Webroot – Problem and solution attract further inquiry
GENERAL REACTION TO PITCHES
I watched two dozen pitches on silicon.com and noted my reactions. I need a clear description of the problem. I don’t care about lists of features, jargon or broad, vague claims without specific use cases. I don’t trust pitches that claim to be the solution for everyone. I want to understand how the venture is focusing on a strategic niche to fill a gap in the existing market.
WEBROOT
Webroot provides security through a Software as a Service (SaaS) model:
http://www.silicon.com/videos/view/sixty-second/60-second-pitch-identity-verification-60725972/
Ian Moyse, Director of Channel Sales, doesn’t project enthusiasm but his calm, matter-of-fact style feels sincere.
He describes the pain point: companies must reduce IT costs while maintaining services such as email and web access that make them susceptible to security threats. Security threats have increased by 500% and maintaining security protections in-house is complex and expensive.
He describes his solution at a high level: an outsourced Software as a Service (SaaS) that secures email and web services while reducing IT operating costs by 60%.
This pitch is meant for CIOs, so Moyse does not address marketing, team, or financing.
During the Q&A, he describes his service as an integration of third party services and software. His “competitive advantage” against other SaaS suppliers is the cheaper costs and higher security he achieves by negotiating with his suppliers. His market is companies who handle complex security internally and he lists recognized customers.
REACTION
Webroot represents an investment target for growth as security is increasing in complexity and costs. If they are reliable and keep up with security threats, they represent an easy way for any company to offload email and web security.
INVEST?
The short-term risk is low due to established customers and revenues. The long-term risk is high because Webroot sources products and services from third parties and has little intellectual property or strategic value. What happens if someone buys one of its suppliers? Webroot is probably a poor investment for a venture capitalist who wants a big exit. It may be better for a subordinated debt lender who agrees to fund growth based on the company’s ability to pay back through revenues.
Posted in: Week 03: Analyst Bootcamp
bcourey 11:27 am on September 22, 2011 Permalink | Log in to Reply
Wow! 2 dozen pitches viewed? That would really give you a sense of what is working and what is not. I watched a few video pitches prior to this discussion and was amazed at the poor quality of some of them…what were they thinking? As for your review of Webroot, I was intriqued at first as you described the main ideas of the pitch…but you make a good point at the end about long term risk..you are right – it is not worth the risk to have to replace your software later when budgets are unpredictable.
Jay 11:32 am on September 22, 2011 Permalink | Log in to Reply
You chose a great pitch to review and I agree that while Ian Moyse doesn’t project a whole lot of enthusiasm, he clearly outlines a problem that his company can solve and provides pin-point answers to every question asked to him by the panel. He displays confidence through his composure and knowledge base. In my opinion, one of the better pitches on this site. Thanks for sharing your critique.
Kristopher 2:40 pm on September 22, 2011 Permalink | Log in to Reply
Moyse definitely came into his own answering the questions, but he was fairly nervous during the sixty seconds (which is fair enough). I think his credibility increased substantially as the Q & A continued.
I didn’t get from his description of the gap what his team brought to the table; I am not convinced that his company is the best one as there are many external IT companies out there. It may be that I didn’t understand how his was different, but in that 60 seconds, I would have turned away.
Thanks for the post!
Karen Jones 3:46 pm on September 22, 2011 Permalink | Log in to Reply
Your analysis shows insight and a familiarity with business investor strategy, David. I am really glad you are in our group 11! Illuminating points to consider.
KJ
ifeoma 9:03 pm on September 23, 2011 Permalink | Log in to Reply
Two dozen pitches? impressive. i do like how you presented our thoughts by first giving a general summary of the pitches, focusing on a pitch and and itemising your comment on it. You wrote, “I don’t care about lists of features, jargon or broad, vague claims without specific use cases.”
I must say that some of the pitches were focused on features -that was my issue with Evernote, and I found that did not impress me either. On the other hand, jargon i think can swing either way, make or break depending on the audience. I too think that there were a lot of vague claims too and e.g, WEbook and Edufire.
On webroot, I think the presenter sounds like he understands his product/service. I like that he identified pain points and the role expected of IT and narrowed in on that to present their competitive advantage. However, you have done a good job analysing the short term and long term risks showing some good insight on your part.
khenry 5:15 am on September 25, 2011 Permalink | Log in to Reply
Hi David,
Great points. I also, from watching the pitches, was able to zero in on the kind of information I find necessary and/or am interested in. I like to know features but as you said presented within the context of practical and specific use. Also, zeroing in on competitive advantage is essential.
A point you raised was the particular audience and that some elements were therefore not discussed. This is clearly context specific and so he knows they type of information to present for this target audience. However, can/should pitches be universal, particularly if they are presented via public media e.g. Youtube?
Kerry-Ann