Pitch Deck Teardown: Xpanceo’s $40M seed deck

Xpanceo is betting big on us becoming cyborgs equipped with smart contact lenses, securing $40 million to make our sci-fi dreams a reality. Co-founders Roman Axelrod and Valentyn S. Volkov are on a mission to ditch traditional gadgets and make new screens eye-catching. Who needs a smartphone when you can blink to navigate? As they push the boundaries of what’s possible with optoelectronics and new materials, we can’t help but wonder if we’re heading toward a future where losing your contacts could mean missing your next Zoom meeting.

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Slides in this deck

Xpanceo shared its full presentation, consisting of 19 slides, with TechCrunch. Although the list of slides suggests the team has covered everything, a closer look at the content of the presentation reveals that some areas might not be as comprehensive as they appear.

1. Cover slide
2. Challenge
3. Solution
4. Product
5. Value proposition
6. B2C: use cases
7. B2B: sectors
8. Traction
9. Contact lens users
10. Market size
11. Revenue Forecast
12. Competition
13. What is Xpanceo? interstitial
14. Preview
15. Technologies
16. Pioneering R&D in optical analysis
17. Team
18. Roadmap
19. Closing slide

Three things to love about Xpanceo’s pitch deck

There’s a lot of really good storytelling here.

A slice of history

The presentation effectively begins with a clear problem statement, paving the way for a focused discussion on the challenges and opportunities in the field of augmented reality (AR) and wearable technology. This explanation is crucial, because it immediately defines the problems that Xpanceo addresses with its innovative smart contact lens project. By articulating the issues up front, the presentation ensures that the audience understands the context and importance of the technology being developed, which is key to garnering support and enthusiasm for the project. I like this.

The presentation’s inclusion of a timeline detailing the evolution of computer technology is particularly clever. This historical perspective not only informs the public about the progression and milestones of computing, but also situates Xpanceo’s work within a broader narrative of technological progress – and many of these advancements have indeed made many investors very wealthy.

What’s wrong with AR?

Addressing the shortcomings of AR as it is, the presentation acknowledges that the technology has yet to achieve widespread adoption, primarily due to poor product offerings that have failed to resonate with consumers. This is true and shows that Xpanceo is aware of the obstacles faced by previous AR technologies and is committed to overcoming these challenges.

(Slide 3) Focusing on the “solution” is a great approach. Image credits: XPanceo

There is a big difference between a “solution” slide and a “product” slide. Xpanceo’s perspective here is refreshingly clear on the differences.

The solution slide is strategic in nature, emphasizing a broader, more adaptable approach rather than focusing solely on the product. This strategic mindset is crucial because it shifts the focus from product specifics to the underlying problem-solving philosophy.

I like that the solution is articulated in a clear and accessible way, deliberately avoiding excessive detail. This clarity is essential for communicating effectively with stakeholders, including investors, potential customers, and team members. By keeping the solution simple and easy to understand, the team ensures that everyone involved has a solid understanding of the main concept and goals. This level of transparency promotes trust and alignment between all parties, which is important for collaborative efforts and overall project success.

From there you can get into the details: the product.

Here is what the company offers In fact until

Once again, Xpanceo does an excellent job:

(Slide 4) This slide attracts investors. Image credits: XPanceo

The product slide does a great job of presenting the product in a clear and engaging way, avoiding the common trap of falling into overly technical language that can alienate or confuse the audience. This approach is particularly powerful given the complex nature of the technology involved.

Smart contact lenses that integrate advanced computing capabilities directly into the user’s visual field seem like magic. However, by keeping the language simple and accessible, the slide ensures that the innovation can be understood and appreciated by a wide audience, which is crucial for generating interest and support from potential investors.

I especially like how this clarity helps set the stage for deeper discussions, all without getting lost in the complex technological language that undoubtedly happens in the lab. It strikes the right balance between simplicity and informative content.

Three things Xpanceo could have improved

This deck is really good. But is it perfect?

No. Let’s go.

