Elevator Pitch Essentials

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CChhrriiss OO’’LLeeaarryy

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Sales/Marketing $14.95 It doesn’t matter whether you are an...

Entrepreneur Inventor Intrapraneur Salesperson Project Champion

It doesn’t matter what you are selling...

An idea. An existing product or service. A project. Yourself.

This book answers questions like…

What’s an Elevator Pitch? Why do you need an Elevator Pitch? What are the characteristics of an effective Elevator Pitch? Who needs an Elevator Pitch? How can you tell if your Elevator Pitch is effective?

Chris O'Leary is an internationally recognized expert in the areas of innovation, new product development, and marketing. Chris works in the field of new product development and teaches in the MBA program of Washington University in St. Louis. Chris has held key product development and marketing positions in a number of startups including SalesLogix, makers of the leading middle-market CRM system. Chris has also worked as a technology and management consultant for Cambridge Technology Partners, Ernst & Young, and Andersen Consulting. Other books Chris has written or contributed to include The Paradox of Pain and Grid Computing: A Practical Guide.

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$14.95 For Rich Moran, Jim Raterman, and everyone else at SLUH. Version 1.0 Elevator Pitch Essentials Printed on 3/22/2006 3:16 PM Copyright 2006 by Chris O’Leary All rights reserved No part of this book may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, except for brief excerpts for the purpose of review, without written permission of the author. ISBN 0-9727479-1-5 First Edition: August 2004

For more information, contact the author at… Chris O’Leary 104 Elm Ave Glendale, MO 63122 [email protected] www.chrisoleary.com

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Table of Contents

2. Introduction ........................................................................... 3 1. Elevator Pitch 101................................................................. 9

4.1. What’s An Elevator Pitch? ...................................... 11 4.2. Why Do You Need An Elevator Pitch? ............... 12 4.3. The Goal Of An Elevator Pitch............................. 13 4.4. Turn The Audience Into Your Salesforce ............ 14 4.5. How To Get The Attention Of A Professional

Investor ...................................................................... 16 4.6. What An Effective Elevator Pitch Looks Like.... 17 4.7. When To Use An Elevator Pitch ........................... 19 4.8. The Forms An Elevator Pitch Can Take.............. 20 4.9. The Target Audience For An Elevator Pitch....... 21 4.10. Elevator Pitch Style Tips ......................................... 22 4.11. Who Needs an Elevator Pitch? .............................. 24 4.12. Elevator Pitches Vs. Investor Presentations ........ 26 4.13. What To Put On a Slide .......................................... 27 4.14. How To Tell if Your Elevator Pitch is Effective 28

5. The ___ C’s Of An Effective Elevator Pitch ................. 29 6. Who, What, Where, When, Why... ................................... 35 7. How An Elevator Pitch Should Flow .............................. 41

7.1. Summary Sentence ................................................... 42 7.2. The Problem.............................................................. 46 7.3. The Pain ..................................................................... 49 7.4. The Solution .............................................................. 50 7.5. The Benefits .............................................................. 52 7.6. The Team................................................................... 54 7.7. The Money................................................................. 55 7.8. Don’t Talk About… ................................................ 56 7.9 What to Cut & What to Keep ................................ 58

8. Frequently Made Mistakes ................................................. 61

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9. Before’s & After’s................................................................ 63 9.1. Heuris Elevator Pitch............................................... 64 9.2. Novel Imaging Elevator Pitch................................ 66 9.3. Tsunami Research Elevator Pitch.......................... 68

10. Do’s & Don’ts...................................................................... 70 11. Recommended Reading...................................................... 71 12. Acknowledgements ............................................................. 72

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DON’T PANIC!

Elevator Pitch ESSENTIALS 3

2. Introduction

icture this. You’re an entrepreneur and are attending an emerging

technology conference in a swanky hotel. You’re there to learn something about the world of Venture Capital and make a few contacts. At the end of the day, you decide to check your e-mail before going out for the night. You head over to the elevator bank, push the “Up” button, and step through the doors of a waiting elevator car. Just as the doors begin to close, you hear a voice shout out “Hold the door, please.” You swing your notepad between the closing doors and, as they bounce back, through the door bounds a 40-something man who just happens to be one of the country’s top Venture Capitalists. Or maybe you’re a manager in a large company and you have just come up with an idea that you think will save your company millions of dollars a year. After giving yet another presentation and getting yet another set of maybe’s, you get on the elevator to go back up to your office. As you step through the doors, you notice the CEO of your company standing on your left. Or maybe you’re a salesperson and have spent the last year penetrating an account. The client is ready to buy, but everything is being help up by your contact’s inability to get the approval of his V.P. After attending yet another status meeting, you step into an elevator to go down to your car. The only other person in the elevator is your contact’s V.P. Or maybe you work for a non-profit and are trying to raise $25 million dollars to fund a new museum. You are attending a charity ball at a downtown hotel, hoping to run into one of the people on your list of potential donors. You step into the hotel elevator to go up to the hotel ballroom and, as you turn around, into the elevator steps the CEO whose name is at the top of your list. What would you do? While the scenes I paint above may seem a bit idyllic, encounters like them happen over and over again to entrepreneurs, salespeople, project

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champions, and others. By virtue of design, luck, or connections, they come face to face with someone who can help them achieve their goal. The problem is that too few people are prepared to deal with such a situation. They haven’t even considered how they would deal with such a situation, much less prepared something to say or rehearsed saying it. As a result, instead of capitalizing on the opportunity, they just let it walk out the door. Regardless of what the Thing is that you are selling — a business, product, service, process, idea, book, or museum — this book will teach you what to do in this situation. While the lessons of this book aren’t always obvious — which is why there are so many terrible Elevator Pitches out there — they are far less mysterious than many people believe. There are rules you can follow, and by reading this book you come to understand those rules and will dramatically improve the odds that you will achieve your goal.

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Here are the top ten things you should take away from this book. 1. People Are Busy! The single most important thing to keep in mind when thinking about selling in general, and Elevator Pitches in particular, is that people are busy. You first have to just get their attention before you can even think about closing the deal. 2. Helpful = Busy An important corollary of Rule 1 is that it never fails that the more potentially helpful someone can be, the busier they are. 3. Establish Your Credibility Neither potential backers nor prospective customers will believe what you say until and unless you also establish your credibility. 4. An Effective Elevator Pitch Has Four Characteristics…

4A. Concise An effective Elevator Pitch contains as few words as possible, but no fewer. 4B. Consistent While an effective Elevator Pitch must be tailored to the unique interests of The Audience, it must still convey the same basic message. 4C. Benefit-Focused An effective Elevator Pitch never discusses a feature without also discussing the resulting benefit; the “So What?” 4D. New Product or Service Instead of describing a raw idea or technology, an effective Elevator Pitch describes a saleable product or service.

5. Don’t Get Lost In The How Instead of just focusing on the thing you love and likely are the most comfortable talking about — How your innovation works — you must first answer the questions that Ordinary People are likely to ask. What is it? Who will buy it? Why will they buy it? Will you make any money? Who are you to see the problem and build the solution?

WHAT

WHO

WHY

WILL

WHORU ————

HOW

ELEVATOR PITCH


6. Speak English When talking about your idea, you should stay clear of jargon, MBA-speak, and any words and phrases that are not universally understandable. 7. Begin With A Summary Sentence When you first start talking to someone, it is critically important that you make a good impression and set the stage for a more detailed discussion of the details of your idea. The way to do that is to start off every pitch with a Summary Sentence that is consistent with this template.

___________ is a __________

COMPANY NAME TYPE OF COMPANY

and has developed a ___________ that is PRODUCT CATEGORY

___________ than existing solutions (like __________). KEY BENEFIT(S) CHIEF COMPETITOR(S)

8. Explain What’s Wrong With The State Of The Art Most investors are wary of backing what they perceive to be a Solution In Search Of A Problem (or SISOAP). As a result, you must be sure to establish what’s wrong with the state of the art and explain why that will drive people to change and adopt your solution. 9. Memorize It And Use It Everywhere Your message will have the most impact if you use it in every piece of communication. Because you will use your Elevator Pitch everywhere, you should memorize it. That way you will ensure that different people receive a consistent message and that you will feel and look more confident. 10. Turn Your Listeners Into Your Salesforce When you are just getting started, you are likely to have limited resources. As a result, you should strive to turn every person who hears your Elevator Pitch into a salesperson for your Thing.

