peter: So I was like, No, you like you're like, you're wrong because you don't know. You don't have all the context. And I started out I was.
Jon: Like, You're right.
Peter: I don't have the context. All right, All right.
Jon: I was a little mean on Peter on the last podcast, by the way. This is the Venture capital podcast, where you learn all about venture capital and how to get your own business funded. This is where this is where Peter takes, you know, peeled back the curtain So you can see this is actually what a venture capitalist actually thinks, which is very, very rare because the only people I know in angel investing or venture investing that say what they actually think end up walking away with a really bad reputation.
Peter: And so I'm here to ruin my reputation for your entertainment?
Jon: No, to learn. This is learning. This is not investment advice. This is not legal advice and not quick time. So we can do a screen shares. You can see what Peter's looking at on my computer. So anyways, my background is I own code because I've got another business appointment dot com and we've put a pitch deck together for it and we have tested it on multiple voices, which I don't know if you think that's a good idea, better idea.
Jon: Basically I look at VCs as a litmus test potentially for where the big opportunities. So you went to a few different investment groups and pitched them completely different pitch decks to see how would they respond.
Peter: Okay.
Jon: Because I wanted the confidence is if this is the pitch deck, we run with an AI and we take 100 meetings for, I want to feel confident and and like know what they're going to ask, be prepared for them, things like that makes sense. Yeah. Peter Harriss from University Growth Fund is going to rate my pitch deck for appointment dot com.
Peter: Thumbs up, thumbs down. What's it going to be.
Jon: Now you need to forget everything else you've forgotten. So basically what you're looking on the screen is we've got three things maybe that change. One of the thing we put like a quick one minute video that we put together for Y Combinator. Yeah, we created a very loose because again, this is like pre-seed pre revenue pitch deck what the service revenue would look like.
Jon: And then we put our pitch deck together. If I were to add anything else, I might put a page or two of the founding team. See, this is who we are. But first off, what's your gut reaction for the and I call it a deal row.
Peter: It's a little thin, but I.
Jon: Mean, what else would you like to.
Peter: See? I mean, for this date, like for this stage of the company, I think like a product demo.
Jon: Okay, good. Product demo doesn't.
Peter: Exist. You don't have a product, so it can't get a product demo.
Jon: So there's that.
Peter: But you could build something in like figma or something and have like a little bit, but maybe that's what your appointment one minute video is. I don't know.
Jon: You just keep talking. Just do your gut reaction and then I can answer any questions you have. Why we do work out.
Peter: I would also like So this is revenue estimate. I'd like to know cost estimate. So like know full fledged projection budget I think would be really helpful to even like.
Jon: Even in a pre revenue deal.
Peter: Yeah. Because you're gonna have a lot of cost.
Jon: By the way, one of your interns said this was good enough. So you know who I'm talking about.
Peter: Is it good enough? Sure, it's good enough. You want you want something better? I'm giving you what I would want. That's better.
Jon: Okay, so we've got we've got both. But in here, it's just here's a high level.
Peter: Overview of like, I'm just saying, like, other things that would be interesting to see, right? So some other things that would be interesting would be a budget that says, like, this is what it's going to cost us to build. This is how long it's going to take. This is when we can start generating revenue. Like just so I have a rough idea of like, okay, what what am I getting myself into?
Peter: What am I funding here? I think another thing that would be super interesting is if you had anything around customer validation. So know you haven't built a product yet, but you can do a lot of product validation and customer verification validation before you ever launch a product, right? So that could be like preorders customers like talking about how much they really want this product and they just can't wait until it gets launched.
Peter: Some sort of like indication that like that opportunity exists. Maybe you have it in your paycheck. I don't know. That could be helpful. Yeah. Resumes on the team or some other. Like that's one thing I've been to write up or indication of like who am I backing.
Jon: In the pitch deck? We have a one page on who who's who's involved from a high level.
Peter: Yeah, well, you may want to have something that's actually more detailed. Okay. Because I know you write, but I don't know your co-founder as well. Right. And if I've got to go off of is like some pictures and like a little bio on a deck, like, I don't know, that doesn't give me a ton of confidence references.
Peter: It could also be, like, really helpful.
Jon: Yeah. Look what those references look like. Just be like one pagers from.
Peter: So it could be either like a reference letter or it could just be contact info that says, Hey, go contact my former employer or whatever. Right.
Jon: Okay. And would you typically see something like this in Google Drive or would you would are you more accustomed to using something like Doc send?
Peter: I yeah, I've used them all.
Jon: So you have a preference as a VC? Do VCs have a preference?
Peter: It's a good question. Personally, I do not love all like the virtual data rooms that are out there because like I've got to manage like a zillion passwords and I don't know, they're kind of a pain because they do like two factor authentication and they like half the time they're restricting what I can and can't download and it's just a pain.
Peter: I think Google drives great. I think Google Google Drive is great. I think Dropbox is great. I think Box is great. I think Card is great, like whatever. But from my perspective, like, you know, having a handful of things most important at this point, at this point is probably, in my opinion, your deck and your budget and then making it like super accessible so I can download stuff and manipulate it the way I want to, Right?
Jon: Yeah. So, so far you're saying to somebody, the first part is Google Drive was fine. You would have liked to seen resumes and or references and you would have liked to seen some type of a cost exercise to say this is when you're going to start making money.
Peter: Yeah. And what it's going to cost you to build the thing. Right.
Jon: Okay.
Peter: So because you're going to raise money because you need to cover costs. Okay. To build it.
Jon: By the way, if you are listening to the podcast, this is definitely an episode where you'll want to check us out on YouTube. So just go to venture capital out and click on the YouTube link right there on the home page, and then you can come and find this episode.
Peter: But all of that said, My intern is right, this is good enough. Honestly, just having your pitch deck at this stage of the company where it's pre product is probably good enough.
Jon: So I think a lot of it this day is still is more on reputation and if you're looking if we were to raise right now it would be probably more of a C deal especially in this in this market it would be much more.
Peter: Going to be a pricey deal because you're very product So and it's really going to be based on like do I like John and his co founder and do I believe that, like, this market is big? Right.
Jon: Correct. One of the things we did I want to show you the video is with my co-founder. We got a video professionally done. Yeah. How do you think that's over the top or do you think it should just be Hey, here's me on my iPhone. Here's our one minute summary, and this is why we're going to crush it.
Peter: I don't think videos are super necessary, honestly.
Jon: Okay, we did it.
Peter: If you're going to do a video, then do it. Well, okay. I don't know that you have to spend ten grand.
Jon: Or we definitely not spend ten grand, But like, much, much less.
Peter: But like, yeah, I mean, having like, good equipment.
Jon: And, and maybe some background is just for you again watching go to venture capital firm and appointment was an existing business we acquired. So in fact one of the interesting things is when we pitched y'see that was one thing that appeared to throw them off. Why are you starting with such an expensive domain name? What's the history of the business here?
Jon: Hey, this looks more like a private equity deal. Yeah, than anything else. What are your thoughts on that?
Peter: I mean, my honest opinion is that I.
Jon: Want your dishonest opinion. Peter, let's just be clear. I want to feel good. I want you to tell me I'm a winner.
