This is the Predictive Index pitch deck to raise their growth round in 2019. The round was led by General Catalyst.
The Predictive Index offers tests that allow companies to assess the personalities of their executives/employees. The tests, distributed through a network of partners (They grew the network from 47 to 160 partners), are designed to be used to help companies hire the people whose personalities best fit their culture or needs.
This is a funny one in that the company is 65 years old! Mike Zani and Daniel Muzquiz bought this personality testing company in 2014 with the idea of turning it around. They were customers for 10 years and believed the company had value. Things went better than they expected and they were growing at 40% a year. So why not grow faster?
Their focus is on “how do we turn this into a multi-billion dollar revenue company,” Zani said, “because the total addressable market could easily support that.”
Serving more than 8,000 clients across 142 countries and delivering solutions in 77 languages, PI Worldwide empowers business leaders to truly understand what drives workplace behaviours. There are over 50 PI Worldwide Member Firms accounting for over 450 consultants across the globe who help businesses thrive by offering PI Worldwide’s products and services.
With scientific validation and a 60-year proven track record, our proprietary Predictive Index® system functions as the heart of our behaviour and skills assessments, people analytics software, and instructor-led management workshops. Business challenges big and small are no match for our unique approach to client education and knowledge transfer, which ensures swift adoption, direct ROI, and high impact on performance metrics.
Each year, 3 million PI assessments are administered and over 7,000 professionals are trained in our workshops. Visit www.piworldwide.com to learn how our solutions can help you find and select the right talent, reduce employee turnover, develop managers and leaders, and increase employee engagement.
They have done one round of $50m (in recent times). They were founded 65 years ago.
Pitch deck review summary
This deck is very strong in a number of ways, but it is also a little hard to follow and requires the reader to invest some time.
It is very apparent that the team really know their business and are smart. They probably were consultants. They generally structure their thoughts in a fantastic manner and insert cogent points. There is certainly a lot to learn.
My bet is that this is only a part of the deck.
Structured summary review
The amount of words per slide is decent. There is generally enough to get their point across. Sometimes there are not enough words and a few more would enable the reader to get more insight.
They don’t write any paragraphs, and generally, everywhere they use bullet points.
The deck is 15 slides. There are a lot of pointless interstitial slides. My guess this is because the real deck is longer. Ergo, I can’t really give you any insight on this point.
They do a much better job than most startups with their headers. The headers are the first things an investor will read (and maybe the only thing) so they are key. Headers are also key in communicating a narrative.
I have three levels of quality headers:
- Slide title: Founders copy the Sequoia outline without understanding they are not just meant to write ‘problem’
- Highlighted title: The slide header lightly calls attention to the core point but doesn’t explain why. ‘Productivity is the holy grail’
- Explained problem: The slide is fully explained so you understand the content without reading. ‘Staff that want to work are 17x more productive than staff who feel they simply have to work’
The Predictive Index are in camp 2. They make an effort, but don’t make enough effort to make reading the deck effortlessly.
Headers are so important for comprehension. I’m writing a book on pitch decks- I should just call it ‘do headers better’.
It looks solid. It’s not all that consistent, though. Your deck only needs to be so attractive so don’t obsess too much.
The deck is a bit of a funny one. The deck does flow and has a narrative of sorts, but it is not as simple as it could be.
Things are generally aligned well. Occasionally it needs to be improved. They should really have headers whenever they use charts to explain them better. Slide 4 is a good example- I can only guess what the graph on the right means.
They don’t cover all the slides that they need to, but I’m pretty sure this is only part of the deck, so my stating what is missing isn’t terribly apt.
Slide by slide review
There is no need to write ‘company overview’. Delete that. Use a tag line instead.
I have no idea what the point of this slide is?
This is an old, established company. They aren’t trying to prove that their business model is viable like most startups. Their deck is to get money to expand. This means that their deck is going to be different to normal decks.