ESSENTIALS

Summary Sentence ————————

The Customer

The Problem

The Pain

The Solution

The Benefits

The Team

The Money ————————

The Deal The Technology

Lessons Learned

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An Elevator Pitch is a concise,

consistent, and benefit-focused

description of a new product or service.


1. Elevator Pitch 101

t doesn’t matter what you are selling; maybe it’s an idea for a new business, maybe it’s an existing product or service, or maybe it’s

yourself. It also doesn’t matter who you are selling it to; maybe they are an investor, maybe they are a potential customer, or maybe they are a potential client. In order to have even a chance of closing the deal, you first need The Audience to listen to what you have to say. Unfortunately, few people realize that getting The Audience to listen to what they have to say is much harder than it looks. The problem is that people are busy; just like you, they have too much to do and too little time to get it all done. What’s more, it never fails that the more potentially helpful someone is, the busier they are likely to be. If you want to be successful, you need to take this problem seriously; you need to figure out how to communicate your message in a way that will catch the attention of someone who has seventeen other things on their mind. You need an Elevator Pitch. An Elevator Pitch is a concise, consistent, and benefit-focused description of a new product or service. An effective Elevator Pitch will quickly catch the attention of The Audience, persuade them to pay attention to what you have to say, and convince them that they want to hear more. An Elevator Pitch does this by answering basic — but too often overlooked — questions like…

What is it? Who needs it? Why do they need it?

If you take the problem seriously and spend a significant amount of time developing and refining your Elevator Pitch, then you will greatly increase the odds that you will achieve your goals.

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YES

Drinking Fountain

NO Firehose


4.1. What’s An Elevator Pitch?

he obvious way to answer the “What’s an Elevator Pitch?” question is to give you a definition…

An Elevator Pitch is a concise, consistent, and benefit-focused


However, taking the lessons of this book to heart, let me first give you an overview of what an Elevator Pitch is before I get into the details of what I mean when I use words like “concise”, “consistent”, and “benefit-focused.” At its core, an Elevator Pitch is three things. Of course, an Elevator Pitch is a communication tool; it will help you articulate your message. An Elevator Pitch is also a sales tool; it will help you raise the money, and close the deals, that you need to be successful. However, and most importantly, an Elevator Pitch is a teaching tool. While it’s of course important that you eventually close the deal, there is no point in trying to close the deal if The Audience doesn’t even understand what you are talking about and why they should care. As a result, an Elevator Pitch is designed to play the role of a primer; as a high-level and basic introduction that is designed to get people up to speed on your Thing. That means that an Elevator Pitch is designed to do two things. First, it is designed to give The Audience just enough information so that they will have a sense of what you are talking about and want to know more. Second, and just as importantly, it is designed to not give The Audience too much information so that they will not feel overwhelmed (and will not tune you out). Think drinking fountain, not firehose. If you are going to be successful, then you’ve got to ease the audience into your subject; you’ve got to give The Audience a chance to catch up to you and all of the thinking you have done over the past months or years.

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4.2. Why Do You Need An Elevator Pitch?

sing an Elevator Pitch to organize all of the facts that make up your story isn’t just a good idea.

Instead it is something you absolutely must do. It all comes down to that fact that while you no doubt love, are fascinated by, and are passionate about what you are doing and could spend hours talking about it, most people aren’t like you.

In all likelihood, when it comes to the people whose help you will need to bring your idea to life, they aren’t going to be

nearly as knowledgeable about or as interested in your field of expertise. As a result, they are unlikely to appreciate — or even notice — the intricacies, subtleties, and details of your innovation. Instead, they will only understand and — initially at least — be interested in the big picture. Even if they do share your interest in and knowledge of your field, the odds are that they are extremely busy. Just like you, they have too many things to do and too little time to get them done. That means that they must constantly — and quickly — decide what to pay attention

to and what to ignore. What’s more, it never fails that the more potentially helpful a person is, the

busier they are likely to be. As a result, you must come up with a way of explaining your idea that will grab the attention of someone who has seventeen other things on their mind. You must assume that people are looking for a reason to tune you out, not that they want to hear what you have to say. You must explain your idea in a manner that requires The Audience to do the least amount of work. Above all else, you must get to the point. Only by doing that will you get the attention of The Audience and even have a chance to get into the details of your idea.

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People Are Busy!

Helpful = Busy


4.3. The Goal Of An Elevator Pitch

ne of the key lessons of Stephen Covey’s excellent book The Seven Habits of Highly Effective People is that successful people begin

with the end in mind. They know what they want to achieve before they start working. That turns out to be critical advice for anyone who is trying to create an Elevator Pitch. If your Elevator Pitch was the only chance you had to convey your message to someone before they decided to back you — or not — then it would make sense to cram as much stuff into it as possible. But that’s not the case. Instead of being the Alpha and the Omega of an investment decision, an Elevator Pitch is just one step in the process. Yes, it’s an extremely important step, but at the end of the day you will have several other opportunities to tell — and to flesh out — your story. At this point, all you want to do is get The Audience’s attention. For example, if you do manage to get a venture capitalist’s attention with your Eleva-tor Pitch, then they will probably ask to see your Business Plan. If the Executive Summary appeals to them — and to their firm — then they will likely read the rest of your Business Plan. Assuming your plan holds together, they will then ask you to come in and give a one-hour presentation. What this means is that you shouldn’t get ahead of yourself when creating or deliver-ing your Elevator Pitch. Instead of trying to close the deal then and there, your goal should be to just get to the next step; sending them your Business Plan or to giving them your Investor Presentation.

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ElevatorPitch

Executive Summary

Business

Plan

Investor Presentation

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4.4. Turn The Audience Into Your Salesforce

f course, your primary goal when creating and delivering your Elevator Pitch is to get a potential investor, partner, or customer

to want to hear more. However, successful innovators also keep in mind a second — but nearly as important — goal. Creating salespeople for your idea. When you are just starting out, the one thing you don’t have are a lot of are resources. That’s why you’re trying to raise money. As a result, you have to use your resources extremely efficiently. One of the best ways to do that is to take advantage of the principle of leverage. Just as a leverage can help you move an object that too large to be moved by hand, leverage can help your message have an impact that is disproportionate to the money you spend spreading it. How do you do that? The best way to do that is to turn anyone (and everyone) who hears your message into a salesperson for your idea. Whenever you talk to someone, your goal should be to turn them into someone who is able to tell someone else about your idea. For that to work, you must ensure that when you infect them with your message they are able to then infect others. That means your message cannot be too complicated. Instead, when that person is asked, “What are those guys up to?” they can reply with one or two words that accurately describe your idea. The need to infect others with a message that they can then pass on to others is the reason why your Summary Sentence is so important. In many ways, your Summary Sentence is the container for your idea. If it does its job, then people will become infected with your idea and will start infecting others. If not, then they won’t. If you want to learn more about this topic, there are a number of books that discuss how to harness the power of word of mouth to help spread your message. These include Malcolm Gladwell’s The Tipping

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Point, Seth Godin’s Unleashing The Ideavirus, and Guy Kawasaki’s Selling The Dream.