Peter: You are a winner. And they were wrong to reject you, and they will rue the day.
Jon: No, I was hesitant for pitching them in the first place because.
Peter: I think you should a craft that I think you should have craft the story a little bit better.
Jon: Okay.
Peter: And anticipated like, hey, yeah, I bought this expensive domain, but here's why and here's how it fits and blah, blah.
Jon: Blah SEO, things like that. Yeah, I think they walked away saying, Hey, we understood that. We understand the reasons why you bought it, that there's 14 years of existing history. It's going to be so much easier to ring for the terms that you want to ring for. Yeah, we recognize the branding perspective. I think one of the things that I would congratulate Y Combinator on is that unlike other VCs that I know personally, they actually came back and I think they said what they actually believed in a very lengthy email, Hey, we're passing for these, but.
Peter: You shared that email with me and I agree. I thought like email was phenomenal. I thought it was one of the best like rejection emails from a VC I've ever seen. So kudos to Y Combinator for that. Now granted they get to say no more than most VCs do, but.
Jon: They're interviewing thousands of company. I know, like when we did our presser.
Peter: That they actually like take the time to do it right.
Jon: There was only two spots left when we got in because I applied a month late because I'm like, Do I apply? Do I not apply Jared Rodman from WEAVE who went through there? Yeah. Said it was a huge turning point for them. It's like you should do it. I'm like, I don't know. Don't think it made it slightly more because it's an expensive deal.
Jon: 7%.
Peter: Yeah.
Jon: 430 K It's super expensive. Yeah.
Peter: But you get a lot more than a hundred K but.
Jon: Now they have like they have 400 companies that go to their portfolio. So it's not like originally when there were just ten companies and you're meeting with like the CMO from Twitter and they're bringing people and you're getting like.
Peter: Really there's still is a decent amount of cachet though. That's helpful.
Jon: I don't know. The other interesting thing is some of my VC friends love it and then some very pooh pooh it.
Peter: Yeah, but even the VCs that like pooh pooh it, like they're never going to look at it as a negative.
Jon: Never. How are you going to do Y Combinator? This is a no, you suck.
Peter: Yeah, They're going to be like, they're going to be like, Well, I hope he's not entitled. Really?
Jon: Like, like if I were to look at now, having gone through the process, I know we're going down a tangent. If I was a VC and someone said they got into Y Combinator, I'd say, You got through a seven minute interview.
Peter: Yeah, but like.
Jon: It was the quickest decision process for half a million dollars I've ever seen in my entire life. I've never met you. You've got a recommendation. They'd even ask the questions I thought they would ask.
Peter: Yeah, but I think they do have a pretty clear criteria. I mean, they're investing so early, like you were pre product, right? So like, honestly, what do they have to go off of?
Jon: I mean, that could have been but then, but.
Peter: The things that they liked and they mentioned this in the email right. Is like business plus technical co-founders that have worked together. Right. They loved that big market opportunity. Right. They loved that like there was a lot that they liked, Right. And there were just enough like little things that they said,
Jon: You're not one of our 400. Not one.
Peter: 100 yet.
Jon: All right. What do you want to see next? What would you click on next as a VC?
Peter: I'd add 100%. Just open up the pitch stack.
Jon: Okay. And I'm going to go full screen. So just so you know, there will be a couple of things in this that for confidentiality reasons, we're going to hide, but we'll talk about them as much as we can. Cool slideshow. Full screen.
Peter: Full send.
Jon: Okay. How's my title slide?
Peter: It's fine.
Jon: What? What should change, if anything? So I have like a unicorn galloping across as an as an emotion.
Peter: 100%.
Jon: There actually isn't a unicorn that my co-founder put in in the financials, and this is kind of weird, but I'm leaving it.
Peter: That's what I think is fine. Look, I don't I'm not going to spend a ton of time on the cover side.
Jon: Should it have like a tagline on the cover slide?
Peter: Yeah, you could put one on if you want. Give me like start subconsciously, like driving me towards some sort of vision of the future that you, you're striving towards. Right.
Jon: Okay. Before we go any deeper.
Peter: I mean, look, I look at this and I don't know what it is like appointment and it looks like kind of like a cowardly competitor. Like, okay, okay, like, let's see. But I mean, I'll tell you, like, based on that, I'm already a little bit disinterested because I'm kind of like, Yeah, like this place, that space is a little bit crowded, but I'm curious to see what their what their unique thing is so interesting.
Jon: Interesting because also, like this image is from our first pitch and the first pitch when we went to the first to a private investor and then a VC was we were going to be a cowardly killer.
Peter: Yeah.
Jon: And the feedback that we got from Trek model, I think I can say this. I'll ask him, which I thought was pretty good, and he said, Hey, you know, cowardly, having been around for as long as they are, has probably a huge market share. Definitely like everyone, you know, it's a very common tool. Someone's going to use that tool.
Jon: And he's like, I can't imagine how you could make anything better. And brand alone is not enough in his opinion.
Peter: Like owning appointment dot com is not enough to write.
Jon: His feedback and I hope he's fine. We'll check with him. We can share. But I thought I respected him for that great feedback I thought and and again if you're ABC you want a clear Billion-Dollar exit and if cowardly perhaps has 50% of the market, they're worth three or 4 billion. How can someone else come in and usurp them?
Jon: And our pitch definitely did not show that story. Yeah, and even if you do win, if you're a VC right now, you're looking for a company that can sell if you're Andresen. I talk to my friends at Audrey's and they're like, John, if this isn't a $20 billion plus opportunity, we're not interested. Funds these days are 20 billion.
Jon: Yep. So it's true. One of the slides show that we this is how we get to a billion is tricky. Here's here's the hard part where either we're pitching people and they're either saying the product isn't technical enough to get you to a billion plus or it's too big. It's too big, and there's no way you can make this happen.
Jon: Or they said it was too small or it's like you're not you're not going big enough. And I'm like, I'm like, I don't know how to, like, juggle this one or they're too technical or not technical enough or too big or product or it's not a big enough market vision. So I think we can go there. But so I think we got feedback.
Jon: Any other feedback here?
Peter: No. Do you like I do agree with Trent and everything he said.
Jon: And that's partly we also made a pivot because we're like, what do we sees? What are they thinking about when they're looking at this professionally?
Peter: Here's the other thing, though, John.
Jon: Okay?
Peter: These are not that like smart, smart.
Jon: RE Is that what you're going to say? Yeah, I think VCs are smart because they have a ton of smart friends.
Peter: I mean, I think VCs are smart to the extent that they see a lot of things.
Jon: I think you're definitely smart, so don't.
Peter: And so, you.
Jon: Know, call you ugly. Beta.
Peter: It's okay. You can call me ugly. But I guess what I'm saying is like, I want the entrepreneur to educate me, okay? Like, I want I expect the entrepreneur to know more about what they're doing than I do. That. That makes sense. Okay. And I wonder if some of the feedback you were getting was like, Hey, we're going to build a cowardly competitor, and then you like, walk through like how?
Peter: And the VC was like, I'm not sure I agree with that. And you're not providing enough information to me to convince me that I'm wrong. Okay, Does that make sense? So I don't know if that's helpful or not, but like, I don't know, I approach these things as like, I I'm here to learn from the entrepreneur. I can like, pattern recognize a little bit, and I can see some things that have worked for others.
