5 tips for a better elevator pitch

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.

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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!

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The great start-up experiment

Yesterday I had the pleasure of hearing Professor Jeffrey Pfeffer speak on “Profiting from Evidence Based Management”.”What is that?” you may ask. Put simply, evidence based management is the mindset of striving for fact-based decisions and actions. And I’d contend that it’s particularly critical for start-ups!

Doesn’t everyone use evidence in making decisions?

Actually, no! It turns out that fact-based decision-making is surprisingly rare. Most organisations and people make decisions using practices such as:

  • Casual benchmarking:  Company XYZ does this, therefore we should.
  • Belief:  Obviously, ABC is the most effective way to _______
  • Experience:  Trust me, I’ve seen this before and ____ is the way to go

What’s the problem with the status quo?

What’s wrong? Nothing less than low regard for management and a poor track record of results.

Research by various HR consultancies globally shows a staggeringly high level of employee disengagement, distrust of management, and even active sabotage within organisations. Anyone who has worked within an organisation has seen this in action, but systematic research confirms your experience.

Many industries also show a huge level of wealth destruction or foregone profits from poor decisions, including some errors that almost all competitors are making consistently. The airline industry is a classic example cited by Professor Pfeffer, with its unbundled pricing – i.e. charge extra for luggage, for a drink, for booking by phone, etc etc – which goes against a host of research into consumer behaviour that shows that lots of small costs are perceived to be worse than a one-off cost of the same amount.

Take an experimental mindset

The best firms, according to Professor Pfeffer, view their business decisions as experiments. Rather than just acting on their belief, prior experience, or some casual benchmarking – they ask themselves what assumptions they have about the situation, and then try to collect some evidence on the subject.

Often there is a wealth of data freely available on the internet. But even if there isn’t, or it’s unclear how it applies to your situation, the best thing is to do is run a series of experiments.  Try something! Then measure what happened and check what it means for your assumptions. Repeating this behaviour – and building a mindset of ongoing experiments – enables you to consistently focus your limited resources to greatest effect.

The great start-up experiment

Startups operate in an environment of relatively high uncertainty. Finding ways to systematically reduce that uncertainty and achieve greater bang for your buck can be a huge competitive advantage.

My time in startups has taught me that this experimental mindset can pay real dividends. Sure, it takes guts and you have to be brutally honest about what you don’t know. But it keeps your mind open to opportunities, enables you to learn and adapt quickly, and can make the difference between being a success or an also-ran.

For more on evidence-based management, check out www.evidence-basedmanagement.com or Professor Pfeffer’s book Hard Facts, Dangerous Half-Truths And Total Nonsense: Profiting From Evidence-Based Management

User Centred Design for Startups

Technology is increasingly integrated with our everyday lives. Whether keeping in touch with friends, listening to music, buying train tickets, looking for a job, or paying our bills – it is almost inevitable that a computerized device, often connected to the internet, is involved in the process. 

But not all interfaces are equal. We’ve all had experiences as consumers that leave us shaking our heads in disbelief, frustration or confusion. Common examples include programming the VCR, dealing with automated call centres, or trying to work out what to do next on some websites.

Today I’m interviewing Natalie Webb, an expert in usability and user-centred design. She brings a unique perspective to the topic, with qualifications in psychology and human computer interaction, broad business nous, and deep usability skills.  After working with specialist firm Amberlight in the UK, she now runs her own consultancy called Matau. 

Q. Natalie, you specialise in usability and user-centred design.  How would you describe what this means?

It is about designing products and systems that are centred around peoples’ needs and behaviour. The opposite is making people bend around the demands of a technology or system.

Q. What sort of business impact does user-centred design have?  Can it make a big difference to the chance of a new venture succeeding?

User centred design minimises risk; you understand requirements, create and evaluate solutions at an early stage of development. It is very expensive to alter a developed product, and you are usually much more limited in what you can change.

User centred design also helps innovation; once you know what needs and problems exist you can be creative in how to address these. Designing an easy to use, pleasurable and useful product or service will always help a new venture succeed.

Q.  Is usability more of an art or a science? What techniques and approaches do you typically apply when working with clients?

The question on whether user experience is an art or science is vigorously debated! I believe it can be both, which reflects its diverse roots.  You can conduct experimental studies as you do in psychology, do qualitative field research as done in social sciences, or be design focused when creating solutions.  I believe a lot of commercial HCI is a craft which reflects the expertise of the practitioner in gathering, analysing and designing.

Typical approaches used in HCI include going into the field to observe and interview people to understand requirements. Testing of prototypes, from paper sketches to almost the real thing, is very common. This helps to find out what interaction and flows are working. Testing live products and systems is often done to see what the current problems are.

Q. You’ve said before that good design is often about saying no, about not trying to be everything to everyone. What do you mean by this?

Good design needs clarity of focus – what is the design problem? What is the context of use? Who are the intended users? An overall vision for a design will help guard against ‘feature-itis’. Different stakeholders will want to add their little bit in under the assumption that more is generally better. However this way lies clutter and confusion of purpose. It is better to design a brilliant service for 10% then a pretty bad service for all.

Below are two examples of home pages for mobile phone service providers in the UK. To me the T-mobile site is much simpler to understand and navigate as a customer. The Orange site is half-portal half-mobile phone company. It is much more confusing to navigate through and understand what it is for. Flash animation is distracting too. I question if the Orange site is trying to do too many things and has avoided some decisions on what the home page is not going to do.

http://www.t-mobile.co.uk 


http://www.orange.co.uk

Q. Any advice for entrepreneurs out there when it comes to usability?

Usability doesn’t have to be a major commitment of time and effort. It is better to get some feedback than none at all. You don’t need expensive tools: go interview and watch some customers as they work and play. Invite feedback. Show some sketches and storyboards of some ideas to a few end users.  People are always fascinating and often surprising. There will always be things you don’t anticipate and it is better to know early then when it’s too painful to change!