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4.5. How To Get The Attention Of A Professional Investor

hile Venture Capitalists, executives, and other professional investors like to change the world as much as the next guy, at the

end of the day they are paid to care about one thing. Making money. The way they make money is by backing innovators who have the potential of creating something that people or companies find to be extremely — and uniquely — valuable. Professional investors know that if an innovator can create a unique solution to an important problem, then that innovator will be in an ideal selling position and will be able to generate significant profits. Because the product is so valuable, it will be hard for the buyer to walk away from a sale. Consequently, the innovator will be able to charge premium prices, make great margins on what they sell, and be able to close those sales in a relatively short period of time. Just as importantly, they will be able to sustain those prices and margins over time because nobody else can solve the problem. As a result, the way to get an investor’s attention is to establish that an investment in your idea or company will enable you to create a unique solution to a significant problem. There are a number of ways to do this. Of course, the best way to do this is to find a customer. Their interest in your product — and best of all writing a check — is the best validation of your venture. A second way to establish the potential of your venture is to build up a team that has extensive knowledge of the specific market you are targeting, and in particular the strength and weaknesses of existing solutions. This will give your words credibility and will lead people to believe that what you say will happen will actually happen.

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4.6. What An Effective Elevator Pitch Looks Like

few years ago, I had the good fortune to join a start called SalesLogix that sold a Customer Relationship Management (CRM)

product. SalesLogix shipped its first product in 1997, went public in 1999, and was acquired in 2001 in a deal valued at $263 million. The SalesLogix Elevator Pitch — which we used to raise $17 million — went like this…

SalesLogix is a software company and has developed a Customer Relationship Management (CRM) system that is both easier to use and more powerful than existing solutions like Act and Siebel. Existing CRM solutions fall into one of two categories. On the one hand, you have Contact managers like Act that salespeople love but that do not allow people to share information across a large organization. On the other hand you have high-end CRM systems like Siebel that scale to support the needs of hundreds or thousands of users but that salespeople refuse to use. The result is that too many organizations are unable to…

Coordinate their sales and customer service teams Obtain a holistic picture of the customer Maximize the revenue gained from each customer

In contrast, SalesLogix delivers the best of both worlds…

The affordability and ease of use of a contact manager The scalability, database synchronization, and reporting

capabilities of a high-end CRM system The SalesLogix team has over 75 years of combined experience in the industry and is led by Pat Sullivan, the co-founder and former CEO of Contact Software International, the original developer of Act. SalesLogix is seeking $5 million to finance the continued development and marketing of SalesLogix 1.0, which is scheduled to be released in April 1997.

Let me make a few comments about the logic behind the SalesLogix Elevator Pitch. First, because of our experience in the industry, we knew that the problem was that existing CRM packages made companies feel

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like they had to make an impossible choice between usability and power. That was what was wrong with the state of the art. As a result, our Elevator Pitch — as well as all of our marketing and other com-munication pieces — reiterated the theme that SalesLogix was both easy to use and powerful. If we were pressed for time, we would cut the Elevator Pitch down to just one sentence…

SalesLogix is a software company and has developed a Customer Relationship Management (CRM) system that is both easier to use and more powerful than existing solutions like Act and Siebel.

The basic message of the Elevator Pitch and positioning diagram was then distilled down into a Tagline that was consistent with and reinforced our core message and positioning…

SalesLogix is the first true CRM solution

that’s as easy to use as Act!

Wherever possible — and regardless of whether we were talking to investors, analysts, or customers — this message was delivered by Pat Sullivan our CEO. This was important because Pat’s experience in the industry established our credibility. Finally, whenever we used our Elevator Pitch or Tagline, we tried to accompany them with a diagram (see Figure 1) that reiterated our sense of The Problem and our point of difference. In fact, this diagram was so helpful that when we couldn’t use a slide show or white board to get this point across, we would use our hands to paint this picture for The Audience.

Act

Siebel

SalesLogix


4.7. When To Use An Elevator Pitch

s the name implies, an Elevator Pitch is designed to be delivered in a elevator. However, you should be prepared to deliver it in a

variety of other social settings. Bar or Buffet Line In many cases you have the opportunity to strike up a conversation with a person standing in front of or behind you in line. If it turns out that this person can help you, then you have the length of the line to convince them to keep talking to you. Trade Show Every person that staffs a trade show booth must be familiar with their organization’s Elevator Pitch so they know what to say if a prospect, analyst, or member of the press walks up to them and asks, “So what does your company do?” Individual Introduction An Elevator Pitch can be used when you are introduced to someone by a friend and that person asks, “So what do you do?” Of course, it isn’t polite to drone on for five minutes about who you are and what you are doing. Instead, you must be able to reply with a concise statement of who you are.. Group Introduction Often you are given the chance to introduce yourself to a large group of people, some of whom might be able to help you. That is a great chance to deliver your Elevator Pitch.

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4.8. The Forms An Elevator Pitch Can Take

he classic Elevator Pitch is delivered in spoken form. However, the basic flow and logic of your Elevator Pitch should also be

reflected in your other Marketing pieces. One Sentence Summary Every piece of sales and marketing collateral that you create, regardless of whether it is being used to sell a deal or a product, should contain a one-sentence description (c. 15-30 words) of your venture. Of course, this one-sentence description should be in sync with your Elevator Pitch. One Paragraph Summary As you progress, you will need a one-paragraph summary (c. 100 words) that describes your venture and that can be pasted into the programs of conferences and added to the bottom of your press releases. This one-paragraph summary should be consistent with the longer form of your Elevator Pitch. Tagline As your venture grows and you reach the point where you have something to sell, you will need to develop a tagline; a short description of what you do and the value you deliver. Of course, this tagline should be consistent with and reinforce the key messages that are contained in your Elevator Pitch.

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4.9. The Target Audience For An Elevator Pitch

he prototypical audience for an Elevator Pitch is a Venture Capitalist. However, an Elevator Pitch can be any potential backer

of an idea. Investors You should deliver your Elevator Pitch to anyone — ranging from angel investors to corporate investment committees — who can provide the money you need to get your idea off the ground. Supporters Every project needs a set of supporters — ranging from team members to sponsors to advisors — and an Elevator Pitch is a great way to quickly acquaint people with what you are doing. Partners Often, you need to recruit business partners who can help you bring your product to market. An Elevator Pitch often makes a great way to start off such a conversation. Press & Analysts The press and analysts will help you spread your message, but they are very busy. As a result, you must first get their attention and then equip them with a concise description of your product or service that they can use when talking to others. Customers One of the best places to start any sales pitch is with a statement that explains to the listener why they should pay attention to what you are going to say.

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4.10. Elevator Pitch Style Tips

n a perfect world, substance would trump style. The problem is that we don’t live in a perfect world. As a result, if you want to be

successful, you must take into account this. The style in which a message is

delivered has a tremendous influence over whether people pay attention to —

and believe — the substance of a message. As a result, you should keep these style tips in mind prototypical audience Think Bullets, Not Paragraphs While you are fascinated by your venture, your audience isn’t likely to be (at least not at first). As a result, they are unlikely to pay close attention to what you are saying. Instead, they will just listen for the key points of

your message; the things that really stand out. As a result, when communicating your message (in either spoken or written words), your key points must stand out from everything else you are saying. Memorize It & Rehearse It There are two ways to make sure that people will not pay attention to your Elevator Pitch. The first is to just read your Elevator Pitch off of a piece of paper. The second is to stumble through your delivery of it. Given that you will deliver your Elevator Pitch hundreds of times during the process of getting your venture started, you should memorize it from

the start. In addition to improving the odds people will actually listen to you, this will also ensure that different people receive a consistent message. Go Easy On The Hype While it’s important to be enthusiastic about your venture, investors tend to be experienced, skeptical, and analytical. As a result, if you lay on

the hype too thick and overstate your case, then you are more likely than not

just going to look naïve. Don’t Try To Close Too Quickly It’s true that no sales pitch is complete unless you ask for the sale. However, getting someone to invest in or back your venture is a

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process. As a result, it is not appropriate to ask for the sale immediately after

delivering your Elevator Pitch. Instead, the time to close the sale is after you have delivered your Investor Presentation3. Go Easy On The Hype While it’s important to be enthusiastic about your venture, investors tend to be experienced, skeptical, and analytical. As a result, if you lay on the hype too thick and overstate your case, then you are more likely than not just going to look naïve. Don’t Try To Close Too Quickly It’s true that no sales pitch is complete unless you ask for the sale. However, getting someone to invest in or back your venture is a process. As a result, it is not appropriate to ask for the sale immediately after delivering your Elevator Pitch. Instead, the time to close the sale is after you have delivered your Investor Presentation.

