Careerist claims it closed an $8 million round of funding with a tight package of 12 slides, and gave us a batch to learn in the process. Not all in a good way, but I’m getting a little ahead of myself.
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Slides in this deck
The team sent out this slide deck, with the note that it was sent out exactly as presented to investors.
- deck slide
- mission slide
- problem slide
- solution slide
- Traction Slide Part 1
- Traction Slide Part 2
- Business model slide
- Go to marketplace/customer funnel slide
- Customer Rating Slide & Net Promoter Score
- market slippage
- 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? Careerist only partially answers this question, and that worries me a bit.
This deck rings a number of red flags for me (I’ll get to why in a bit) and I imagine the founding team fought an uphill battle to get this out there to investors. Having said that, the company did go through Y Combinator and claims that he was successful in raising an $8 million round of Investment, exploration, cold start companies, Grant Park Businesses and others. Let’s dig in and see if we can find some clues as to why the company caught the attention of these investors.
If you got traction, nothing else matters
[Slide 5] Traction is king. image credits: careerist
Traction truly solves any problem a business may have. Building a company that is growing from half a million dollars to $12 million in revenue in four years is pretty impressive, especially given that up to this point, according to its own press release, the company had raised only $1.2 million of capital. It turns out that turning $1.2 million of investment into $12 million of income is enough to grab investors’ attention.
Extraordinary customer acquisition
To generate that much revenue, you have to find your clients somewhere, and it looks like Careerist cracked that nut:
[Slide 8] That’s a serious growth hack there. image credits: careerist
In its slides, the company claims that it gets 35% of its traffic organically and another 25% from referrals. Those are two extremely powerful, low-cost acquisition channels that can lead to extraordinary, high-value customers. But that is a double-edged sword. Referrals generally scale well alongside other channels: if you get 0.2 referrals on average per customer and you acquire 10 customers, you get two “free” customers due to referrals. The challenge is in organic traffic, which is much harder to scale on demand. In other words: once you close an $8 million round of financing, how will you dramatically accelerate your sales?
It does not specify whether the other channels (Google, webinars, and Facebook) are paid acquisition channels. If so, I would expect to see the cost of acquisition (CAC) here and an analysis on whether these customers end up referring additional customers as well. But overall, there’s a lot to love about this slide: Finding 1,600 clients paying you over $12,000 each (see slide 7 on the slide deck, below) is factually impressive.
The good thing is that you can feel like you check those numbers: The company claims it has 1,600 customers and has generated cumulative revenue of $19 million. That works out to around $12,000 per customer, which shows that the numbers are internally consistent.
That’s one hell of a market size
[Slide 10] E-learning is huge, finding a job is popular, and hiring the right staff is crucial. all that adds up image credits: careerist
Careerist finds himself here in a curious space, with great opportunity; in fact, if the company were not seeing extraordinary traction and lifetime value (LTV), these numbers would be hard to believe. But with traction in place, these numbers seem more or less plausible. Also, in truly huge markets (hiring, training, etc.), market size is essentially just a checkbox.
An example of that would be toothpaste: there’s no doubt there’s a huge market for it, and no investor will argue with you about it. Instead, the question is: 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 bit.
The above are some of the positives on Careerist’s pitch deck, but unfortunately, there are also some Texas-sized red flags that make me wonder how the company managed to raise money. I suspect the answer, as I mentioned above, is due to its traction. In the rest of this teardown, I’ll take a look at three things Careerist could have improved or done differently, along with their full presentation.
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