Airbnb’s pitch deck is a masterpiece that should inspire entrepreneurs looking for capital
Airbnb was founded in 2008 and has become one of Silicon Valley’s biggest successes. The company that was born as “AirBed&Breakfast” now has a market capitalization of more than $75 billion, 26 offices in the United States and other countries, almost 7,000 employees, and it all started with an initial round of $600,000 that they expected to last 12 months.
The presentation they used in 2008 to raise that money and propel the company to stratospheric heights has more than 10 million combined views on slideshare.net. Over the years, it has become a classic example of best practices for targeting investors.
In fact, the 14 slides it contains are a gold mine of information and inspiration for any entrepreneur who wants to raise capital for their company, regardless of the stage it is in. In this article, we will focus on the best learnings from the presentation that changed the destiny of a company.
Investors and venture capital bosses are always looking for the next hot startup to invest in, so they’re watching presentations every day, around the clock. Plus, they’re usually very busy, so they don’t want to spend 30 minutes on something that could take them 10. The quicker you get your point across, the better. The faster you can convince them, the happier they will be and the more likely you will be to get financing.
Think of it like when you submit a resume for a job. Recruiters see dozens, if not hundreds, of resumes a day, so they don’t have time for irrelevant things. If you add too much verbiage and don’t get to the point right away (your skills, why you’re a good fit, your experience…), you run the risk of them skipping what you have to say because you take too long to say it.
The 2008 Airbnb presentation consists of 14 slides, nothing more. It’s incredibly short, but that deck was enough to secure $600K in funding, and that eventually propelled the company to Unicorn status.
In any investor presentation, you will always need to include at least a few crucial points. Here you have them along with the number of slides that the Airbnb guys used for each point:
- Company name + logo (1 slide)
- The problem (1 slide)
- The solution (1 slide)
- Product (1 slide)
- The market (2 slides)
- The business model (1 slide)
- The team (1 slide)
- How much money do you ask for and for what (1 slide)
- Solution Slide
The solution slide will always be more impactful if its structure is based on the presentation of the problem. Typically, you will present a problem in the form of 3 bullets that provide all the necessary context, and you will present a solution with 3 bullets as well. It is direct, clear and easy to remember.
As an example of a less impactful problem vs solution slide combo from another startup, here is part of Intercom’s first pitch deck, in 2011:
You have to take into account some things:
- The problem slide is too long, with 4 bullet points instead of 3, and too much text for each bullet.
- The solution slide does not follow the structure of the problem slide. The solutions are presented as “Intercom is…” sub-vignettes, and there are 5 solution vignettes for 4 problem vignettes. It’s a little confusing.
Your marketplace section will also be crucial, which is why the guys at Airbnb decided to dedicate 2 slides to it. It’s one thing to tell your investors about the potential size of the market, and another to show how much of the pie you want to take home. In the case of Airbnb, the business model is excellent for 3 main reasons:
1. It’s commission-based: The company isn’t actually selling anything, which removes a barrier to entry for customers. It only acts as an agent between people who want to book stays and people who want to rent their home. They charge a commission for the transaction.
2. It is evergreen: as long as there are people traveling and booking trips, the company will make money.
3. It is scalable: the more people use the platform to travel, the more commission the company will earn, without actually selling anything.
Once again, having a good business model is only part of the equation. The other part is to explain it in a very effective and concise way, like this:
You’ll often hear it said that the product slide is the most important slide in any investor presentation. It’s the picture of money, it shows what investors are investing their money in, so it has to be impressive, fresh, finished and polished. That’s why when it comes to apps, software, and online solutions, many founders often present a “photoshopped” version of their product, with features it doesn’t have and a design that looks better than the real product.
The truth is that the product is not the most important thing when presenting to investors. Of course they need to see it, but it doesn’t have to be finished or look good. Investors care about making money, not aesthetics:
As long as you have these components, you will often get the green light. The goal of asking for money is to finish the product, improve it, and market it further. So instead of spending countless hours making your product photo look perfect, you should focus on making it easy to understand:
Of course, you have to tell investors how much money you are asking for and for what. Investors often like to ask how long you expect to last with the money they are going to give you, to get a better idea of when the next round of financing will be.
In Silicon Valley, a lot of money is spent in the hope that one day, perhaps, the company will turn a profit, but it is good to demonstrate that there will be some kind of return on investment, even in the initial financing phase. It does not mean that the company will be profitable, but it helps show value to investors and gives them a potential time frame to see their investment bear fruit.
With this in mind, the guys at Airbnb asked for $500,000 (they ended up getting $600,000) and hoped to generate $2 million in revenue from the investment.
Adoption strategy
Show how you intend to make your product known so that people start using it. It is not always necessary to include it because some products go viral on their own (viral growth).
Contest
Whether or not to include a slide about the competition will depend a lot on the sector you are in. In the case of Airbnb, the playing field was already full of big players (craigslist, hotels.com, bedandbreakfast.com…) so it was relevant to show how the company compared to them. But if you’re entering a completely new field and there aren’t many companies in it yet, you can afford to skip that slide.
Press and user testimonials
It’s always good to include the good things people say about your product, but if you’re not careful it can easily become a gimmick. Even in Airbnb’s case, their testimonials slide is a bit cheesy and awkward, and they probably could have done without it:
One of the golden rules of any investor presentation is to talk more than you show. There is nothing worse than reading out loud what is on the slide and not having anything to add. Minimize the amount of text on slides; otherwise no one will read or listen.
Next, prepare a rock-solid speech that you can commit to memory, and remember to also open the floor for questions, either at the end of the presentation or after key slides. Make sure people hear what you have to say, and highlight only the key facts and figures from the slides. Except for the team portion of the Airbnb presentation, no slide is more than 4 sentences or 40 words.
As for the design and layout, there is no need to do anything extravagant and/or visually complex. Again, most investors won’t care about the design, but rather how they can make money. While it’s true that an attractive presentation will look more professional and convincing than an ugly one, you don’t have to worry too much about the details. Just remember some of the basic design principles for any project:
Airbnb’s slides leave a lot of white space, have a clear structure, and use the colors and font of the brand’s identity at the time (pink and blue). No more is needed.
Airbnb’s investor presentation is a perfect example of how sticking to a few key rules and keeping it simple can have a big impact on your audience. Brian Chesky and Joe Gebbia emerged from their presentation with $600,000 in funding and then propelled Airbnb to Unicorn status and beyond.
Whether you’re working on your next investor presentation, looking to start your company, or just looking for some inspiration, I hope you found these tips helpful. Who knows, you might use them one day to pitch your billion-dollar idea…