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4.11. Who Needs an Elevator Pitch?

n this world we live in, everyone is busy and pressed for time. As a result, an Elevator Pitch is an essential communication tool that you

should possess regardless of whether you are and what you are selling. Entrepreneur Regardless of whether you are talking to potential investors or team members, prospective customers or business partners, or the press, you have to be able to convey your message in a manner that is both concise and compelling. In a manner that will leave the listener inclined to want to hear more about your idea. Intrapraneur In the same way that an Elevator Pitch can help an entrepreneur raise money from a Venture Capitalist or Angel Investor, an Elevator Pitch can help an intrapreneur — an entrepreneur who is working in a corporate setting — raise money from a corporate investment committee. These groups want to understand the same basic things; how you will turn each dollar they invest into 5 or 10 dollars. Project Champion You don’t have to be talking about a product, service, or business to need an Elevator Pitch; maybe all you have is a project. However, you still have to be able to sell it to your boss and enable them to sell it to their boss. You must also know what to say if you step into an elevator and find yourself standing next to your CEO and they ask what you are working on. Salesperson To be effective, a salesperson must be able to quickly get the attention of a prospect and then explain how they can make the prospect’s life easier.

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Consultant Every consultant must be able to quickly explain to both prospects and their current clients who they are, what they can do for them, and how they are already helping them. Inventor Anyone who has invented a new product or technology must be able to explain what it is and why anyone would buy it. Producer Anyone who has to raise money to fund a movie, documentary, or other creative work faces the same basic challenge as an entrepreneur; they must get the attention of The Audience and then explain what they will do with the money they are given. Non-Profit Fundraiser The wealthy and/or influential individuals whose money attention you are trying to get will have the same time constraints as a Venture Capitalist or executive. As a result, anyone who works for a not-for-profit and is trying to fund a project, building, or other project must possess an effective Elevator Pitch that explains to potential backers how the world will benefit from their investment of time or money. Author When talking about their book, the author must be able to quickly explain what is it about and why anyone should buy it. Job Seeker If you are looking for a job, then you must be able to quickly explain who you are and what you can add to their organization.

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4.12. Elevator Pitches Vs. Investor Presentations

any people aren’t sure what an Elevator Pitch is because many people use the term to describe a much longer and very different

beast called an Investor Presentation. There are several important differences between an Elevator Pitch and an Investor Presentation. First, there is an order of magnitude difference when it comes to the aspect of time. In general, an Elevator Pitch is a very short — usually just 30 to 60 second — overview of a new product or service. In contrast, an Investor Presentation can run anywhere from 5 minutes to 1 hour. That time difference creates a second difference when it comes to the use of slides and visual aids. When delivering an Elevator Pitch, at most you will be able to show people one slide. However, more often than not you will have to resort to hand waving and gesturing. As a result, you can only hope to communicate simple, high-level concepts, not complex, low-level details. In contrast, when giving an Investor Presentation you can rely on a deck of 15 or 20 slides to help you make you point. As a result, you are able to use diagrams and animations and can expect people to be able to understand more complex, subtle, or technical points. Finally, an Elevator Pitch and an Investor Presentation are very different when it comes to interacting with the audience. In general, an Elevator Pitch consists you of talking and the other person listening. If they ask any questions, it will be after you have finished speaking. In contrast, when delivering an Investor Presentation you should expect to be interrupted while delivering your pitch and should plan accordingly.

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4.13. What To Put On a Slide

any organizations and universities sponsor Elevator Pitch forums or competitions. Often in these more structured settings you get

the chance to display one or more slides. What should you do? First of all, it is generally best to limit yourself to just one slide. You want people to pay attention to you, not your slide. What should you put on your slide? When I gave the SalesLogix Elevator Pitch and had the chance to display one slide, it looked something like this…

Existing CRM solutions

force companies to choose between usability and power.

The SalesLogix team is led by Pat Sullivan,

the creator of Act!

SalesLogix is the first true CRM solution

that’s as easy to use as Act!

This layout did a number of things. First, it gave a quick sense of The Problem in both words and pictures. Second, it established the credibility of the team. Third, it hinted at how we would sell the product (and implied that we knew how to sell).

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Act

Siebel

SalesLogix

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4.14. How To Tell if Your Elevator Pitch is Effective

f course, the easiest way to see whether your Elevator Pitch is effective is to look at your bank account. If your balance is going

up, then it probably is. But what if the money hasn’t yet started to flow? How can you tell if your Elevator Pitch is really working? One thing to look for is whether the person you are talking to gets engaged by what you say. Do they respond with questions and start up a question or do they just sit there? While in some cases this is due to the person’s being preoccupied, if it happens enough it may point to a problem. Another way to evaluate your Elevator Pitch is to pay attention to the first thing people say after you deliver your Elevator Pitch. When I first joined Tsunami Research, I knew our Elevator Pitch had problems because the first thing people would say after hearing it was, “So exactly what is it that you guys do?” They didn’t know what kind of company we were or what we were selling. Whether we were a hardware or a software company and were selling a product or a service. A third way to judge the effectiveness of your Elevator Pitch is to try it out on people. Find someone who hasn’t heard you pitch and tell it to them. Then ask them to tell it back to you. The way they tell your message back to you will indicate what they are picking up on and will allow you to tweak your message so that people pick up on your key points. A final thing to keep in mind when judging the effectiveness of your Elevator Pitch is that there are two classes of responses. If people aren’t understanding what you are saying, then you need to simplify your message (and probably talk more about the What and less about the How). If they don’t believe what you are saying, then that is a good thing. They have understood your message. What you need to do in this case is emphasize things that will establish your qualifications to see The Problem and build The Solution.

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5. The ___ C’s Of An Effective Elevator Pitch

ow that you have a high-level sense of what an Elevator Pitch is and what it should do, let me drop down a level and discuss the

characteristics of an effective Elevator Pitch. As I said earlier, an effective Elevator Pitch must fit the following definition if it is to be effective...

An Elevator Pitch is a concise, consistent, and benefit-focused


But what exactly does each of those words mean and how should the influence what you do and do not do? Concise An effective Elevator Pitch should contain as few words as possible — but no fewer. Exactly how many words the means depends on the circumstances. For example, if you have just introduced yourself to someone you have never met before, then you should take less time. In contrast, if you are delivering your Elevator Pitch in a more structured format — for example, one in which everyone has two minutes to give their pitch — then you can take more time. One way to visualize this is to picture an accordion. If you spread your hands apart, then the accordion is big. If you keep your hands close together, then the accordion is narrow. Your Elevator Pitch must be able to do the same thing; be big and expansive where possible and narrow where necessary. Regardless of exactly how much time you have, you should generally follow two rules of thumb. First, the core of an effective Elevator

Pitch — the Summary Sentence — must be able to be delivered in just 5 or 10 seconds. Second, your entire Elevator Pitch should generally run no more than 1 minute and absolutely no more than 2 minutes.

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Concise Expressing much in a few words; condensed; brief and compacted.

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Given that most people can comfortably speak at around 125 words per minute, you’re talking about 25 or so words on the low side and 250 words at the absolute maximum. Finally, the need to be concise also implies that an effective Elevator Pitch must also cover everything at a fairly high level; there simply isn’t much time — or need — to get into a lot of details if all you have is a few seconds. Instead, those details can and should come later, after you have first piqued the interest of The Audience. Consistent A message is most powerful when it is consistent; when different people hear essentially the same thing. That doesn’t mean that every person must hear exactly the same message; instead, the message must be tailored to each individual’s interests and concerns. If The Audience is an investor, then you need to emphasize that you will make money. If The Audience is a customer, then you need to emphasize the value and benefits your idea will deliver. If The Audience is more technical in nature, then you need to emphasize the technical merit of your idea. However, regardless of exactly who you are talking to, the general thrust of the message must be consistent across different audiences. Benefit-Focused Instead of just talking about features and other technical aspects of your innovation, your Elevator Pitch must answer the “So what?” question. Every time you mention a feature, you must explain the value that The Customer will receive as a result. How that feature will save them time. How that feature will allow them to make or save money.