Peter: And I can I can assess what risks I'm willing to take. But at the end of the day, like the deals that get me the most excited are the ones where the entrepreneur has earned like that secret, right? That secret knowledge of like what is going to make something.
Jon: You've talked about a lot. The other thing that.
Peter: Sorry.
Jon: That I noticed you talk a lot that you've talked about a lot. The hard part, I think I found for it too, when you first start pitching.
Peter: Yeah.
Jon: I've been in the space in the scheduling space for like four years. Yeah. And so when you're a technical person, you start thinking, Technically, yeah, you think it. You think of things differently than I thought, like a VC would.
Peter: Yeah.
Jon: So how I were to do this again, I, I was like, Man, I've been here for four years. I know this. I should have realized that talking to people who don't know my space is going to be a very different thing. And I probably should have done 20 plus pitches to smart people who don't know my space and my pitch to album or to Tren probably would have been much different.
Jon: Yeah, and that's where my overconfidence and being the technician, I think I definitely fumbled.
Peter: Yeah, fair enough. Yeah. I mean, sometimes it is hard, right? Like you can't see the forest for the trees, right?
Jon: Or then the question is, how do you explain it to someone? Cause sometimes I feel like VCs ask really dumb questions and I'm like, my gosh, I don't know how to answer. You're so stupid, so stupid, But it's not like you're in the trenches. I'm like, we've built another company in this space. We have this experience.
Jon: How do I take four years and put it in one sentence? So the VC is like, is that fair?
Peter: Yeah. I think the bigger challenge is sometimes VCs are a little arrogant, right? And they're they're not willing to admit that they're actually not that smart.
Jon: I think the biggest question I fumbled with album is they said, Hey, if we give you 2.5 million, where do we get you? And I definitely fumbled that question. Yeah, because honestly, I don't know. And even though we've been in the space, this is.
Peter: The site, you should have had an answer for.
Jon: That. I should have had an answer. But it's one of those things how I talk to people who fundraised like had I gone to like 20 friends who've raised more than $2 million, they someone there would have asked that question.
Peter: Yeah.
Jon: And then I would have been prepared for it. Not been like, well, I only raised 500 K and now they're worth 4 billion. So if we raise 2.5.
Peter: But again, this is where like I'd love to see a budget because if you had like put together a budget, you could have answered that question really easily, right? I'd be like, okay, well, it's like it's going to cost us half a million dollars to build the product, and then we're going to spend, you know, $1,000,000 on marketing.
Peter: And then I'm going to hire like these many like sales reps and blah, blah, blah. I don't know. Right?
Jon: Yep. And no one talks about how even though you're in the space, like creating a pitch deck and creating a very succinct message and a test and having to send messages for all those random questions that will come. Yeah, this isn't an immense amount of work, even though I've been in the space for a long time.
Peter: Sure.
Jon: Sure. So here's we created a vision slide. We created what did we do?
Peter: We were open table for business services. Is this still vision? Okay.
Jon: I think this is what we've seen all along. But the question is there, like, John, this is a small company, and then we're like, how do we explain it? Like the way we see it is scheduling is much more than just a link. And right now most services are there.
Peter: Okay. So I actually don't like I don't I don't love this like vision side because I don't I think the feedback you're getting is I don't think people understand or feel the pain point here. I think what would be more effective here is educate me on what the pain point is. Yeah, right. So I don't know, like pick one of these things like and tell me why there needs to be an open table for education for appointments.
Jon: Okay. Good to go now. Sure. Okay. Go with medicine instead.
Peter: Go in medicine. I don't care.
Jon: But this week I needed a schedule, a physical therapy appointment for my wife. I can't do it online. I had to call multiple times. I'm on hold for ten, 20 plus minutes. Yeah. If I could log into a HIPA compliant site and I knew exactly where to go to find the person and I could see my. My, my reservation, my appointment.
Jon: Yep, I could. I could have rescheduled. I would have saved the doctor's office money.
Peter: Yeah.
Jon: As well. Okay. I would have saved 20 or 30 minutes probably this week alone because I had there was a doctor's visit and there was.
Peter: Okay, are you going to pay for the service or is the doctor going to pay for the service?
Jon: The doctor?
Peter: The doctor. Okay. So like, no offense, but I really don't actually care about your pain point then.
Jon: Okay.
Peter: What is the doctor's pain point?
Jon: Customers.
Peter: What do you mean, customers?
Jon: Okay, so.
Peter: They want more customers. Are they? They're tired of dealing with customers like John that call them up and like, Hey, I got a cancer, I got to reschedule.
Jon: Here's my hypothesis. Yeah. No matter what's scheduling tool, a doctor or an attorney or a spouse currently using. Yeah. If a new service comes online that can give them clients and has a brand that people are going to to schedule all their appointments, it's going to get critical mass. More and more people are going to schedule their it's going to be easier to schedule their and they're going to lose clients.
Jon: Whereas if they flip to appointment again, big vision, that's why they'll switch.
Peter: Here's a question How much does OpenTable actually drive revenue to restaurants versus restaurants driving revenue to open table?
Jon: So I don't have great question.
Peter: I don't know because my understanding with OpenTable is that basically what they did is they built software that allowed restaurants to manage the tables and the waiters and waitresses that were managing those tables. And then the advantage of that was that because they knew how many tables were out there and who is working and who is covering those tables at any given time, then they could match that with like, hey, there is an open table here.
Peter: And if you want to make a reservation and you can you can find out about that and make your reservation book that table. But like I don't know anybody that goes to open table hunting for restaurant opportunities when I interact with open Table, it's more like I'm going to Yelp, I'm going to their website or whatever, and there's an open table link that they use to manage their reservations.
Jon: Right? So let me ask you another question.
Peter: So it's like the value add driving customers or is the value add like helping them manage their schedules?
Jon: I can get there. And to another point in the slide.
Peter: Okay.
Jon: But I think I think the point there's two aspects I see. This is we're first and foremost solving the pain point of someone who wants to schedule in 2022 if I want to. If the last four massages we've scheduled as a couple, I've had to call in.
Peter: Yeah.
Jon: The.
Peter: But why is that? Because there's a zillion like calendaring scheduling apps for specifically built for the lodge therapist.
Jon: So when there was an amazing podcast from the founder of acuity scheduling and he said acuity was losing in that a superior scheduling tool as an acuity would lose to an inferior scheduling tool that was bundled with an existing workflow.
Peter: Yeah, that makes sense.
Jon: And that's why he's like, Hey, we're losing. And that may have been partly what encouraged him to sell to Squarespace, and that Squarespace could create a really cheap tool.
Peter: They could basically take acuity and plug it in to their existing workflow. Okay. But that still doesn't answer the question. Like, why? Why doesn't the physical therapist why doesn't the massage therapist? Why do, like, why do these people not why are they not using a tool?
Jon: I think they have they have a tool right now, I would say is a lot if to an extent that is built into their existing workflow, that's a crappy scheduling option.
Peter: But it's not available to the public for scheduling.
