Pitch Deck Teardown: Sumo Logic
This deck raised $5.8M in 2010. What can we learn from it?
In 2010, Christian Beegden and Kumar Saurabh co-founded Sumo Logic. Yesterday, September 17, 2020, a little bit over 10 years later, Sumo IPOed at a valuation of $2.17B.
In a blog post detailing the journey of the company, Greylock, one of Sumo’s historical investors, shared the original pitch deck that was used to raise $5.8M in 2010.
As you will see, the design of the deck is a little bit dated and uses too many default PowerPoint objects and settings.
The content, however, is brilliantly delivered and framed in a way that tells a compelling, valuable story.
There much to learn from this deck, so without further ado, let’s dive in.
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1. Title slide
This title slide has many defaults, but one redeeming quality.
On the negative side, it lacks:
The company name. In their defence, they didn’t have a name yet and had to come up with one to secure their financing! Next time you hesitate on a name for three months, remember this.
The logo. They didn’t have one.
Clear branding. There was no brand, and you could argue that for a B2B service, branding is little less of an issue.
The purpose of the document. It’s standard practice to explicitly write the purpose of the document on the title slide (Seed Round, Investor Deck, Series-A Deck,…).
On the bright side, however, it delivers the value proposition of the company in clear words. The title would work very well as a slogan under a Sumo Logic logo.
This is something that is not often included in a pitch deck. Some people argue it uses up a slide for nothing, others say it helps the reader navigate the document.
My opinion is to avoid a table-of-contents slide if your deck is short (10–12 slides) and meant to be presented/read through fast. If it’s a longer document meant to be read and thoroughly discussed, a TOC helps.
I like this slide a lot. It acts as a movie trailer for the rest of the deck.
VCs are known to read through documents at an inhuman pace. They spend on average 3'45" per deck, which means around 15 seconds per slide.
If you want them to read on, you need to capture their attention with a strong message and large numbers.
That’s exactly what this slide achieves.
It tells us:
- What Sumo does: manage and analyse IT logs;
- The market size: $2.5B;
- The Unique Selling Points: easier, cheaper, smarter;
- The quality of the team, ie “we’re the best to execute this”;
- What they’re looking for: a series-A investment;
To the point.
Just like in the Opendoor pitch deck I analyse after their IPO 4 days ago, Sumo starts with the team, showcasing key achievements in the field.
This is important for 2 reasons:
First, it’s the greatest asset they have at this stage. Before you have a financial track record, the founders and the team are what matters to investors. They need to know that you can build the project, evangelise the vision, and execute properly. Your entire corporate storytelling revolves around you.
Second, it puts the reader in the right mindset. Once again, just like Opendoor, IT log analysis is a highly technical and specific sector. You want people with strong relevant experiences to manage the company. By proving this from the get-go, Sumo sets the tone and alleviates all doubts about the founders’ abilities.
5. Market Size
The usual slide order we see everywhere is Problem → Solution → Market Size.
Here, Sumo starts with the market size and it is a good strategic move in the way they want to tell their story:
“We have amazing profiles and we’re the best to take on this industry. By the way, it’s worth over $2B today with companies like Microsoft, Cisco, and Splunk already in it.”
Highlighting competitor names this early is a good way to anchor the value of your company to that of respectable peers. It also shows that this market must be desirable.
The text box about Key Drivers is placed here to elegantly segue into the next slide that will bring data to back up the claim.
6. Key Drivers
This is a powerful slide on three fronts.
First, it backs the deck with a verified, credible source. Using a third-party research firm to validate your argument is a good practice and shows you’re not making up your numbers or passing your opinion as fact.
Second, it hints at potential customers. A survey of 1,335 North American and European companies highlighting why they purchase services like Sumo’s is a perfect way to demonstrate that people are willing to spend money on such services.
Third, it shows how serious the problem is. The first two reasons include the words compliance and incident, both domains where companies will not look to compromise on quality and efficiency. It indicates that Sumo will be able to command a high price point.
7. The problem
The problem is presented in a way that already hints at the solution Sumo is developing.