What are you raising?

What? Image credits: Getty Images

The biggest problem with the Xpanceo deck isn’t what’s in it, but rather what’s not in it.

One critical element missing from the filing is the “ask” slide, which is essential when seeking venture capital funding. It’s surprising how often founders neglect this element in their pitch decks. When fundraising, this is not the time to be reticent or indirect. Clearly articulating what is required – whether staff, resources or partnerships – demonstrates to potential investors a well-thought-out plan and a serious commitment to the startup’s future. This helps investors quickly understand needs and assess whether they match their investment criteria.

Including a specific request in the presentation also indicates that there is a realistic understanding of what the startup needs to succeed. This shows that careful consideration has been given to the amount of funding needed, how it will be used and how it will help the business achieve its goals. This level of detail and transparency adds credibility to the narrative and inspires confidence in potential investors regarding management and planning capabilities. It positions entrepreneurs as serious individuals who do not just experiment but are committed to building a sustainable business.

B2B or B2C: you can’t have both

Slides 6 and 7 make the case for a B2B and B2C model. This is not a good decision.

(Slide 6) Brainstorming use cases is smart, but it’s important to come up with the actual use cases that drive the investment decision. Image credits: XPanceo

B2B and B2C business models are fundamentally different beasts. Very few businesses are able to succeed with just one strategy, let alone both.

B2C sales are distinguished by direct interactions with individual consumers, focused on emotional engagement, brand identity and creating personalized customer experiences. This model thrives on short sales cycles and immediate purchasing decisions, making it crucial for businesses to invest in understanding consumer behaviors and developing marketing strategies that resonate on a personal level. Even though businesses occasionally purchase in a B2C model, they must be treated as consumers in the sales process to keep marketing efforts simple and effective.

Conversely, B2B sales involve more complex transactions with other businesses, characterized by longer sales cycles, higher transaction values, and a focus on practical benefits and profitability. This model requires strong, credible relationships and often involves customized solutions to meet specific business needs. Although less common, consumers can sometimes interact with products designed for professional use, highlighting the flexibility required in sales strategies. Ultimately, a focus on a B2B or B2C sales organization should align with the startup’s core capabilities and strategic goals, shaping the narrative of its startup pitch to attract potential investors.

Trying to do both won’t work, so choose one and explain why it’s the right choice.

The market size fallacy

(Slide 9) Of course, there are many contact lens users. But are they really a proxy for Xpanceo clients? Image credits: XPanceo

When assessing the potential market size of Xpanceo contact lenses, it is crucial to differentiate the nature of the product from traditional contact lenses. Or, put another way: is the market for Xpanceo products aimed at people who already wear contact lenses? The company seems to think that everyone who wears lenses wants smart lenses. But that’s probably not accurate.

Xpanceo’s offerings are not simply an alternative to glasses for optical correction, but rather function as a wearable device. This distinction is important because Xpanceo’s target market may not directly correspond to the existing contact lens user base. Instead of assessing the total number of contact lens wearers, a more relevant metric might be the use of related technologies such as smartphones or smartwatches, which reflect a tech-savvy consumer base more likely to adopt new wearable technologies. This approach can help identify not only a broad audience, but also an audience more likely to adopt innovative products.

Xpanceo’s marketing strategy plays a central role in determining its core consumer segment. If the product is designed for mass consumption, the strategy should focus on identifying and engaging a group of early adopters. This group is typically made up of technology enthusiasts eager to explore and adopt cutting-edge technologies. These early adopters could provide the initial traction needed to enter the market, acting as influencers and validators for a broader consumer base. Their feedback is also invaluable when it comes to refining the product and boosting its appeal to subsequent buyers.

I think the company is trying to show that its market is huge, but I doubt contact lens wearers are a substitute. I wear contact lenses, but only when I play contact sports (martial arts or scuba diving). But even if I never wore contact lenses a day in my life, I would be eager to try the Xpanceo solution.

I think the company is trying to compare oranges to Apple computers.

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