Jon: It's hard because you have to learn how to hunt and peck. Does my doctor have a scheduling tool? Do they not have a scheduling tool? So a scenario that that we had is I was feeling really sick one night, like at three in the morning. Yeah. And I went to my see app. I says, Can I schedule? I had to hunt around.
Jon: I finally found where their scheduling tool was. And then they virtually don't have any options. So I don't know. The actual answer is why that medical office, you know, you could schedule virtual, but they had very few options. And you know there might is probably HIPA why they want you to go through their secretary. But if I had had a hip compliant option at two in the morning, I could have scheduled something for 8 a.m..
Jon: Instead, I had to wake up at 8 a.m., call them, wait for them to answer for 10 minutes being on hold. Yep. Get scheduled for some time later that day. And as a sick person it just made a much more uncomfortable experience.
Peter: And I get that. I get that. Like it's was a painful experience for you. I mean, but. But you're not willing to pay to solve it either.
Jon: I know, but I think I'll have Here's the hypothesis. Give me the five, ten year thing, just like you go to other marketplaces.
Peter: Like give me an example.
Jon: Google flights.
Peter: Okay? I go to Google flights.
Jon: And you can see all the flight options from all from there.
Peter: Okay.
Jon: I think if something for scheduling existed, how.
Peter: Much revenue do you think Google flights generates for Google?
Jon: Google flights is probably very little. It's not.
Peter: I don't think they make anything there. Is there a portal where they do make a lot of money like that does generate a lot of income. Like like a.
Jon: Fresher would be one. Fresher focuses primarily on sports. I think that's primarily because spores.
Peter: So people go to fresh air hunting for a spot.
Jon: Yeah we are we giving feedback on the model on the pitch deck? I feel like we totally walked away from the pitch deck, which is fine, if that's what you wanna do, because I think people should be hearing. What questions does the.
Peter: VCs, I think look, the feedback from the for the pitch deck.
Jon: Is you don't like the vision statement.
Peter: I don't see what the vision is.
Jon: Okay.
Peter: Like I'm struggling to like you don't. I'm struggling to envision a world.
Jon: Would your life be easier when when was the last time scheduled an auto service.
Peter: Like, I don't know, like a year ago with Tesla.
Jon: With Tesla?
Peter: Do I open up the Tesla app and I say I need a what about schedule service? And then it's like, boom, like, here's your options Bitcoin. And I picked like, what about for your pickup? For my pickup. Yeah. and I for that. Yeah. I give them a call.
Jon: And.
Peter: Then I'm like, Hey, can you fix this? And they're like, Yeah, sure. And then I bring it down and drop it off, right?
Jon: Would it be easier if you could go to a point mccolm and have scheduled that and not had to make a phone call?
Peter: Potentially, but I don't know if I'm When was the last I'm going to go to appointment dot com or if I'm just going to go to their website.
Jon: When I was like I.
Peter: Respect to book something.
Jon: Okay. When was the last time you schedule an appointment with you? Jeff's attorney?
Peter: I don't know. We email.
Jon: Yes. Or email. You have to wait a response for back. What if you want to set up a phone call? Yeah. You could go for your attorney, book it. If it had a workflow built in, would be super easy for the attorney. here's the rate. They're already connected. Here's the rules.
Peter: I get that. I know, I totally get it, But what I'm. What? I'm just not disagreeing. He's just. I'm not understanding, okay? Is why would I go to appointment dot com as a portal to do that versus just like going to their website to going to their gallantly I booking that same time.
Jon: I think so the answer would be if there one place where I know all of the scheduling services that that do virtual scheduling are they're my life is so much easier.
Peter: I don't but but that is a huge lift because that's the other thing that like totally.
Jon: Huge.
Peter: Lift it's an insanely big lift and and but the problem is, is that you don't offer very much value until you have massive coverage. Right. It's like no one's going to sign up for a music streaming service that only has 5 million songs. It's just not worth it. Right? They're going to wait until they've got like 90% of the songs people care about before they sign up.
Jon: But that's also why we're not leading with the marketplace.
Peter: Okay, but that's your long term vision, right?
Jon: My long term vision is any service you want to schedule.
Peter: You can find it through appointment.
Jon: And I don't have to.
Peter: And you become a search.
Jon: Portal and I become a search portal.
Peter: Okay.
Jon: I don't have to go to if I want to massage, I don't to go to the website. I don't have to hunt for their scheduling link. If they don't have a scheduled link, I have to do a phone call.
Peter: So really, like in a way, your competition, like what you're trying to build is like Amazon for services that I think is more interesting than an open table for business services. Okay, sell me Amazon for business services. Okay. And now you're competing against companies like like if you you need a thumbtack thumbtack, right. It's similar to Thumbtack except for instead of Thumbtack.
Jon: It's Thumbtack is telling to multiple individuals.
Peter: Yeah. And look, I'm not saying that you do, Lee.
Jon: And again, you're having to wait for a response.
Peter: But in a way, you are right, because what you're saying is, like, the way we are better than Thumbtack is instead of saying, like, like, Hey, I need a plumber. And here's, like, some details about my toilet that broke, right? And then getting like, three different people approach you in a way. You could build yourself into being like the trusted identifier of who's good, right?
Peter: In some ways, right. If I go on and I'm like, I need a plumber.
Jon: Okay, here's a plumber.
Peter: And like, you just say like, okay, here's some plumbers and here's how they're rating. And I just pick the one I want and I can book the time I want or I could even search by like, I need this fixed like tomorrow or I need it fixed right now.
Jon: When was that your.
Peter: Last like, boom. I can see everyone that's available.
Jon: When was your last plumbing emergency?
Peter: I don't know. Like a year or two ago.
Jon: What happened?
Peter: I don't know. I actually fix most of my own plumbing problem, so.
Jon: Okay, because you're too smart. But what do you think happens?
Peter: I think most people's like they like they you know, they Google search like plumbing. They call multiple they call multiple people and they try to find someone that can come fix their problem at a reasonable price.
Jon: That and you're calling multiple people where you could go to appointment dot com and instantly say, hey, here's someone who's available. They do visits at 6 a.m. in the morning. That's their next visit. They've got a great reputation I can schedule, I can pay, I can validate that this is a real person, you know, nonrefundable deposit. I'm paying for the visit to come out.
Jon: Yeah. You scheduled at home appointment? That would be an example.
Peter: Okay, great. Yeah. So that is, like, what I would want to see. Okay, Does that make sense?
Jon: So my vision site sucks Amazon for services and you want to see the pain.
Peter: Point, but do you see what I'm saying? Like how Amazon for services might be a better solution than open table for business services as Amazon, it denotes this like I like I go to Amazon to buy like all kinds of stuff, right? And this actually brings up a valid thing that you should consider that's a major risk, which is like you've got to convince people to change their behavior from Google searching, right?
Peter: Plumbers or massage therapists or whatever, searching through the things calling. Right. Because that's the current status quo. That's how people are trained to act. And you've got to shift them from that over to go to appointment dot com and hunt for whatever it is, whatever service that you need to have done. Right. So which is not trivial. Right.
Peter: That's tough. But if you can do it then you become like an Amazon. You become like a Google, you become like a place, a destination where people go right? And and I think that is actually super interesting.
