Airbnb Pitch Deck - The Insights that will make you pitch ready!

When Brian Chesky, Joe Gebbia, and Nathan Blecharczyk founded Airbnb, they had no idea on how to craft a pitch deck. So, while surfing the internet for pitch decks, they came across Sequoia Capital’s template. With that in mind, the founders crafted this unique pitching deck, which helped them raise $600,000 from Sequoia Capital and Y Ventures, back in 2009!


Airbnb is now a unicorn in the travel industry and was last valued at US $31 billion in 2019, as per PitchBook. This same Airbnb Pitch Deck still remains the most referred pitch deck amongst the entrepreneurs, across the world.


In this article, I have reviewed each slide of Airbnb's pitch deck, giving you detailed insights as to why it is still considered a masterpiece, despite being a decade old. I've also shared the key mistakes many first-time entrepreneurs often make on each slide, along with the tips for you to create or re-design your own pitch decks and make it investment ready!


So, let's start.


Cover (Introduction)

“Book rooms with local, rather than hotels” crisp and a perfect headline, describing what Airbnb service is all about. Simple words, no tech jargon!


Mistakes, most entrepreneurs make?

Most of the time this slide is missing, or a few just put their logo or maybe include some jargon tag-line, which really says nothing about your startup, but rather confuses your potential investors.


Tips for You!

Describe your startup’s purpose i.e. what your startup does in a single declarative sentence within 10 words. If the potential investors don’t get it or if you had to explain the whole slide, you've already lost half of your investment chances!



Problem


Airbnb marvellously covered this slide with 3 simple,  impactful sentences!


  1. It highlights the Price as being the most important factor, for people when booking online.

  2. It talks about how hotels are so far-away from important hotspots, which the travellers wish to travel and it also uses the emotional aspect of the missing local culture while staying in the costly hotel rooms.

  3. It presents a unique idea i.e. currently there’s no such solution, smartly creating the FOMO (fear of missing out on opportunity) as well as why now, for the investors!


Mistakes, most entrepreneurs make?

Most entrepreneurs focus on solving too many problems. Investors considers it to be a rookie mistake, assuming that the founders have no focus or vision. Be specific to one key problem which you’re solving and ensure that it’s actually a problem, faced by many. Note, most investors easily get bored and uninterested, when they fail to understand or relate to the key problem or pain, being solved.


Tips for You!

Describe the key problem you’re solving or the pain of your customer (or the customer’s customer). How is this being addressed today, and why the current solutions are just inadequate to solve it. Ensure that the investors would be able to relate to or empathise with it, else they’ll not be interested to go further with your deck!



Solution


Very similar to the three Problem statements, the Airbnb Solution slide too summarises the 3 most important reasons, why a customer would buy their service i.e. their unique value proposition. Look at their headline, “A web platform where users can ... ” and impeccable solution statements to highlight key benefits and not features!


Mistakes, most entrepreneurs make?

Most entrepreneurs merely cover the screenshots of their product or service, filling up to 2-3 slides and listing all its features. Nobody cares about the features, customers buy because of the core benefits your product or service offers to them. Investors are keen to understand, how are you solving the key problem, better than anyone else in simplistic terms.


Tips for You!

Demonstrate your startup’s unique value proposition to make your customer’s life better. Illustrate, the use cases i.e. the moment your early adopters were in awe with your solution!



Market Validation


For Airbnb, the concept was innovative, if not new and so for them, the market validation was essential, to showcase how people were keen to opt for cheaper and shared spaces.


Airbnb smartly used a combination of data from its competitors i.e. Craigslist and Couchsurfing to showcase their market validation. Till 2009, Craigslist had been 'solving' the issue of temporary hosting for a while, so they took their total users as well as the 17,000 weekly listings in Couchsurfing for SF and NY. Together it was the best possible proof of a demand, for a similar product.


Mistakes, most entrepreneurs make?

Most entrepreneurs here simply quote the numbers of app downloads (freemium service), likes, and comments on social media, as the market validation. Investors invest in businesses that make money!


Tips for You!

The best way to validate your idea is to show traction to the potential investors. This is necessary to prove that your business model is proven and working effectively!



Market Size


Airbnb chose an ambitious target of 15% market share (i.e. 84 Million trips) of their serviceable available market (560 Million trips). But then, Investors aren’t excited about less than 5% market share. They even quoted the figures based on verifiable and credible data sources such as the Travel Industry Association!


Mistakes, most entrepreneurs make?

Most entrepreneurs quote the full worldwide industry market as your serviceable market when in reality they’re just targeting a slice or a product segment of that market. This is an absolute rookie mistake, which investors don't forgive.


Tips for You!

In the case of a replacement market (e.g. automating an existing service), it’s easy to quote how big this existing market is today and how you could eat it swiftly. In the case of a new market, you need to identify your customer (or segment) and your market. Get your customer persona correct and always use trusted data sources to quote how big is the actual serviceable market!



