Coda Pitch Doc Insights: Shishir Mehrotra & S. Somasegar Reveal All

Coda's Journey and Market Positioning

Coda launched with a focused objective: to redefine the document experience. Established in 2014, the company has secured $140 million in funding and currently serves 25,000 teams worldwide, demonstrating significant progress toward its initial goals.

The platform’s simplicity stems from its core focus on the document – a foundational element of content creation and software history. However, Coda’s ambition is considerable, as it directly challenges established industry leaders such as Google and Microsoft.

Overcoming Competitive Challenges

Shishir Mehrotra, co-founder and CEO, explained to TechCrunch that intense competition hasn’t posed a significant obstacle. This is largely attributed to Coda’s ability to effectively articulate its value proposition and cultivate robust growth mechanisms.

Mehrotra graciously shared his pitch document – a comprehensive overview rather than a traditional slide deck – during a recent Extra Crunch Live session. He detailed the key elements contributing to Coda’s success and how these were presented to potential investors.

Insights from Extra Crunch Live

Extra Crunch Live also incorporates the ECL Pitch-off, providing a platform for founders in the audience to present their ventures to guest experts. Mehrotra, alongside Madrona partner S. Somasegar, offered real-time feedback on pitches delivered by audience members.

The complete conversation and pitch-off recording are available for viewing. This provides valuable insights into the perspectives of both an entrepreneur and an investor.

Event Details and Access

Extra Crunch Live is a weekly event held every Wednesday at 3 p.m. EDT/noon PDT. Participation during the live broadcast allows for networking opportunities with fellow attendees.

Access to recordings of past episodes, including this session, is exclusively available to Extra Crunch members. Interested individuals can join the community here.

The platform aims to be more than just a document editor; it strives to be a central hub for team collaboration and workflow management.

The Importance of Cultivating Investor Relationships

Prior to embarking on his own venture, Mehrotra had already established a connection with Somasegar, having previously worked alongside him at Microsoft. This relationship was sustained even after Mehrotra transitioned to Google.

Initially, their interactions revolved around exchanging insights regarding the Seattle technology landscape and navigating the complexities of specific teams within Microsoft.

“A common sentiment is that fostering relationships with investors is most effective when it’s not directly tied to fundraising efforts,” Mehrotra explained.

Subsequently, Mehrotra began developing Coda and continued to update Somasegar on its progress. He even presented his Series B fundraising proposal to him, which ultimately did not result in an investment.

However, the professional rapport between them remained strong.

“This pre-existing context proves invaluable when the time comes to discuss financing options,” Mehrotra stated.

Somasegar characterizes Mehrotra as a decisive individual who welcomes constructive criticism. “He possesses a well-defined perspective,” he noted.

During their initial funding discussions, Coda demonstrated promising growth and achieved product-market fit, but had not yet implemented monetization strategies. Mehrotra requested a six-month period to refine the product’s features and user experience.

He believed further development was necessary before launching monetization.

Somasegar encouraged Mehrotra to begin preliminary testing of monetization approaches.

“I require an additional six months,” Mehrotra replied, as recounted by Somasegar. This ultimately proved beneficial; another firm led the Series B round, allowing Mehrotra to specifically solicit feedback from Madrona, streamlining future interactions.

“The process of seeking investment provides valuable learning opportunities,” Mehrotra observed. “It’s crucial to absorb feedback and maintain communication, enabling a well-timed return. By the time we reached Series C, Madrona’s inquiries had been comprehensively addressed.”

Equally vital to nurturing relationships beyond investment cycles is a clear understanding of the dynamic between the company and its investors.

“Somasegar consistently offers assistance, regardless of investment status,” Mehrotra emphasized. “His willingness to support a company makes him a natural choice when compiling a list of potential financiers, with the expectation of even greater support.”

Core Messaging in Investor Communication

Mehrotra emphasizes that initiating discussions with investors should center around articulating the company’s overarching mission and core thesis. For Coda, this involved presenting two foundational convictions.

Firstly, despite the abundance of productivity and workflow applications available, a significant portion of professional work continues to be conducted within documents and spreadsheets. Secondly, the fundamental design of the document itself has remained largely unchanged for several decades.

“My approach is to begin by outlining key observations about the current landscape, the company’s central mission, and providing a preliminary experience of the product,” Mehrotra explained, referencing the opening page of his investor pitch document.

Coda deliberately chose to present its pitch using a document rather than a traditional slide deck. This approach aligns with Mehrotra’s objective of showcasing the product’s functionality directly.

Furthermore, Coda’s architecture is optimized for collaborative discussion and content manipulation, allowing for flexible presentation tailored to specific investor groups.

Presenting these core observations upfront serves as a crucial filter, identifying investors who share a similar worldview. However, after establishing this common ground, it’s vital to transition to information that directly addresses investor priorities.

Key Elements of a Successful Pitch

• Clearly define the company’s mission and thesis.
• Highlight fundamental observations about the market.
• Demonstrate the product’s capabilities directly.
• Adapt the presentation to the specific audience.

Effectively communicating these elements is paramount to securing investment and fostering a productive dialogue.

The Importance of Key Performance Indicators

For Coda, demonstrating company expansion was only part of the story; a central focus was placed on the metrics vital to realizing their long-term objectives.

Somasegar highlighted that, from an investor's perspective, observing upward-trending metrics is insufficient. He emphasized the necessity of aligning on the same key performance indicators (KPIs) that the founder monitors daily.

“Effective CEOs possess a thorough understanding of their business operations,” Somasegar stated. “They are keenly aware of the essential details and maintain consistent oversight. A founder’s chosen KPIs provide us with insight into their priorities.”

Both Mehrotra and Somasegar agreed that the significance of metrics escalates as a company matures. Consequently, early-stage ventures should prioritize explaining the rationale behind their chosen metrics rather than solely focusing on the numbers themselves.

Coda’s Growth Flywheel: The Black and Blue Loops

A key factor in attracting investment to Coda was the established growth flywheel. Mehrotra refers to this as the “black loop” and the “blue loop.”

The black loop mirrors the typical spread of a document-based software within an organization. A document is created, shared with colleagues who become viewers or editors, and subsequently, that individual creates their own document using Coda, continuing the cycle of sharing and adoption.

“This loop is comparable to the dynamics seen with Office or Google Docs,” Mehrotra explained. “It represents the inherent virality of documents, driven by the core actions of sharing and creation. Once initiated, this loop gains momentum rapidly.”

The blue loop differs in that it involves sharing documents publicly, extending beyond the confines of an organization. Users can publish documents on Coda with the same ease as internal sharing.

Mehrotra draws a parallel to publishing a video on YouTube, a platform where he previously worked. He noted that the emotional experience of publishing a document is akin to publishing a video, with diverse motivations driving the action.

These motivations range from lead generation and idea dissemination to financial incentives and community engagement. Ultimately, this public sharing is a primary driver of new user acquisition for Coda.

“The majority of new users discover the platform through these publicly available documents,” said Mehrotra. “Often, they don’t even recognize it as Coda until they begin using it and become active creators. These interconnected loops are fundamental to how I present the business.”

The Coda Investor Doc is available for review on Scribd, authored by Jordan Crook.

The discussion between Mehrotra and Somasegar also covered their collaborative founder-investor dynamic, as well as their approaches to product pricing and packaging. The complete conversation, including the ECL Pitch-off, can be viewed in the video provided.