Jon: Yeah. All right. Mission statement for what is it? What was the template? I think there's a Sequoia Pitch pitched template and that's what we followed for most of it. But when we used it some, I feel like we get a lot of like feedback, I see this, I want to see this. I'm like almost all these like standard templates on here for.
Peter: I don't know, I mean, in my opinion, your, your, your pitch deck should be like, help me understand and fill the pain point. Okay? Show me how your solution solves the pain point so that I get relief, right? Show me why you guys are the ones to execute on your pain point or on your solution to show me like what traction you've achieved so far.
Peter: What are you like? And anything beyond that is like just personal preference on how you put it together.
Jon: Okay, but do you like a mission statement?
Peter: Sure. I mean, it's fine.
Jon: Fine.
Peter: It feels like your vision.
Jon: Okay.
Peter: Right.
Jon: Help businesses schedule 1 billion appointments by 2030. Get 10,000 business customers by 2020.
Peter: Okay, cool. It doesn't like I mean, here's the thing. It doesn't do anything for me. It's like, okay, cool. Those are those are admirable goals. Big, hairy, audacious goals.
Jon: So this one, this screen, we're going to find out a little bit, but we basically able to talk about is that we acquired a domain code, base users, things like that. We talk about revenue. I debated whether we should include any revenue are not because it's a it was a it's a it's a current operating business that is not revenue for the current model.
Peter: Okay.
Jon: And that we're not currently active it we are focusing on development, not growing that current current revenue stream.
Peter: Okay. So what's my takeaway here?
Jon: The takeaway is we're trying to show that there's traction and there's not just a fancy domain and the things are happening. We're showing things like Google Analytics numbers.
Peter: Look, I think this is cool, but I think it's too early in the deck.
Jon: Okay, where would you put this?
Peter: I put it down. So remember what I just walked through, right? Pain point solution. Why are you okay? Essentially, right. This is the way you right. Like you bought this domain. It's got a ton of advantages. That's one of the reasons you're going to have a jump starting with.
Jon: Okay.
Peter: But to me, like this doesn't answer the question of like how you're solving the problem yet.
Jon: Okay. Okay. So here's our problem slide. And I think this is what you were looking for earlier. Yeah. How do we currently schedule for a point search for appointments? We do Google search, call, voicemail, we hunt for scheduling. You are all which is one of the things that you've talked about here. And ultimately we see it as scheduling in 2022 is painful.
Jon: Would you agree.
Peter: For business services or not?
Jon: What you mean or not?
Peter: But what like rescheduling? But like just scheduling in general is kind of painful for business services, right? Correct. Yeah. Especially if you don't have a relationship with the company already. Okay. I think the other thing to hear that like if what you really want to be is a portal, then I would also talk about out how I don't know in my mind, correct me if I'm wrong, but in my mind the pain point you are trying to solve here is I'm the massage therapist, right?
Peter: And there are customers I am missing out on because they call and I can't take the call. They try to, but they try to find the link. They can't find the link to schedule. My scheduling tool is not up to date. Right? And it's a pain to manage it and make sure it's up to date. So ultimately I turn it off because I've had bad experiences of people double booking or whatever, right?
Peter: Like there's all these like pain points of like me losing out, missing out on revenue that I could have if I had had a better scheduling tool. Right. And a better scheduling tool for customers to use and discover who I am and all of that sort of thing. Right? So that's part of it. And I think the other part of it is like Google was a great solution, but ultimately, like you, you're running into all these problems.
Peter: Like I do a Google search and I see a whole bunch of results. But like now I got a call each one, I got a pull up and each website or I have to like whatever, and then I have to spend all the time to figure out like, when are they available, when are they not? And I end up, you know, if I'm a business and I am available at that time.
Peter: But I didn't pick up the phone in time, I missed out on that client. Right. Like I think about my mom's bankruptcy practice, right? Like something like this would be great for her because her problem is like people call in and she can't pick up the phone fast enough, Right. To get them. And so she's she knows that she's missing out on people.
Peter: And it would be better if she just had like the ability for somebody to, like, go see what her availability is, book their own appointment. Right. And her schedule and go from there. Right. So like, I can see the value there. That's the kind of pain point that I want to see here is like, like her, like all the pain that she's feeling from missing out on revenue because the customer experience sucks to schedule something.
Jon: The pain points the pain point on both sides. I'm curious, why did your mom not use the scheduling tool?
Peter: She she does, but I mean, it's not very good. Okay? It is built in somebody else's process.
Jon: Okay.
Peter: But look, I agree. The pain points on both sides. But only one side is going to pay for it. Right. And so that's how I would approach it is like the pain point for the business owner is this. And the reason it exists is because the customer has this pain point.
Jon: Okay, got it. What are you laughing for? Next slide. Where do you laugh? Plus laugh for?
Peter: I don't know. Like you. Like I like my my thoughts.
Jon: No, I think your thoughts are really good. And I think the more I talk about it and verbalize it with someone who's not in the space, it's always beneficial. And then I think for the audience here, seeing them like what's happening behind the kimono where, you know, it's a safe space, you can say the baby's ugly and I'm not going to like block you on Facebook or I message.
Peter: You're going to cancel me.
Jon: I'm not going to cancel you, okay? We put a tool.
Peter: To rule them all.
Jon: Yeah. So for the solution thing, we said wonderful Through them all. We feel like the solution getting rid.
Peter: Of open table. So the Amazon.
Jon: Okay. And then other services, CRM payments, workflows, reputation management, things like that.
Peter: Yeah. Here's the other thing I think that's not here is integrations, because to your point, what's happened is people came out with this like dedicated calendaring solution, right, for business services and other companies have rolled in a simplified tool. And then customers were like, well, it's like good enough. And so they ditch the other product, right? And part of the reason they probably ditched the other product is because the other product doesn't integrate well, It doesn't tie in with the other business processes.
Peter: And so it's actually even though the actual scheduling is better, the workflow part of it, which is way more valuable, is worse. And so they get rid of it. And so one of the things that I would be thinking about then is like, how do you integrate into the workflow? Can you integrate with,
Jon: Great question for.
Peter: Your.
Jon: Company, would you like us to go to the next slide?
Peter: That would be great. But it should be here on this solution side. Okay. It shouldn't be on the next one.
Jon: Okay.
Peter: Right. I don't know.
Jon: The question is how much of the story do you tell and when? Because I feel like that the challenge, the biggest frustration, I think, in pitching is some people like you're just too small, it's too simple. It's never going to be big enough for us to be interested. It's never gonna be a billion plus. So then we we show them the big vision and then other people come through and say, This is too technical, you're doing too much.
Jon: And I'm like, How do we win? We like it. Like it's this constant flip Andreessen Horowitz that you're thinking too small. And then I talk to someone at another ABC fund and they say, John.
Peter: You're trying to boil the ocean.
Jon: Yeah, you're trying to boil the ocean.
Peter: Well, if you're trying to integrate with every single business service out there, day one. Yeah, but you're boiling the ocean.
Jon: The answer is simple.
Peter: Just tell me you're going to focus on a niche.
Jon: What's the top? Yeah. When you built the way we look at this is we we build a freemium model, we start getting people on. And as we start these niches start attracting, that's when we start building deeper and integrations and workflows and phones and payments, things like that.