By outlining problems one by one in simple sentences, the reader easily understands the limitations of the current offerings and starts imagining how it could be done better.
I would argue this slide is too verbose, the phrases used to name the problems are self-explanatory enough.
8. The solution
Sumo boldly presents itself as the Next Generation. It shows confidence, and also makes a nice reference for all the Trekkies who will read the deck.
Each point of the solution directly addresses a problem. This is reinforced by the slide layout.
All facets of the solution delivering Sumo’s promise in one simple (yet a bit jargony) sentence.
Once again, I think it’s too verbose but it does the job of outlining a complete solution to a complex problem.
9. Target clients
While I understand the reason to put the market size after the team slide, this one now feels a little lost. Market Size → Potential Clients is a more logical and seamless transition.
Notwithstanding (and ignoring the PowerPoint shapes) this does a good job of highlighting:
The customer acquisition strategy. First SMEs and departments before targeting larger companies and how Sumo intends to approach them.
The sales pitch arguments, centred of course around the pain points identified as key drivers in slide 6.
10–18. Tech description
I won’t address this part as I don’t have technical knowledge of the issue.
Nonetheless, this part feels too long and heavy for a pitch deck. This is information that is better suited for a technical addendum and would have been better presented as a few simple sentences.
19. Unique Selling Points
This is a great slide!
The numbered bullets tie back to the solution slide and to the technical description, which is nice for continuity.
Describing in more details how each of your USP delivers value to potential customers is something too many startups fail to achieve (often because they don’t know how).
Once again, the order of the slides feels a bit off, with competitors suddenly jumping back right in. I’ll address this in the conclusion.
The way it presents the data is interesting though. By using a comparison table instead of the overused magic quadrant, this chart feels less subjective and more like a real analysis.
The comparison is factual and positions Sumo (still unnamed in the slide) against great companies. This makes the market look exciting for investors.
I would have differentiated the Sumo column using another colour, to emphasise the difference visually on top of the content.
21. Go to market
I’m gonna take a bet here and say that Christian and Kumar were not highly focused on marketing :)
This slide, simple though it is, still does the job of explaining a broad strategy, but it fails to assert a clear marketing and sales strategy.
However, with the technical quality of the team, this should not be (and hasn’t been) an issue. Skills can be hired.
This slide is supposed to answer the question: “How do you make money?” and it does so clearly and enticingly (it might be too jargony and acronym-heavy for some).
Contradicting the statement by Boundless CEO Xiao Wang that “A startup is a company that has more questions about its business model and sustainability than answers,” Sumo demonstrates that it knows how it will make money and already has defined a range of tiered services to offer.
While the go-to-market felt a bit rushed, it’s clear a lot of work and strategic thinking has gone into this slide.
By including industry comparables, Sumo also proves its financial projections are not out-of-whack.
We’re back to the surprising slide order, with a product roadmap slide. This one would be better suited next to the go-to-market.
I would have integrated both slides in one titled “3-Year Plan”, detailing the 3 phases of the tech development and the marketing and sales initiatives undertaken at each stage.
Ending on a recap of the main points of the deck is good, but the founders have forgotten something quite important in their presentation.
Can you guess what it is?
Sumo’s 2010 pitch deck is the work of brilliant technical minds focused on their product. It does a great job of proving that the team knows what it’s doing, that they’re the right people to execute the roadmap, and that they know how to make money once the product is running.
It demonstrates a few gaps in terms of sales & marketing and suffers from a bizarre slide ordering.
The X-year strategic plan ahead should be more detailed and cover:
- The product roadmap
- The sales & marketing initiatives
- The HR needs
Finally, it lacks a fundamental slide (I hope you guessed it right)… the financing needs. Nowhere do the founders talk about how much capital they need and how they will use it, and this is a mandatory slide for a pitch deck.
The fact that Christian and Kumar got such an investment from talented VCs without clearly stating what they were looking for is a testament to their ability and confidence.
To finish, I would like to propose a re-ordered version of the deck that is more coherent, allows us to end on a strong punch line (the Economics slide).
I would also add a final slide titled Series-A Financing Proposal and outline both the need and the use of funds.