There’s a stark contrast between Oura’s deck and the others we pored through on Extra Crunch Live. The slides CEO Harpreet Rai brought to the event were the clear output of a more mature and confident company seeking out its Series B. It’s a company with a focus, aware of where it wants the product to go and do (and it went there, announcing a massive followup round on Tuesday).
Then there’s that giant image of the Duke and Duchess of Sussex, with the company’s smart ring adorning Harry’s right hand. From there, it’s a parade of celebrity faces: Will Smith, Lance Armstrong, Bill Gates, Arianna Huffington and Seth Rogen, to name a few.
It’s clearly been a wild half-dozen years since the company was founded. Rai joined up in 2018, not long before the company embarked on its $28 million Series B. Forerunner General Partner Eurie Kim got on board during the round.
“[I] enthusiastically took the meeting and Harpreet shared his story and the story of Oura. The deck is what we talked through,” says Kim. “Because I was a consumer, it was just a no-brainer that I knew what he was trying to build. So we were very excited to lead the round.”
Kim and Rai joined us on Extra Crunch Live to discuss the process of taking Oura to the next level — and beyond — as the product found a second (or third) life during the pandemic through partnerships with sports leagues like the NBA. And as we’re wont to do, we asked the pair to take a look at a handful of user-submitted pitch decks. If you’d like your deck to be reviewed by experienced founders and investors on a future episode, you can submit it here.
On the hardness of hardware
By the time Oura sought out its Series B, the startup had already progressed pretty far. Kim compares the first-generation product (circa 2016 — predating both Rai and Kim’s time with the company ) to a “Power Rangers ring.” You’ve got to start somewhere, of course — and if nothing else, the admittedly bulky original edition of the product served as a powerful proof of concept.
“With hardware, it’s so difficult. There are so many steps,” says Kim. “You have to prove there’s a problem you can solve with this hardware device, but you have to make the device and then the device has to be produced. There’s all these steps. Harpreet came to that pitch meeting having completed the steps where the product was ready to come to market.”
Rai, too, started as an investor in Oura, well before joining up as CEO. He says his interest was driven, in part, by his own background in electrical engineering. “I felt like wearables are eventually going to keep evolving from activity trackers to something that’s more holistic on health,” he explains. “Something that everyone can use and that everyone will need.”
Finding your focus
Beyond the pitch deck’s relative maturity, the thing that struck me was focus. After all, the Oura Ring has, at times, been positioned as a fitness device. Specifically, it’s something that can do the sort of step tracking that wearers have traditionally looked toward bands and smartwatches for.
But the Oura Series B was, simply put, all about sleep.
“I think defining your problem is even more important than defining your solution,” Rai laughs. “The reason for that is if the problem is big, there’s going to be many evolutions of the solution. In fact, it’s so big, you may find a better part to attack in that category. Most people, when they see this would be like, ‘No way. You’re telling me that more people are Googling sleep than they are running? [ … ] There’s a market need here that’s actively happening, even as we speak.”
It sounds like overly simplistic advice — but sometimes the best advice is also the simplest.
“You know how many steps you walk every Tuesday, based on what you did. Nothing really changes. Once you realize after two weeks of wearing whatever tracker you pick that it’s the same, you stop wearing it. With Oura, every night is different, based on what you ate, how you slept, when you worked out, what you’re thinking about. We think about this from an investment standpoint: You’ve gotta get something first. And then, if it works, what else can it do? That’s the ‘Tell me what you’re doing today and then dream big with me.’”
The pitch deck teardown
Each week we do a teardown of three to five viewer-submitted pitch decks. If you would like to have yours scrutinized under the microscope by top VCs and entrepreneurs, you can submit it here.
Here are some of the key takeaways from this week’s exercise.
How do you know how much money you should target for a raise?
Even if we’re at negative gross margin now, how can we get it better? What are the steps we’re going to take? And how long will that take? Those two things, along with the team you’re going to need to make it happen, determines how much money you’re going to raise.
When we look at thousands of decks a year, we ended up having a better sense for what your financial model is going to look like than you might even, if it’s an area that we’ve seen a lot in. What we’re looking for is, number one, do you know the levers of your business? And do you understand where there are risks, where there is some room, where you need to be smarter than the next company to win?
Be clear, right out of the gate
[It’s] too much intangible stuff and jargon. It’s hard to figure out what it is. Is it WebMD or better? Something else? You don’t want to lose people from the get-go, having to wonder, ‘Wait, what are we talking about right now?’
Does a deck need to be clear enough to stand on its own?
I think every founder I know thinks that their decks are shared a lot more. I don’t feel like that, but I know that comes from experience. But many times, you have to send the deck in advance. I’ve got to flip through it, read it and understand if it’s worth taking a meeting because I think I’m the right investor to process it. So, you do need it to read logically such that anyone can pick it up, read it and know it may or may not be for me.
How much information does a pitch deck need?
Ideally, you’d want people to say, ‘Ooh, this is interesting. I’d like to talk more.’ That’s the pitch deck. It’s not to say, ‘Here’s every waking detail about my company; invest now.
Extra Crunch Live streams every Wednesday at 3 p.m. EDT/noon PDT. To submit your pitch deck and be featured in a future episode, hit up this link. A complete library of past episodes can be found at techcrunch.com/ecl.