Peter: Yeah, but look, so, so one route is to like build the whole workflow and another is to integrate it with.
Jon: Existing both, right?
Peter: Yeah.
Jon: In order to have a marketplace, you need to remove as many barriers, barriers to entry as possible.
Peter: Yeah, all I'm saying is here you've got the other services which is building out the workflow. I would also include integrating with your hosting workflows.
Jon: All right, for next one.
Peter: Let's do it.
Jon: All right. So this is where we where we try to show the big vision of where we're ultimately going. And maybe we should show this one sooner is like when I saw appointment. And the reason I got excited is because I see this combination of things. I see there's a potential marketplace, I see there's workflows. We can do SAS subscriptions, and I also see like a network effect where the more users you have, the more valuable the service can become.
Jon: And I, from one my prior business is tying to work. I really like SAS businesses where the user is incentivized to bring more people on board to get them in the app. And most SAS applications don't have it. So if you said like, what's the one reason why I sprung on this opportunity, it was for that.
Peter: Okay, so I'm just trying to make sure I understand. So the idea is kind of like I'm the massage therapist, I list on appointment dot com my services, but then I also have an appointment dot com calendar on my website or something along those lines. And so people that find me through my website are using appointment dot com they get familiar with it pulls them in and now when they need a physical therapist appointment they know that they can go to appointment a com to do that and maybe they even have an account.
Peter: Right. And that that's where like you create real networks network effects is because it's like, I haven't I have a an appointment dot com account and so when I book with my massage therapist or he has all my information, my name, my payment information, all that stuff preset and then when I go to book my, my dentist appointment or whatever, it's got all of that same information there and I just like click, yep, I want to book this appointment.
Peter: I don't have to fill out their form all over again. Right.
Jon: And I can see them all in one place.
Peter: Right? Well, I have the ability to see it all through one portal or I can go website to website, right? Either one.
Jon: I mean, the way I see this is we could also provide them an API so they could take the data and do what they want with their client data as well. Sure, sure. Remove Barry entry so the businesses will also want to be on board. Hey, we don't like appointments process. We've got our own process. Still allow them to connect.
Peter: Yeah, but like from a consumer perspective, like it would be nice not to have to have like 50 million logins to manage the same information, right?
Jon: Correct. So and I could see all of my upcoming appointments from one spot. It's not like, hey, I scheduled like one of those new scheduling tools out there in the open table spaces. Rosie Yeah, and when I go to Rosie, I can see all of my, my upcoming, like appointments.
Peter: That you've booked through. Rosie but you're not seeing the ones on OpenTable. But the advantage I mean, the advantage disadvantage you have is like there are zillion other calendaring apps that aren't going to like, fully integrate with this. But if you can get all of the business services right, correct. And then you can push to calendaring applications like Google Calendar and iCal and so forth, then it's fine, right?
Jon: You like the slide you still from effects if you're from if you're familiar with.
Peter: With of course.
Jon: You like to slide in here.
Peter: I mean, it's fine. You have to do a lot of explaining for me to get it though.
Jon: Yeah. I mean, I think most I.
Peter: Think it would be better. Like your slide deck is, like, super simple. Yeah. And I feel like you could do more with it, just like, a little bit more diagrams and stuff.
Jon: Okay, So.
Peter: Like, for example, we just walked through this whole, like, workflow and network effect that's going on, right? Like, show that to me in a diagram. I'm like, Hey, here's Judy. And like, she's books an appointment with her massage therapist through the appointment dot com widget that sits on her their website, right? And by doing that, she sets up this whole account and then when she goes to appointment dot com because she needs to find a plumber, right.
Peter: Boom. Like Oliver she already has an account. It's all set up. It's got her payment information, her name, all that stuff. And boom, I've got this network effect where that massage therapist just got me. Well, just got my plumber, a customer. Right? Okay. Yeah, that makes sense. Yes, like that. Like, all of a sudden I'm like, okay, now I can see, like, where these network effects are starting to play.
Peter: Okay.
Jon: I like it.
Peter: And the idea is each additional business service or service provider you add adds more value to the overall experience of due to your the person's scheduling, the different things.
Jon: Okay, I dig it. I don't know. I feel like you want me to say something or you're afraid that you've attacked me and I'm upset.
Peter: No, I feel like you're, like, just nodding. And you think what I'm saying is like, okay, whatever you think, Beta.
Jon: No, I think it's a good point. I mean, the challenge is there's so much that ultimately a pitch deck is one's ability to tell a story really well. And to do that, it takes a lot of time.
Peter: I 100 thoughts.
Jon: It's hard. And I think that was the biggest surprise because, again, I was in the space for four plus years. Yeah. This lot, you know, you go to your first b c meeting thinking like, I've got tons of experience. This is not something I've thought about in my shower for the last month, and I'm doing this, and so I'm just taking it in.
Jon: All right. This is not a this is not what, like my wife would say, be like, yes. Yep. So this one, the solution visualized probably should be be updated because I think this is probably more.
Peter: This is more competition, more competition. And I feel like solution visualized would actually be like screenshots of your product but we're wireframes or whatever. But that's like.
Jon: That's all getting out.
Peter: Create some sort of. Yeah, but like come on, like I could create something.
Jon: Right.
Peter: In like, like a couple hours that, that looks close to what I want to do, right?
Jon: I mean, that's what we started initially at the beginning was.
Peter: Yeah, exactly. You got this.
Jon: But now again we've pivoted. So you want to see.
Peter: Like people anchor to things. So do you want them to anchor to something like this that they're not going to remember? Or do you want them to anchor to something like sexy and flashy and like, okay, something that communicates like what you're aspiring to? Okay. All right. So from a competition, I don't think these are your competitors. Yeah.
Jon: Why is.
Peter: That? Because I don't think of any of these as, like, portals. Maybe Booksy.
Jon: So Booksy and fresh air both have portals, but they're wellness spas only.
Peter: Yeah. See, I think really what you're what you're building is a portal that's powered by a calendar. Okay. So I would be looking at other portals for business services. I think your competitors are like Google. I think it's Thumbtack. Thumbtack? Yeah, I think Booksy fresh. Some of these others, I think, are also types of competitors. If there are companies that do what book seem fresh to do for other industries that are more verticals like plumbing and and electrical and stuff like that, like those would be interesting to put here.
Jon: Okay. I thought another option was to list the portals where you can schedule specific types of appointments, like who does auto scheduling.
Peter: Yeah, exactly. That's what I'm saying. Like other like vertical.
Jon: But there's, there's very few portals. Most of the portals they've got Thumbtack, but Thumbtack is more of their cell leads. You can't actually book an.
Peter: Appointment now, but the pain point that you are partially solving is discoverability.
Jon: Correct. Which is.
Peter: How.
Jon: Google Local would be a competitor and Thumbtack would be a company. Exactly. But none of.
Peter: Those and this is where you could create like like a strategy map, right? So you have one axis that is saying, okay, this is scheduling. This is who we compete with with scheduling. And you've got companies that are super niche like books and pressure where like, yeah, they've got scheduling portal but they only are health and wellness, right?
Peter: And then you can have others where it's like discoverability, right? And you've got like the Googles of the world and the thumbtacks and so forth. But they don't do sketch, they don't do scheduling. Okay? And then you guys sit in this like Holy Grail spot where it's like we do both.