Product or Service Professional investors — and in particular Venture Capitalists — do not like two things: waiting and risk. For one thing, professional investors generally cannot afford to invest in ventures that do not offer at least the hope of paying out in less than 3 to 5 years. As a result, they usually will not back a product or service that is more than 12 months away from being launched. Professional investors also — and contrary to many peoples’ perceptions — generally don’t like risk. Sure, they are in the business of placing bets, but by and large those are calculated bets. Instead, they prefer to invest in ventures where the risks can be managed. As a result, your Elevator Pitch must make it clear that your Thing can be turned into a real product or service in a relatively short period of time. That means that you should use terms like “product” and “service” and avoid terms like “idea” and “technology” By speaking — and thinking — in these more tangible terms, you will make it clear to a potential backer that you understand that you need to deliver value in a short period of time. That means that if all you have is an idea or a raw technology, you must focus your efforts on turning it into a tangible product or service. Something that somebody would want to buy right now. Not something that somebody might want to buy at some point in the future. Finally, that means that if you are still years away from having something that can be commercialized, you shouldn’t waste your time talking to professional investors. Instead, you should target friends, angel investors, and others who are both more patient and more willing to take a risk.

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What An Elevator Pitch Is & Isn’t Before I move on and discuss the flow of an Elevator Pitch, let me first recap what I have said so far by pointing out what an Elevator Pitch is and — just as importantly — what an Elevator Pitch is not. AN ELEVATOR PITCH IS…

An Executive Summary Concise A Teaching Tool A Conversation Starter High Level An Overview Tailored to the Audience Consistent 30,000 Foot View Benefit-Oriented

AN ELEVATOR PITCH ISN’T…

The Complete Story Verbose A Mission Statement A Presentation Low Level Comprehensive Customized Canned 100 Foot View Feature-Oriented

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WHAT

WHO

WHY

WILL

WHORU ———— HOW


6. Who, What, Where, When, Why...

efore I get into the tactics that you should employ when developing and delivering your Elevator Pitch — what you are

going to say — let me first spend a minute talking about the strategy that must underlie your Elevator Pitch. When I use the word strat-egy, I am talking about your overall plan for achieving your objective; the why that lies be-hind your tactics, and not just the what, when, or how. Why you are saying what you are saying, why you are saying it then, and why you are saying it that way. Your strategy should grow out of an understanding of The Audience. Who they are. What they already know. What they are interested in. The problem is that too many people, when developing and delivering their Elevator Pitch, do so without a strategy; without a sense of why , when, and how they should do things. Instead of thinking about who they are talking to and how to best get their message across to that person, they instead tend to do one of two things. One the one hand, they talk about the thing they know the best. On the other hand they answer the questions they would ask. In either case, that means talking about the HOW of their innovation. HOW it works. HOW it is able to do what it does. HOW it… When it comes to selling a new product or service, the biggest mistake people — and engineers in particular — make is that they tell the story in the wrong sequence. More often than not that means that they get lost in the HOW.

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Don’t Get Lostin the HOW!

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Instead of first ensuring that The Audience even understands WHAT they are talking about, they instead start answering the questions they would ask. As a result, they dive down to the lowest level and start talking about HOW their innovation works. The problem is that most people either will never care about the HOW of an innovation or else they will only care about the HOW of an innovation after they first understand…

WHAT…Is It? WHO…Will Buy It? WHY…Will They Buy It? WILL…You Make Any Money? WHORU…To See The Problem and Build The Solution?

As a result, when communicating your message it makes the most sense to not take anything for granted. That means that, instead of going straight into the HOW, you should first make sure that The Audience understands the WHAT, WHO, WHY, WILL, and WHORU of your idea. WHAT Explaining the WHAT of your innovation means answering what I call the Whatzit questions; “What is it?” and “What’s it like?” The easiest way to explain the WHAT of your innovation is to give a definition of what you have built. When doing this, you should speak English and only use terms with which people are familiar. WHO Explaining the WHO of your innovation means explaining who will buy it. When explaining the WHO of your innovation, your message will be far more compelling if you make it clear to the listener that you have personal knowledge of The Customer (and are not selling a Solution In Search Of a Problem). Of course, the best way to do that is to be your first customer.


WHY Explaining the WHY of your innovation means explaining why anyone will buy it; what will drive them to abandon their existing solution and change and adopt your new solution. WILL The They will tell you they want it for free. Contrary to what many people believe, many people and companies don’t mind spend a reasonable amount of money on a product or service. Financial viability is something that is important even to customers. They don’t want to spend time on you, see you go out of business, and waste their time. WHORU Explaining the WHORU of your innovation means establishing your credibility. Most People — both backers and customers — will only pay attention to what you say if you can convince them that you know what you are talking about; that you understand the customer and are qualified to build The Solution. The logic behind this flow is that if The Audience understands the WHAT, WHO, WHY, WILL, and WHORU of your idea, then they will usually tell you so and you can then just skip ahead to the HOW. However, if you audience doesn’t understand them and you just skip over them and go straight to the HOW, they won’t tell you that they’re lost. Instead, they’ll just smile and nod as if they are listening to you, but you’ll never hear back from them.

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Concept Versus Implementation I’ve spent most of my career working either for or with engineers. One of the things I have found is that, whenever the topic of Elevator Pitches comes up, someone never fails to make a comment similar to this Dean Kamen quote…

People used to tell me that if you can't explain your idea in the span of an elevator ride, then it's not a good idea. My answer? If I have an idea that I could explain completely in an elevator, it ain't much of an idea.

The problem is that in the quote above, Kamen is confusing the conception of an idea with its implementation. Don’t get me wrong. For an idea to turn into a successful innovation, its implementation must be based on some technical or other magic. Something that’s really hard to do. With that magic, you will have a barrier to entry that will enable you to keep out the competition, charge high prices, and make a lot of money. Without that magic, all you will have is a commodity, leaving you vulnerable to being undercut on price. That said, the concept of an idea must be simple. It must be focused on solving a clear problem of a known customer. Most people simply don’t care much — if at all — about the magic that is at the heart of an innovation. Instead, what they care about is what that magic can do for them; how it can help them save or make money. As a result, when selling an innovation to a potential investor, partner, or customer, you must first sell them on the concept of your innovation, not its implementation. Only if they buy the concept will they want to talk about — or more likely bring in someone to evaluate — the implementation of the idea.

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Summary Sentence

The Customer

The Problem

The Pain

The Solution

The Benefits

The Team

The Money



7. How An Elevator Pitch Should Flow

he flow of an effective Elevator Pitch follows the same basic sequence that was laid out on the previous section, and layers on

an additional level of detail… WHAT, WHO, WHY Summary Sentence WHO The Customer WHY The Problem WILL The Pain WHAT The Solution WHY The Benefits WHORU The Team WHORU The Money However, an effective Elevator Pitch does several things to take into account the interests of the audience and the time that is available. First, an effective Elevator Pitch goes overboard on establishing the WHAT of your innovation; it addresses the WHAT at the beginning, middle, and end of the process. The reason for this is that most people must understand what you are talking about before they will be able to appreciate anything else you say. Second, regardless of whether you are talking to a potential investor, partner, or customer, they will be especially — and often primarily — interested in understanding the value you deliver. As a result, an effective Elevator Pitch must focus on establishing and communicating a strong value proposition. Third, an effective Elevator Pitch leaves The Deal and The Technology to later conversations. When it comes to The Deal (e.g. valuation), that is something that should be negotiated at a later point. When it comes to The Technology, you simply do not have time to do it justice in such a short period of time, so it’s best to not address it at all in your Elevator Pitch.