Product


Airbnb excellently showcased its service in this slide, illustrating how easy it was for a user to book in 3 simple steps i.e. The Search by City > Review Listings > Book it!

A similar simple process was created for the hosts to create the listing, even if they lacked technology knowledge!


Mistakes, most entrepreneurs make?

Most entrepreneurs hover around 2-3 slides, embedding screenshots of their product or service, with a para text on each feature or aspect. Investors have less than 4 mins to review your deck, make sure you use time wisely.


Tips for You!

Product slides should summarise the core functionality of your product or service, in as few words and/or images, as possible. If a single image is insufficient, the best way is to create a short 15-30 seconds video, showcasing how your product or service functions!



Business Model


“We take a 10% commission on each transaction” explains Airbnb's business model in a single crisp sentence, something even a 5-year old could understand! Note, their projections aren’t on some made-up numbers, in fact, they reused their market share x average fees x 10% commission fees to arrive at the projected revenues of $200 Million till 2011. This was bound to get the investors excited!


Mistakes, most entrepreneurs make?

App developers often talk about xx/xxx downloads per month, however with no specific plan on how to monetise it. Or some entrepreneurs merely rely on the Ads revenue. Sorry to break your entrepreneurial dream, but Investors don’t invest in such startups, anymore.


Tips for You!

Show how will your startup make money? Investors don’t invest in startups, where there is no concrete plan to make money. If you can’t show revenues, show the number of app downloads (using freemium as well as paid service), key partnerships, testimonials, or anchor early adopters!



Competition


By differentiating itself in terms of affordability and online transactions, Airbnb marvellously used this slide to showcase it’s differentiating value proposition, against all its competitors. Remember, how Steve jobs used this analogy to show how the iPhone was so different than the rest!


Mistakes, most entrepreneurs make?

Most entrepreneurs either miss out on their competition or just downplay them. This is by far the worst delusional rookie mistake made by first-time entrepreneurs when they claim they’ve no competition. You’re already off the investors list, if you say you've no competition, cause every product or service has direct or in-direct competition.


Tips for You!

Deeply research all your competitors as much as they know about themselves. Then showcase, your unique value proposition (UVP) i.e. how you’re different or better than them, or why would customers chose you, instead of them. Then, visually convey your UVP!



Competitive Advantages


Airbnb’s idea of using this slide was to answer all the likely questions, which the founders had expected from the potential investors. Airbnb highlighted its core benefits for both the hosts and guests. Some of these were unique and unheard of in 2009 i.e. incentive for hosts to earn extra revenue, ease of use for hosts (posting only once) and guests (remember 3 steps), etc!


Tips for You!

I think competitive advantages are best covered in the competition, investors want to see how well you beat the competition, in long run!



Market Adoption

This slide can also be termed as Go-to-Market strategy, here Airbnb succeeded in showing to the investors that there’s a well-thought and effective marketing plan in place, incorporating solid ideas by way of events and key partnerships to scale-up their business. Their strategy of using a growth hack to double post on Craigslist was a brilliant way to drive insane organic traffic for a relatively unknown website. Read the full story here!


Mistakes, most entrepreneurs make?

Most entrepreneurs have no strategic plans as to how they are going to market their product or service? As if customers, would come running to buy because of their niche product or service.


Tips for You!

Summarise which 2-3 core channels, you will use for customer acquisition. Clearly spell out the customer acquisition costs as well as their lifetime value, and ensure the latter is 3 X the former.



Team


Airbnb expertly illustrated the core expertise (as well as complementary skills) of each founder and how collectively they were an ideal team to execute it. They also brought in a advisor to help them in other areas, which they had no expertise on. Besides, Nathan was an experienced one, who knew the rules of the game, thus bringing comfort to the investors!


Mistakes, most entrepreneurs make?

Most entrepreneurs miss highlighting each one’s domain expertise, their past professional experience, and if they’ve worked together to prove why they as a team are the most ideal to execute their venture. At the end of the day, investors invest in people, not mere ideas.



Financials


No detailed excel sheets, plain simple numbers. We need $500,000 to earn $2 Million revenues, wanna invest?


One of the missing things here was how the funds will be used and investors want to be sure that their funds would be effectively used to scale-up the venture!


Mistakes, most entrepreneurs make?

Most entrepreneurs make the mistake of being financial wizards, creating a full-blown excel sheet on financials. And, when the smart investors dig out gaps in these and if you don’t have an explanation, your pitching is over.


Tips for You!

I recommend to amalgamate the numbers from traction, with your targeted market share to show the revenue potential for the next 4 quarters. And, then arrive on how much funds will you need, and importantly how will you use these funds!


I hope you found this post useful, and learned some valuable insights.

 
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