Jon: Okay.
Peter: Something like that, like would really communicate, like, okay, portal plus scheduling. Boom. I get it.
Jon: Got it. I like that portal plus scheduling. Okay. The other big challenge, I think that in this model that we that we struggle with is when you see a marketplace, most investors see that it's so unattainable that it's an automatic turnoff where I think if they realize, hey, we can make money, whether we get to the marketplace or not, and we are a great business regardless.
Jon: And I think that's one of the things that that that VCs currently get lost on.
Peter: And I don't really feel like you're communicating that pathway super well. Okay. I don't know necessarily how I would do differently, but I'm just my initial feedback is like, I don't I don't feel that.
Jon: I mean, this is one of the things like the open table component for scheduling. That was something that came up probably a couple weeks ago. Hey, here might be a better way to explain it.
Peter: Yeah, you know, part of it might also be like, look, we're going to just focus niche by niche minute and start rolling them up. Like, why go head to head with books and fresh if they're already there, why not build the portal for electricians or plumbers, fire or physical therapists for whatever it is? Right?
Jon: Yeah. The way we look at it is build a generic scheduling tool and as you get critical mass, you can start measuring and then focusing your message and focusing your sales and marketing efforts.
Peter: Yeah, but usually you're not going to get critical mass because until you focus on one vertical racks, it's really hard to build critical mass.
Jon: I think a lot of the scheduling tools are very.
Peter: Generic, but what you're saying is like we build a generic tool and then we go start testing it and seeing who gets the most value out of it, and then we target them.
Jon: Correct?
Peter: Yeah, I agree with that.
Jon: Okay, next one. So we add we add a road map. So your entire integrated phone system integrations here base two things like that marketplace, we can win in our mind if we only ever hit phase one in phase two.
Peter: I think there could be a lot more here.
Jon: But like what? I feel like the challenges we add more than we get told we're boiling the ocean.
Peter: Well, when I say add more, I don't mean like add more phases. Yeah, I mean like, give me more details.
Jon: Okay. What would you like?
Peter: Like, help me understand like what these exactly mean. And if you've already done that in prior slides because you rework things so that I have that better feel than like, tell me how big that opportunity is. Okay to you guys.
Jon: The opportunity size for each space. Yeah, luckily we've got that, but you'd like to see it on these slides. Sure. Okay.
Peter: I don't know. I'm just giving feedback slide by slide, so I can't know.
Jon: This is great. I think this is something that most people would never see, which is again, why we wanted to do this for the podcast.
Peter: I think this is a really long episode that you should chop up into like three potentially.
Jon: Part one. Part two, Part three Yeah, the founding slide, we're going to kind of like fuzz off. There's more people we're going to like hide like everyone who's involved is or could sign off on the two. But but from this, we kept the team slide just like the the founders versus everyone who's involved.
Peter: That's fine.
Jon: And just positions.
Peter: Yeah.
Jon: Any changes here?
Peter: Look, if you're pitching to me. I know you both, okay? Like, I know enough about both of you that I'm, like, cool.
Jon: Like, but if you did, But.
Peter: But like, this is like, this isn't, like, telling me anything I don't already know, right?
Jon: But if you didn't know.
Peter: But if you didn't know, I'm going to look at this, and I'd be like, Never heard of any talks calendar. Okay, maybe I've heard of Adobe and I'm not sure. I don't know what you did at those companies. Okay? I don't know much about code base. So like, like there's a bunch of logos I don't really know much about.
Peter: Now, what could be interesting is like code base scaled it from zero to blah blah, blah, right. Managing X number of like, give me something. Right. Okay. Like a resume point. Okay. For each thing as like why I should care if I don't know. And then ultimately, like this stack, this slide is all about like, it's like getting me excited about the team.
Peter: Okay, That's your goal. And so, like, if you do it with logos and I'm like, wow. Like, he's got, like, people from all these, like, cool places that have done amazing things. Like, that's cool.
Jon: So we were talking about the teams. Like basically I think that's where people left off. So the podcast is going to keep going. But on the team site here, basically you're saying you would like to see how big is code base, What's the revenue, how many people are employed, Why do I care?
Peter: Yeah, just give me some sizzle, some sizzle, get me some sizzle. You'd be like, Wow, John's legit.
Jon: Business model paid feature is just kind of a super high level payment processing marketplace for for new clients. CRM workflows, integrated phone system and reputation management. Okay. Any changes here or. I feel like I feel like knowing what you'd say now, you'd want to say this is how big we think each market space is or what's with the team.
Peter: Or maybe, maybe not. You know, what I actually would really care more about is any sort of validation that these are the right ways to price things and monetize. Yeah.
Jon: How would you want me to validate that other than saying this is what the market's currently paying for these type of features.
Peter: You do.
Jon: That. Okay, So this one. Andresen my friend at Andreessen Horowitz, who's not a partner, this one's tricky because we were trying to show how we could become worth a billion plus. Then we pitched it to Andresen. They're like, You're not even 20 billion. This is a joke.
Peter: They did not say it that way.
Jon: I've got the text message.
Peter: They said, If you're not 20 billion, you.
Jon: Know, I had a phone call. Yeah. I mean, but this is a friend of a friend speaker speaking openly. He says John Fund sizes are 20 billion. They need to see that you could like if you're the winner, you need to return the amount of the fund.
Peter: Yeah, that's true. You got to be $1,000,000,000 potential outcome for Andresen, but you don't need to raise money from injuries. And besides, that's baloney, because I know other deals that they've backed and I'm like, there's no way this is a $20 billion company potential. And they backed them.
Jon: So, okay, initially this one was we showed this how to become worth $1,000,000,000 plus. So we said if you look at the top, it shows number of business customers and we broke it down by MRI. RR And we said if for a little over 10,000 customers, business customers of multiple valuation of 17 of revenue, that would put us over billion.
Peter: Mark So your error here though, is a billion, right?
Jon: For if you're trying become a billion, like.
Peter: If you're trying to become a $20 billion company.
Jon: Right? And then the some of the local views are like, John, you got to you got to cut this number down if you want us to share it or help or help you out, like if you want introductions in the book for Andresen and Andresen, like, I need to see, you're like, you're you're shooting big. But then again, they typically don't jump in until a deal.
Jon: Series B, right?
Peter: Did I want to worry so much about valuation? Okay. I would just say and I wouldn't say like this is.
Jon: We were just trying this.
Peter: Is like a new opportunity. I would say this is market, okay? Just just have it as a market size.
Jon: The market size for these things.
Peter: X Yeah. Okay. And you could go granular, right? You could be like, I mean if you wanted it approach this like niche by niche, right? You could say well like the plumbing space is this big, you know, blah blah blah. Right? So now I mean I think I would just approach this as like, hey, here's like the general market sizes for what we're trying to do here, right?
Peter: Dump thumbtacks, market sizes this big pressure's market size this big or whatever. Right. And I would just leave it as market size because like, if you're operating like if you are a true part of, our business services, this market is insanely big and that's the only box you really need to check.
Jon: Okay.
Peter: In my opinion.
Jon: Okay.