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7.1. Summary Sentence

n the same way that your Elevator Pitch is a summary of your Business Plan, your Summary Sentence is a summary of your

Elevator Pitch. As a result, your Summary Sentence is the most critical element of an Elevator Pitch; it is what you should say if you only have time to say one thing. The job of the Summary Sentence is to provide The Audience with a quick, crisp overview of what you do. By quick, I mean something is no longer than 25 or so words and that can be delivered in just 5 to 10 seconds. By crisp, I mean something that is well-organized and easily flows off the tongue. That also means something that focuses on the WHAT, WHO, WHY, and WHORU of your idea and leaves the HOW to a later conversation. There are three reasons why it is important to start off with an overview of your venture. First, and most importantly, people start forming an impression of others in just a few seconds and, as the old adage says, “You never get a second chance to make a first impression.” You want people’s first impression of you to be of someone who is organized and articulate; not someone who is disorganized and long-winded. Second, when encountering any new piece of information, people quickly decide whether to pay attention to it or not; whether what they are seeing, reading, or hearing is relevant or not. You want the answer to that question to be “Yes.” Third, in most cases you have no way of knowing in advance just how much time you have to talk to that person; it may be 10 seconds or it may be 10 minutes. As a result, it is safest to be paranoid and assume that you only have a short period of time. If it turns out that you have more time, then you can always go into more detail. Given all of this, it turns out that a good Summary Sentence should focus on several things.

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Company Name Just as you should tell someone your name when introducing yourself to them, one thing your Summary Sentence must contain is the name of your company, team, or project. That name will give them a piece of information off of which they can hang all of the other information you provide. Type of Company Professional investors do not invest in any and every type of venture. Instead, they tend to specialize in just a few sectors and types of products. As a result, one way to help a professional investor decide whether to pay attention to you or not is to indicate what type of company you are (e.g. a hardware or software company). Also, when talking about the type of company you are building, it isn’t necessary to mention the stage of the company. This is a level of detail is best left to a later conversation. Category In a similar vein, your Summary Sentence should establish what category (e.g. Life Sciences or Customer Relationship Management) your venture is targeting. Product/Service Name One way to make your venture feel more tangible is to tell The Audience the name of your product or service. That communicates that you are selling more than just an idea. Key Benefit(s) If you want to give The Audience a high-level sense that you understand selling, your Summary Sentence must answer the “So what?” question. It must identify the one two things that different your idea from existing solutions and that will drive people to change. One place to look for benefits is to look to your answer to the question “What’s wrong with the state of the art?” Your key benefits should be the opposite.

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Chief Competitor(s) In some cases, naming you chief competitor(s) can help explain what kind of company you are. A final thing to keep in mind is that a Summary Sentence is different than a tagline. A tagline is even shorter than a Summary Sentence because it is generally limited to benefits. However, a tagline does not contain enough detail to serve as a Summary Sentence.


Your Summary Sentence Every Elevator Pitch must address the unique characteristics of both the product and the opportunity. However, if you are having a hard time getting started, see if your idea can fit into this template for a Summary Sentence…

___________ is a __________

COMPANY NAME TYPE OF COMPANY

and has developed a ___________ that is PRODUCT CATEGORY

___________ than existing solutions (like __________). KEY BENEFIT(S) CHIEF COMPETITOR(S)

The SalesLogix Elevator Pitch can be easily fit into this format…

SalesLogix is a software company and has developed a Customer Relationship Management (CRM) system

that is both more powerful and easier to use than existing solutions like Act and Siebel.

Take a few minutes and try to fit your idea into this template and see how it flows. ____________________________________________________ ____________________________________________________ ____________________________________________________ ____________________________________________________ ____________________________________________________ ____________________________________________________ ____________________________________________________ ____________________________________________________ ____________________________________________________ ____________________________________________________ ____________________________________________________ ____________________________________________________ ____________________________________________________ ____________________________________________________ ____________________________________________________

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7.2. The Problem

ne of the biggest mistakes would-be innovators make when developing their Elevator Pitches is that they focus on the WHO

of their innovation — who will buy what they are selling — and never establish the WHY of their innovation. They never explain why people will buy what they are selling.

I know this doesn’t seem like a big deal compared to the effort it takes to bring a new product or service to life. However, it is important because, as anyone who has ever lived through the failure of a new product or business will tell you, sales don’t just happen.

The problem is that, while some people will change and adopt a product or service simply because it is new, different, or cool, the Ordinary People who make up the majority of the market hate to change and will only do so if they have a really good reason. In contrast to most innovators — who have never seen an innovation that they didn’t immediately want to try out — Ordinary People are practical, skeptical, and cautious. Rather than loving change for its own sake, Ordinary People are creatures of habit. Rather than trusting every pitch they hear, Ordinary People are far more likely to believe that, “If it sounds too good to be true, it probably is.” Rather than Ordinary People live their lives according to the principle that, “If it ain’t broke, don’t fix it.” Of course, Ordinary People don’t resist every new product or service; every now and then an idea comes along that is embraced by even the most conservative members of society. As it turns out, one thread ties together these products and services. The existence of a serious and significant problem. The history of business makes it clear that only ideas that solve a problem that is being felt by a large number of people will consistently drive Ordinary People to change.

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Different Enough


Of course, most experienced investors understand this relationship. As a result, when delivering your Elevator Pitch you do not want your idea to look like a Solution In Search Of A Problem (or SISOAP). Instead, you need to very explicitly and clearly explain the problem your innovation solves; you need to explain why people will pay attention to what you have to say. That means explaining what’s wrong with the state of the art; what is it about the existing solutions to The Problem that cause people to mutter to themselves, “There’s got to be a better way?” That means explaining why people will regard your idea as a “Must have” and not just a “Nice to have.” That means comparing and contrasting both the state of the art and your vision of the future. Above all else, that means weaving into your story — and ideally the longer versions of your Elevator Pitch — some sense of your experience with and understanding of The Problem. Only by convincingly explaining what will drive people to change and adopt your innovation will you address the deeper question that troubles every investor. Will it sell?

Will it sell?

What’s Wrong With the State of the Art?

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What’s Wrong With The State of The Art? One way to establish the problem you solve is to answer the question, “What’s wrong with the state of the art?” In the case of SalesLogix, the problem with the state of the art — and the thing that turned a mere problem into a real opportunity — was something called database synchronization. Existing CRM Systems couldn’t ensure that every user’s database contained the same information as everyone else’s. This caused numerous problems for organizations and gave them a reason to consider purchasing the system we had built. Similarly, I wrote this book not on a whim but because a friend at Boeing asked me to. As it turned out, he had a number of problems with existing resources about Elevator Pitches. He felt that existing books…

Were not focused on the topic. Did not provide many examples. Did not provide a template.

There was also the overarching issue that there was a large amount of good information about Elevator Pitches out on the web, but it was scattered around hundreds of web sites. As a result, he asked me to write a book that was focused, comprehensive, self-contained and that contained multiple examples. With the above examples in mind, take a few minutes and write down your answer(s) the question “What’s wrong with the state of the art?” on the lines below. _____________________________________________ _____________________________________________ _____________________________________________ _____________________________________________ _____________________________________________ _____________________________________________ _____________________________________________ _____________________________________________ _____________________________________________


7.3. The Pain

he T

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7.4. The Solution

nce you have established both The Problem and The Pain, then it’s time to revisit your innovation and explain exactly what it is.

When doing this, it is important to keep several things in mind. First, you need to stay at a high level. Explain what it is and why they should care. Imagine that you are explaining this to your spouse, your child, or your grandmother. Second, you need to speak English. Remember, The Audience is likely neither as knowledgeable about nor as interested in the subject as you are. As a result, you have to help them out a bit. That means giving them a plain English definition of what you do. That means leaving out the jargon, the acronyms, and the MBA-speak. If you are talking to someone who is familiar with the market, then you can use standard industry terms. When introducing SalesLogix, we first described it as a Salesforce Automation solution and then as a

Customer Relationship Management solution as the market evolved. A third thing to do when describing the solution is to be humble. The reality is that only a

small number of people will be able to understand the How of your innovation. However, a much larger number of people will probably be able to use your innovation if you do a good job explaining what it is and what it does.