They start out setting out what you need to understand and believe in to invest in this company. I would have at least had a quick intro to what the company does, but anyway. They don’t really write enough for this deck to be read and comprehended stand alone, but I guess there is enough for investors to say “Don’t really understand it all in detail, but it sounds logical, so let’s have a chat and get into the details.”
Unique business model (whatever that is), channel distribution, category strategy and TAM all make sense. Not sure about the tea and culture style?
This slide is a little hard to understand. There should be headers on top of the chart to explain. They have lobbed in Net Billings on the side. I don’t know what the graph on the right is supposed to be, but I am going to guess it is profits?
They invested in the company assuming that there would be modest growth, but based on their experience and forecasts, they are achieving exponential growth. I am guessing that the graph on the right shows that they make less profit in the first years but then it will trend up over time after a trough.
I am guessing that 5 and 6 are meant to be flow. So we first see what they invested under the assumption of what this business but then realised it was actually something different.
If you can write a good investment thesis, feel free to include in your deck for investors, only not many founders are capable of doing a good one.
Their thesis is based on three factors:
- Market: It’s a large market
- Competition: They can win
- Value: They can make money
Read the variables. They are instructive in how you should think about your industry and the dynamics. These guys give the impression that they are smart and really think about the key value drivers in their business. This is a really strong slide.
This is a lame slide as there is no support. There is just a statement. They believe that the business is actually about talent optimisation. They explain this on the next slide.
I find this slide hard to understand. I have to spend some time reading to figure it out. I’m guessing it means that managing and growing a company is more than just about hiring people. I don’t really know to be honest.
This slide isn’t obvious in its point either. Obviously, staff that work hard are better than those that don’t. So if you hire people who are motivated you get better results.
This slide is likely about a pivot. They aren’t just about assessing staff, they are about optimising the organisation. That is bridging business strategy with business outcomes through the hiring and structuring the human resources of a firm.
There are no headers to explain the slide.
They repeat part of the previous slide. I don’t know why.
They ‘sort of’ explained the value of the ideal manner of structuring a company, now they explain the solution. This slide is pretty good actually. See that they add in actual data points (I love data in pitch decks!) such as the 27m test completed and the 60 years of data they have collected.
70% of the money comes from annual SaaS fees and 30% from running workshops, which apparently happen regularly.
They then explain that their software is delivered and supported by over 125 partners (who have been certified).
They keep using interstitial slides. I find this annoying. You only need slides like this to break a long-ass deck. Pitch decks are never long enough to warrant that.
Market sizing slides are always difficult and there is no one best way. The TAM, SAM, SOM is a common one.
Often with enterprise type companies, I see the break down the opportunity into sectors, of in this case by groupings of company size by staff.
They map out 9 categories of staff from 1 to over 1000. For each, they have a number of businesses. They then set out the areas that they are focused on. To make this better you would add the $ value.
The shading is a bit misleading as the light blue is actually all the 20+ staff companies of 1.1m. They are focused on the 100+ companies.
Point is that in the US alone there are over a million companies to sell to.
I don’t quite understand this slide. It’s sort of a repeat of the above slide. And there are no footnotes for 1 and 2 so I am guessing they scrubbed the deck before making it public. They allude to growing the opportunity through their channel sales.
Yet another interstitial slide…
Their slides annoy me sometimes. There is good content but they make it too hard to really understand things quickly. You have to read to understand properly which is effort. There is a bit too much text.
They are explaining that businesses need to align business strategy with talent strategy. On the Y axis, they spell out tactical and strategy. On the X axis, they have process and people. I presume that this has come from some strategy book. They placed themselves in a strategic and people box which is called talent optimization. To put They’re positioning into perspective they have some details about the competition. Companies that look to replicate them also known as foster followers will need to have core competencies that are not common, which includes a network of consultants to deliver and some scientific validation to prove that the test actually works.
They then explain that the other categories of competition do not quite deliver on what a company needs and why. All in all, this is a decent slide and it goes to illustrate that the team are critical thinkers.
The deck then abruptly ends with no slides such as how much they are raising. My guess is that this is only a part of their deck and there is a lot that they removed.
What do you think about the deck?
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