Peter: And when you do this, I think the VCs are looking at this and they're like, Wow, this is a slightly unrealistic. So I'm out. Like, I can't stand behind this.
Jon: And why don't I mean, I think for me the big debate was people who are funding deals look at this as being over the top. ANDRESEN If you showed, hey, this is how we get to build, this.
Peter: Is how you get around both of those is you just say like it's $1,000,000,000,000 market, okay? And then we like size it down for what we're going to attack first. And it's like a $10 billion market.
Jon: Okay, exit landscape. So this is more of a scheduling landscape where you would probably say we should focus on portal acquisitions.
Peter: Yeah. Because like, honestly, what was acuity acquired for?
Jon: So I don't know if but from the those are some of the numbers that I like what's in the.
Peter: Pipeline like 100 million bucks.
Jon: They said revenue was roughly 2025 million. And in the podcast the founder said the percentage was about 40% profit.
Peter: But how fast where they growing or they.
Jon: Don't have all those.
Peter: Aligning. Like I know you don't have the numbers and I'm just saying like in my head, this is what's going on is I'm like, that wasn't that probably wasn't a huge outcome. And it but it's your number one thing of like, hey, if we got hired by Squarespace and probably, like, what was a fire sale, and that's why, like, we're going to, like, you should invest because we're going to be so awesome, like, acuity.
Peter: Okay, Like, right.
Jon: So you would just say, Hey, here's the current portals and this is what there were. But there were.
Peter: Yeah. And the ones that have been acquired and.
Jon: But I think also if if we're doing a portal, do we even need a slide for exit acquisition landscape? Because people, I think when we were this like came and we were talking about creating a scheduling tool for services.
Peter: Yeah.
Jon: So, so it was just like a quality competitor and no one knew.
Peter: Like, okay, so these slides are helpful if what you're trying to do is demonstrate like downside protection, Okay? Right. Because you're like, Hey, there's a ton of acquisitions occurring in this space and somebody will buy us, right? So you don't have to like stress about it. Like there are lots of buyers for this.
Jon: I think the issue of the portal is if people can see whether you get to the marketplace or portal or not. Yeah, if you can still have a solid business off of workflows and scheduling and CRM.
Peter: So the way I've seen this pitched is basically like, here's the big market opportunity and like if we hit it, we're going to be like $1,000,000,000,000 company, blah, blah, blah. But even if we don't like this, this sector is rife with people with acquisitions. Here's like a whole bunch boom, boom, boom, boom, pumped that have been acquired. And and so, you know, like we're going to shoot for the moon, but, you know, we are going to shoot for the stars.
Peter: We end up landing in the moon like there are plenty of people to acquire. So again, it's like protecting your downside.
Jon: Okay, contact info. We'll fuzz this one out. Do you put in a pitch tech now?
Peter: I mean, you can. Sure, why not?
Jon: Do you put an appendix in a pitch deck?
Peter: Yeah, but not one that I share usually. Not one that I would share.
Jon: Okay, so then we won't go through the rest. The appendix. So from this pitch, is there anything from other than what you've already said should be there.
Peter: Not be there? I don't know. High level budget would be interesting, just as I have like and there's no ask.
Jon: The ask is right there.
Peter: Okay.
Jon: So is that a good breakdown? Tech marketing sales operations pre market before this this current recession we're in or whatever in year eight we put 2.5. We've scaled it back based on the current market, although you'd probably say go raise 500 K if you're going to raise it. All right now.
Peter: I don't know. Look, if you can raise 1.5, raise 1.5.
Jon: Okay?
Peter: Valuations are going to be tough, but okay, that's okay. Look, the valuation is not actually going to be that much different now versus another point in time because you don't have a product yet.
Jon: So products are getting built right now.
Peter: So it's going to be is it going to make a big difference? The bigger challenge will just be harder to raise because these are sitting on their hands right now.
Jon: So how many VCs are actually funding new deals? I heard on today? I know this could be a rumor. They haven't funded a new deal since February. And again, that might be a normal time period or.
Peter: You know, I think a lot of aces are sitting in their hands right now.
Jon: How long will they sell their house for?
Peter: Until the markets stabilize.
Jon: When do you think they'll be? Six months.
Peter: It's going to be like 12 to 18 months.
Jon: For 18 months? Yeah. So funding, do you think we'll be low for the next 12 to 18 months?
Peter: Yeah. Which is why all the VCs are telling their portfolio companies, if you can raise anything, raise it and. Cut, cut, cut your brain so you can survive another 18 to 24 months. Okay. It's just a just a tough, tough market.
Jon: Are you guys funding new deals?
Peter: We are, yeah.
Jon: But you guys, this model is very different from a standard.
Peter: Model's a little different. We also like, like, hey, you know, if they're good deals we have like we're going to fund them. Right. So and our model is different, like we don't take super concentrated bets like other funds do. So you know, we kind of like spread the love a little bit and like if there's deals that are like come in at a really low valuation on a relative basis, like it's a buyer's market, why wouldn't you be buying.
Peter: But you, the flip side is like we've turned away, turned down a lot of deals that maybe we would have funded like six months ago or just like too rich, Right? Not a good enough deal, too much uncertainty around the sector, too much, you know.
Jon: How much have valuations gone down?
Peter: Well, okay, so public market tech has dropped, like in some cases 70, 80%. That hasn't caught up in the private markets yet. And I don't know that it will. I think what will actually happen is you'll have extensions of prior rounds, you'll have bridge rounds, you may have some down rounds, but they will be moderate down rounds and you'll have companies go under.
Peter: But I don't think you'll have like an 80% down round. I don't think that'll happen. I think the companies will just go out of business because they can't raise more money because like, look, if you take an 80% down round, I mean the company's done right, Like you just put all of your employees underwater on their options. So they're like totally wiped, right?
Peter: The founders get massively diluted. Prior investors get to I mean, and then there's just like, nobody's excited about it anymore. The company fails. So, you know, in public markets, like, you have a little more flexibility there because like, you can kind of come back from it. And usually by the time you're public, you're super big anyways. And so you hopefully have some staying power and some other things.
Peter: But in private markets, yeah. And then there's also the incentives like the VCs, they don't want to take an 80% haircut on their devout, their valuation because the like damage of the returns and then they can't raise another fund. And so like they're incentivized to do like a bridge round like, yeah, we'll just give you a little bit more money so you can survive through this and come out the other end.
Peter: And that sort of thing. So like, that's how voices in the private markets tend to like deal with massive fluctuations in the public markets is like, I will just bridge you until we get to the other side of it. Hopefully, hopefully things are better.
Jon: Okay, But 12 to 18 months probably. Okay. Well, thanks, Peter. And it was getting late. It came all the way from his home. You're an hour away, so we better let him get back.
Peter: Thanks for having me, John. It's always a pleasure.
Jon: Good. A venture capital firm. If you want to subscribe to us on Spotify, on iTunes, see us on YouTube, and make sure you give us a six star review that we greatly appreciate appreciated as we as we grow this podcast.
Peter: Make Jon famous. That's a bit easier.
Jon: For Make Peter famous. That's about easier. Fame and glory.
Peter: It's true.
Jon: All right. Thanks, Peter. See you guys.
Peter: So.