You’ve finally got that precious moment of attention from a potential investor (or employee, business partner, etc). Now’s your chance to excite them about your business venture and get them involved. But you’ve only got a few seconds to do it. How can you communicate what your startup does, why it is special, and why they should care in such a short space of time?
The “elevator pitch” – i.e. the critical few seconds in which you pitch your business – can be a huge stumbling block for many startups. I’ve heard professional investors say they screen out most of the pitches they receive simply because the entrepreneur could not convey the opportunity within 15 to 30 seconds.
It’s not easy to communicate the key elements of your business in a compelling way to people with little or no context … and in such a short space of time. In fact, it’s arguably harder to distill your 50 page business plan into a 15 second killer elevator pitch than it was to write your plan in the first place!
As Blaise Pascal once remarked:1
“I have made this [letter] longer, because I have not had the time to make it shorter”
So, to help you avoid falling into this trap, here are five tips on preparing a better elevator pitch…
Tips to improve your elevator pitch:
1. Anchor and twist:2 Start by hooking into existing ideas by using an analogy, then demonstrate your unique difference. For example, “RedBubble is an online art gallery for aspiring artists”. Most people already have some associations in their mind about art galleries – e.g. it’s a place where art is displayed and sold. Once they’ve got some anchor for the concept, you can communicate the twists – e.g. it’s online, it’s an inclusive environment for all artists (not just the elite), etc.
2. Prove the need: Demonstrate why there is a commercial need for your product or service. What’s broken right now and how does your approach fix it? Remember: the real world has plenty of inertia – people will put up with the incumbent for a long time, if the ‘better’ solution isn’t ‘better enough’ in ways that matter to the customer. Why is your point of difference strong enough to change people’s behaviour?
3. Define your market: Be specific about who will use your product or service, and use evidence to show this is a big enough market to be interesting. If you’re saying ‘everybody is a potential customer’, you don’t know your market well enough! Narrow in on a specific group. For example, The Eureka Report targets the 360,000 self-managed superannuation funds in Australia, not ‘anyone with money to invest’
4. Making money: Outline briefly your revenue model – i.e. how do you make money? For example, selling your own products, selling advertising space, getting a commission on sales, selling services on a fixed price or hourly rate, monthly newsletter subscriptions, etc etc. You don’t need to go into great detail here, just explain which of the many options you have chosen (and be ready to explain why, if they ask).
5. Keep it simple: You don’t have to explain all the nuances in your business model, nor clear up every possible misconception. The purpose of your elevator pitch is to pique their interest, and lead to further conversations that can explore your business in more detail.
1. Often mis-attributed to Mark Twain (see http://en.wikiquote.org/wiki/Mark_Twain)
2. For more on this and many other techniques to maximise the impact of your messages, see “Made to Stick” by Dan and Chip Heath. Highly recommended!