Careerist claims it is closed an $8 million funding round with a tight 12-slide deck, and gave us a lot to learn from in the process. Not all in a good way, but I’m getting ahead of things a bit.
We’re looking for more unique pitch decks to break down, so if you’d like to submit your own pitch decks here’s how to do it.
Slides into this deck
The team submitted this slide deck, noting that it was submitted exactly as it pitched to the investors.
- Cover slide
- Mission slide
- Problem slide
- Solution slide
- Pull slide part 1
- Pull slide part 2
- Business model slide
- Go to the market/customer funnel slide
- Client rating and net promoter score
- Market slide
- Team slide
- Thank you slide
Three things to love
What can you do to gain a foothold in the market? What are your marketing and customer acquisition channels? This question is only partially answered by Careerist, and that worries me a bit
This deck sets off some alarm bells for me – I’ll explain why in a moment – and I imagine the founding team put up an uphill battle to throw this in front of investors. That said, the company did continue Y Combinator and claims it was successful in raising an $8 million round cathex, Exploration, Cold start businesses, Grant Park Ventures and others. Let’s see if we can find some clues as to why the company caught the attention of these investors.
When you have traction, nothing else matters
[Slide 5] Traction is king. Image credits: Career maker
Traction really does solve any problems a company might have. It’s pretty impressive to build a company that grows from half a million dollars to $12 million in revenue in four years, especially considering that the company has so far, according to its own press release, had raised only $1.2 million in capital. As it turns out, turning $1.2 million in investments into $12 million in revenue is enough to get investors’ attention.
Extraordinary customer acquisition
To generate this much revenue, you have to find your clients somewhere, and Careerist seems to have cracked that nut:
[Slide 8] That’s some serious growth hacking right there. Image credits: Career maker
On the slides, the company claims it gets 35% of its traffic organically and another 25% from referrals. Those are two extremely powerful, low-cost acquisition channels that can attract extraordinary, high-value customers. But that’s a double-edged sword. Referrals generally scale well with other channels: if you get an average of 0.2 referrals per customer and you get 10 customers, you get two “free” customers because of referrals. The challenge is with organic traffic, which is much more difficult to scale on demand. In other words, once you close an $8 million round of financing, how are you going to drastically accelerate your sales?
It does not specify whether the other channels (Google, webinars and Facebook) are paid acquisition channels. If so, I expect here the acquisition cost (CAC) and an analysis of whether these customers also eventually refer additional customers. But overall, there’s a lot to love about this slide: finding 1,600 customers paying you more than $12,000 each (see slide 7 in the slide deck below) is objectively impressive.
The cool thing is you can feel those numbers: The company claims it has 1,600 customers and generated a total of $19 million in revenue. That works out to about $12,000 per customer, proving that the numbers are internally consistent.
That is a huge market size
[Slide 10] E-learning is huge, finding jobs is popular and hiring the right staff is crucial. That’s all right Image credits: Career maker
Careerist is in a curious space here, with a huge opportunity; in fact, if the company didn’t see extraordinary traction and longevity value (LTV), these numbers would be hard to believe. But with traction in place, these numbers seem more or less plausible. Besides, in really huge markets (recruiting, training, etc.) market size is essentially just a checkbox.
An example of this is toothpaste: there is no doubt that there is a huge market for it, and no investor will argue with you about it. The question instead becomes, what can you do to gain a foothold in those markets? What are your marketing and customer acquisition channels? Careerist only partially answers those questions, and that worries me a little.
The above are some of the positives in Careerist’s pitch deck, but unfortunately there are also a few Texas-sized red flags that make me question how the company was successful in raising money in the first place. I suspect the answer, as I stated above, is because of the traction. In the rest of this teardown, I’ll look at three things Careerist could have improved or done differently, along with the full pitch deck.