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Whatzit?

1. Stay at a high level. 2. Speak English. 3. Be humble.


Leverage The Known One industry that has a lot of experience with selling ideas to busy people is Hollywood; every year hundreds of movies are released to theatres. Of course, before any movie can be released, it must first be made. That means that the person with the idea — usually the producer, writer, or director — has to convince the person with the money — the studio executive — to give them that money they need to turn their dream into a reality. Sound familiar? As it turns out, one of the techniques that is widely used in Hollywood pitch meetings can help you explain what you do to an audience of Ordinary People. The best way to see this technique in action is to rent Robert Altman’s movie The Player. Scattered throughout this movies are a number of scenes in which people pitch movies as X meets Y. As Ghost meets The Manchurian Candidate. As Out of Africa meets Pretty Woman. As The Gods Must be Crazy but with a TV actress instead of a Coke bottle. Why does this technique work? First, this technique works because it explains the new idea in terms of two things The Audience already knows. As much as you believe that your idea is new and unique, people will still want to know, “What’s this like?” and “How is it different?” Rather then getting annoyed, you should use this tendency to relate the unknown to known to your advantage. Second, this technique works because it explains the new idea in terms of two things that were already successful. Experienced Hollywood pitch masters don’t pitch movies as Heaven’s Gate meet Ishtar (a truly frightening thought). Instead, it’s Titanic meets E.T. Gladiator meets Schindler’s List. Shrek meets Tootsie. In many ways, the SalesLogix positioning statement (and Elevator Pitch) followed the same basic format and succeeded for the same reasons. While what we were doing was new, the key message of SalesLogix could still be distilled down to Act meets Siebel. While that caused some minor problems, it turned out to be a great way to tell our story.

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7.5. The Benefits

oo many people believe that the need to talk about The Solution gives them free reign to load The Audience down with a bunch of

fancy words and specifications. It doesn’t. Instead, any discussion of The Solution must be done in the context of The Benefits. It must answer the “So what?” question that will automatically follow the mention of any feature. A good rule of thumb to follow is to never mention a feature without tying it to a benefit. When it comes to talking about benefits, it is best to describe them in times of either money or time. That means explaining how a feature will help The Customer make money, save money, or save time. Discussing The Solution and its features in terms of The Benefits is important because it improves the likelihood that The Audience will remember what you are saying. Instead of simply loading them down with facts, by also discussing The Benefits you are giving them the context they need to appreciate what you are saying. The best place to look for benefits is in your statement of what’s wrong with the state of the art. The Benefits you must deliver in order

to be successful are the opposites of what’s wrong with the state of the art. If the state of the art is

expensive, you must be affordable. If the state of the art is slow, you must be fast. If the state of the art is cumbersome, you must be easy to use.

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So What?

WhatGoodzit?


What to Say (and What Not to Say) When writing — and delivering — your Elevator Pitch, there are a number of things that you should say and just as many things that you should not say. WHAT TO SAY

You should be sure to mention any patents that are either issued or pending.

Any exceptional accomplishments in the industry (other than just years of experience) are something you should mention.

While expressions of interest in your innovation aren’t worth much, the fact that someone is actually using — or better yet paying for — your innovation is something you should mention because it helps to establish the pain and answer the “Will it sell? question.

Anything that establishes your credibility to see and solve The Problem.

WHAT NOT TO SAY

Too many people say something to the effect of “If we can get just 1% of the market…” or “This thing will sell itself!” and betray their naiveté when it comes to selling.

Similarly, saying “We have no competition!” indicates to the listener that you do not understand the concept of substitutes (and basic economics).

Discussions of the technology and how it works are better left to a later conversation when you can give them the time they deserve.

Anything that gives the listener a sense of the secret behind your product and which makes you want to ask them to sign an NDA is probably too low level — too focused on the How — should be left out of an Elevator Pitch.

Stage of company. Legal form of company (LLC or Sub-S).

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7.6. The Team

ext to your Summary Sentence, your discussion of The Team is the most important part of your Elevator Pitch.

There are two reasons why this is the case. First, your discussion of The Team will establish your credibility; to a large degree it will determine whether your backers and your customers will pay attention to — and believe — you when you talk about The Problem, The Pain, The Solution, and The Benefits. It doesn’t matter how good of a job you do of painting a picture of The Problem if you

don’t also establish why you are qualified to see it and solve it. Second, professional investors like Venture

Capitalists generally back The Team more than they do The Idea. They do this because in many cases The Idea does not pan out and The Team must shift its focus and find a new problem to solve. To a large degree, professional investors will decide whether to back you — or not — based on who you are and what you have done in the past, not based on

how good your idea is. Having said that, you should generally stay at a fairly high level when talking about The Team. In most

cases there isn’t the time or the need to mention individual team members unless they have exceptional experience in the category. Instead, just talk about the cumulative years of relevant experience your team possesses.

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Why are you qualified to see The Problem?

Why are you qualified to build The Solution?


7.7. The Money

hen it comes to talking about The Money, you should keep several things in mind.

First, you should obviously state how much money you need. It also helpful to give some sense of what you will use the money for; whether you need it to develop your product or to scale up your sales efforts. Second, you don’t want to ask for too little money. For one thing, it makes you look naïve. Raising money is also a time-consuming (and distracting) process and you don’t want to do it more often than you need to. That said, it is generally best to focus on raising only enough money to get you to and through just the next major milestone. Those milestones may include…

Beta User(s) Shipping Product Profitability

The reason to think about raising money in terms of milestones is that in most cases the time to bump up your valuation is when you complete a milestone (because some of the risk is removed and you are that much closer to being a real company). As a result, if you don’t want to pay too much for the money you are raising, you should try to hold down the amount of money you raise in each round. That brings up a final point. You shouldn’t mention valuation — what percent of your company someone is buying for a giving investment — in your Elevator Pitch. For one thing, you want to make sure the listener understands what you are doing before they get distracted by the issue of valuation. Settling on a valuation is also something that is arrived at after a process of negotiation and — as with The Technology — is best left to a later conversation.

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7.8. Don’t Talk About…

ust as there are several things that you must touch on in an Elevator Pitch, there are two things that you should leave to a later date…


Most people understand why the precise aspects of The Deal — including the valuation and what an investor will receive in return for their investment — are best left to a later conversation. It makes sense to them that they shouldn’t try to close the sale until and unless they are sure the person wants to buy. However, many people have a hard time understanding why they should hold off talking about The Technology. While there are numerous reasons why people are reluctant to put off a discussion of The Technology, in most cases it comes down to the fact that The Technology is what they love and what they have spent the past __ years of their lives focused on. They would argue that they should talk about The Technology because it is the thing that enables them to solve The Problem. The thing to keep in mind, however, is that Ordinary People don’t buy based on the How, they buy based on the What…

What is it? What good is it? What can it do for me?

Ordinary People just don’t care that much about The Technology; it’s just a means to an end. The reason that you don’t want to talk about The Technology is that Professional investors understand this fact and want to see if you understand it as well. They want to know whether you can sell to an Ordinary Person; whether you can speak their language.

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The Crossing The Chasm Template One of the best books that has ever been written about marketing new products and services is Geoffrey Moore’s Crossing the Chasm. Contained in it is an Elevator Pitch template that goes like this… For (target customers) Who are dissatisfied with (the current market alternative) Our product is a (new product category) That provides (key problem-solving capability). Unlike (the product alternative), Our product (describe the key product features). The problem is that, while this is a good tool for organizing your thoughts, it isn’t an Elevator Pitch. For one thing, the flow of this template is a little stiff and formal. A good Elevator Pitch should be delivered in a relaxed and conversational manner, and this format doesn’t meet that requirement. A second problem with this template is that it is actually too detailed. Because it touches on so many different things, it can take too long to deliver. The bottom line is that I would recommend that you use this template to help you put together your message, but I wouldn’t recommend that you use it as your actual Elevator Pitch. Instead, on page 40 of this book I give a template that you can use to create your actual Elevator Pitch.

