There are a thousand different ways of telling the story of a startup in a pitch deck. The order of the slides can differ, the slides you choose to include can vary, and the aspects of the pitch you focus on can vary dramatically from company to company, depending on what’s unusual about the product or the market or the stage of the startup.
A lot of the time, I advocate including both a solution slide and a product slide as part of a pitch deck. To do that effectively, you need to know the difference between the solution and the product in the context of a VC pitch.
To get to that, we need to rewind slightly. As Steve Blank would define it, a startup is a temporary organization in search of a repeatable business model. The key part of that definition is the “searching” aspect — which means that you are essentially building a company that is nimble and flexible enough to be able to experiment way faster than any of the competitors can. As an early-stage startup, you’ve assembled an incredible team that is uniquely qualified and deeply knowledgeable about a particular market. From the market knowledge, the team has formulated a problem it has observed in the market and wants to solve.
The thing is, you’re still a startup, and you’re still looking for the business model that makes the most sense. This is where the solution and product slides come in. Put very simply, your solution slide is the strategy for how you’re going to solve the problem. Your product slide is the tactics you’re using to implement that solution.
The Team Slide is the most important slide in a startup pitch deck
Let’s get into the nitty-gritty about the difference between these two slides and how to wrap a compelling narrative around them.
The solution slide
The solution slide is the part of the story that builds on the problem you are trying to solve and the team you have at hand to solve it.
In early-stage companies, investors are essentially betting on a team and a market. The assumption is that there is a large enough market that wants to pay for a solution to a specific problem. And the hope is that this particular team has deep enough knowledge and understanding of the overall market to come up with a business that makes sense.
The best way to think about a solution is the strategic-level response to a particular problem. It’s the thesis of the company: It found a problem it wants to solve, and it believes it has an overall solution. Now, there may be a number of ways of implementing that solution, and the company is still trying to figure out the best product-market fit for its specific implementation, but the idea, in broad strokes, is there.
Here’s an example:
Helu is trying to improve how financial reporting is done. As the problem statement, the company identified that “the CFO’s pain point is Excel, because controlling, budgeting and reporting are costly, painful, error-prone processes for any SME.” Helu argues that moving away from Excel is the solution, adding in both financial and non-financial data, implementing budgeting and planning features, and making it possible to do collaborative analysis and reports.
When an investor sees this slide, they might react in a number of ways, but from the startup’s point of view, the investor hopefully agrees with the overall, broad-strokes approach of this solution. Note that the company hasn’t actually said anything specifically about its product yet.
Now, I would immediately hazard a guess that this is a fintech SaaS play, but the actual product spec and features are up in the air. That’s done on purpose: If the investor believes in the market (all small and medium businesses), the problem (Excel is a pain in various parts of the anatomy) and the solution (add in collaboration, better analysis and non-financial data), then half the battle is won.
Of course, there’s still the execution layer to talk about. That’s where the product slide comes in.
The product slide
In my mind, the product slide is the current thesis a startup is working on. Let’s go back to the Helu example:
Helu’s current product approach is creating an integrated solution for CFOs and financial folks. It uses a particular set of data sources and presents all the relevant data in a particular way to is users. The company goes deeper into its product over the next two slides:
Now, I would argue that perhaps Helu is going too deep into its product in this case (because, as I’ve argued before, investors don’t care nearly as much as you do about your product), but for the purpose of this article, it serves as a really good example.
Worth noting is that Helu can change a huge amount about its product — and it probably will — as it gets feedback from its customers, learns more about the market and competitors start popping up with good ideas that the company will want to copy and bad ideas that the company will want to avoid.
The point is that companies can pivot freely on product — that’s tactical — but they can rarely pivot on the solution. For example, in the case of Helu, if the company decided that Excel was actually the right product for CFOs after all, it is completely negating both its problem and its solution theses. That’s interesting; it is potentially possible to build a plugin to Excel, or a way of collaborating better using Excel, but as a company, Helu is taking a stance that Excel is, in fact, the problem. (As a sidenote, plugins to other platforms rarely make good companies)
The way to think about all of this is as a hierarchical cycle of needs. The market, as defined, is pretty fixed — startups can rarely move entire markets in their first few years of operation. The problem statement is also pretty locked in. If you, as a company, are shifting from one market to another, or from one problem to another, chances are that your branding is wrong and your positioning is wildly inaccurate. At that point, in most cases, there’s something so fundamentally wrong that you may as well give up and start another company.
Of course, there are exceptions to this. There are examples of companies that built solutions for one industry only to discover that the product is great as a solution for another industry as well. But those examples are rare, and it’s even rarer that startups are successful in pulling off a market pivot.
The product, however, is often flexible enough to be pivotable.
Putting it all together
To make it all come to life, let’s try a couple of examples.
Market: Automotive.
Problem: Customers want cars that can drive from door to door without any intervention.
Solution: Develop technology to enable vehicles to drive autonomously.
Now, from here, you can imagine a ton of different products. Tesla’s auto-steer is one step along the way, but even Tesla is pivoting here; the first few generations of cars had radar technology built in, whereas the current generation is relying exclusively on cameras. Although, well, it seems like the company is about to pivot back to radars once again.
If you’re not a car manufacturer, the market and problem could be the same, but you might discover that trucking is a great market for simple advanced cruise control and lane keeping, so the truckers are less likely to cause accidents. Or you might discover that there are other aspects of the market you can tackle, such as super-precise, vision-based location technology.
The overarching point is that when pitching your company, you are drilling deeper and deeper into a particular problem. The solution slide outlines the general thesis of how you are planning to solve a problem, and the product slide shows the specifics that you are exploring right now to implement your solution.
Let’s do one more example, this time based on the template I created for my book, “Pitch Perfect”:
The problem statement for BeerSub.com is pretty simple: People want to explore beers, but it’s hard to get good advice, and choice is overwhelming.
The solution slide explains what BeerSub believes is the right solution to this problem — creating customized flavor profiles and using an algorithm to suggest new beers. The solution is pretty specific in this case, but it leaves the implementation layer pretty open. It’s only when you get to the product slide that you discover the specific implementation:
For this particular product, BeerSub is choosing to do a beer subscription service — much like a wine club — with recommendations. Now, if it turns out that this specific product doesn’t sell, or doesn’t find product-market fit, the company could, theoretically, pivot to another business model without having to come up with a new core solution.
You could imagine business models where this is an iPad in a large beer retailer, or an app to scan beers and rate them and get recommendations, or a website (AllMusic for beer?), or perhaps a recommendation engine for an e-commerce retailer. All of these implementations would be valid businesses.
As a founder, it’s your job to have a very clear picture of your business at all of these different layers, from the market to the problem to the solution to the product, and be able to speak intelligently about them at every layer. A fundamental problem on the product layer is likely fixable. If your solution is unwanted by the market, it gets harder. And if the market doesn’t experience the problem you’re trying to solve, you essentially don’t have a business.
The further into your business journey you get, the harder it is to change a product — especially if you already have thousands of happy customers — but it would be possible to launch additional products that solve the user’s problems in different ways, or for different segments of the market, for example.
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