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7.9 What to Cut & What to Keep

ne of the characteristics of an effective Elevator Pitch is that it is like an accordion; it is tailored to time you have and expands or

contracts accordingly. As a result, in many cases you will find that you have to edit your Elevator Pitch so that it can be delivered in the time that is available. If you are pressed for time, it is generally best to cut things out of an Elevator Pitch in the following order... The Money The Money is the first that should be cut because it is secondary to what you are selling and can always be brought up at a later point. The Benefits Similarly, you should give a quick sense of The Benefits in your Summary Sentence so that you can postpone a more detailed discussion of The Benefits until later. The Solution If you give a high level definition of The Solution in your Summary Sentence, then it often isn’t necessary to go into any additional detail about it during your Elevator Pitch. That can be left up to a later conversation. The Pain The Pain can be cut before The Problem because you cannot make a profit if your innovation simply will not sell. The Problem One of the main concerns an investor has is “Will it sell?” Because The Problem addresses this question, it should be one of the last things you cut.

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The Customer While the details can be left to a later conversation, you should at least try to mention The Customer because that gives context to your discussion of The Problem. The Team When to cut The Team depends on just how good of a team you have assembled. If you have an ordinary team, meaning that you have some relevant experience, but nothing extraordinary like a prior success in the field, then The Team can be cut fairly early. However, if you do have an extraordinarily experienced team — like we did at Saleslogix — then if you are pressed for time all you might want to talk about is your Summary Sentence and The Team. Summary Sentence If you only have time to say one thing — and you don’t have an extraordinarily experienced team (and you probably don’t) — then that thing should be your Summary Sentence.

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You Can’t Pick Your Audience Too often I come across people who have the following attitude…

If they’re too stupid to understand what I’ve built, then I don’t want to talk to them.

It goes without saying — or at least I hope it does — that people who hold this short-sighted attitude don’t tend to be very successful. The problem is that most people are passionate about just one or two things, and only occasionally are those passions shared by others. Nearly everyone else is a novice when it comes to a given subject. As a result, when crafting your Elevator Pitch, you should take into account the fact that the odds are that the person you are talking to will not understand — at least at first —the particulars and subtleties of your passion. As a result, you have to ease them into the topic. In many ways this is what any good trial lawyer does. They have to make their case to a jury that is made up intelligent people — doctors, accountants, businesspeople, and others — who are unlikely to understand the intricacies of the law. However, instead of asking the judge to find them a smarter jury, they make do with The Audience they have been given. Instead of using long, complicated words and overwhelming the jury with complex legal concepts, good lawyers speak English and explain things in terms everyone can understand. Instead of assuming that the jury is familiar with the ignition properties of kerosene or the impact that asbestos has on the human body, good lawyers bring in experts and make sure that those experts to explain things in plain English. Instead of assuming that the findings of a test are self-evident, good lawyers explain the individual relevance — the “So what?” — of every piece of evidence they present and then tie all of that evidence together when making their case.


8. Frequently Made Mistakes

He

Would-be innovators and entrepreneurs tend to make the following mistakes over and over again. 1. Not Having An Elevator Pitch Too many people simply take too long to get to the point. 2. Getting Lost In The HOW Others dive down into the weeds and discuss the details without first establishing the context of the innovation. 3. Not Establishing Your Credibility Neither investors nor customers will pay serious attention to your claims if you don’t first establish your credibility. 4. Not Answering The “Whatzit?” Question Many pitches never explain what it is that the team has built. 5. Not Tailoring The Message To The Audience Too many people only answer the questions they would ask. 6. Jargonitis While jargon may be appropriate for some audiences, it has no place in a pitch that targets Ordinary People. 7. Looking Like A SISOAP Too many people create a solution that doesn’t solve a problem. 8. Phony Problem Many people understand the importance of solving a problem but fail to find one that is causing people tangible pain.

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9. Overpromising It’s important to be enthusiastic and confident, but you do not want to deceive people or look naïve. 10. Eating An Elephant While it is important to target a market that will allow you to grow to a significant size, you can’t do that in one fell swoop.


9. Before’s & After’s

ne of the hardest things about creating an effective Elevator Pitch is that many people have never seen one, much less a good one.

As a result, on the following pages I discuss some Elevator Pitches I have developed for companies I have either worked for or with. These include…

Heuris Novel Imaging Tsunami Research

In each case, the revised Elevator Pitch improved our ability to communicate our message and had a measurable impact on our sales efforts.

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9.1. Heuris Elevator Pitch

hen I joined Heuris as Marketing Manager, the company’s Elevator Pitch — which went on for several pages — started off

like this… Heuris is in the business of creating products for the professional digital video marketplace. The primary interest of this market is the creation of video content for delivery to consumers. This 'delivery" can take several forms: - Uplink from a broadcaster to a satellite. - Video from a website on the Internet. - Video from a standard CDROM or the new DVD The video industry is undergoing several changes. All of the above users are those that are working in the emerging digital marketplace. This market is replacing the old 'analog' form of video. What was once analog is now becoming digital. Since this market is a several billion dollar market that effects billions of people, the United Nations determined that in order to have an efficient and successful market the method of communication would be standardized across the entire world...

There were a number of problems with this Elevator Pitch. First, the Summary Sentence didn’t tell people what kind of company Heuris was or what we did. After reading or hearing it, people would still want to know whether we were a hardware company or a software company? What kinds of specific products did we make. Second, it wasn’t focused. In an effort to make the opportunity seem large, the pitch had the effect of making the company look completely unfocused. Third, it failed to establish the credibility of the company. By the time I joined the company, Heuris had been shipping a software product for several years and was widely recognized as the leader in its niche. It was a mistake not to mention those facts.

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I rewrote the Heuris elevator pitch so that it pointed out exactly what kind of company we were and the experience we had in the industry…

Heuris is a software company and makes a software product — called MPEG Power Professional — that offers video editors the best of both worlds; the affordability and upgradeability of software-based MPEG encoders and the features and image quality of high-end, hardware-based MPEG encoders. Our customers are users of Avid, Media 100, and other professional Non-Linear Video Editing systems who need a system that delivers extremely high levels of image quality but is far more affordable than existing, hardware-based systems. Brian Quandt, Heuris’ CEO, has spent the last 5 years working in the industry and was a member of the team that created the MPEG standard.

This version of the Elevator Pitch did several things. First, it clearly explained what kind of company Heuris was. Unlike most of our competitors, who developed expensive hardware products, we were a software company. Second, it pointed out exactly who our customers were. It highlighted our relevance to users of high end systems from Avid and Media 100. Third, it highlighted our credibility. It focused the listener on the fact that we made the dominant product in the category. The result was that Heuris was better able to explain how it fit into an increasingly crowded marketplace and as a result was able to double its sales in just 6 months.

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9.2. Novel Imaging Elevator Pitch

hen I first heard Novel Imaging’s elevator pitch, it went like this…

Novel Imaging is an early stage company dedicated to the discovery, development and commercialization of radiotracers and radioligands for applications in Single Photon Emission Computed Tomography (SPECT) and Positron Emission Tomography (PET) imaging. Near term commercialization focuses on the radioactive isotope Copper-64 (64Cu) for applications in PET Imaging and therapy and targeted tumor imaging of sigma-2 receptors by way of proprietary ligands. The first ligand would be a sigma-2 receptor ligand labeled with Tc-99m for breast, lung and head & neck tumors. Longer-term efforts for sigma-2 receptor ligands will focus on measuring the proliferative status (growth and spread) of tumor cells…

There are a number of problems with this Elevator Pitch. First, it is a perfect example of what I call a Worm Burner; an Elevator Pitch that gets too detailed too quickly. While this Elevator Pitch might work if given to a technical audience, an ordinary person is unlikely to understand — much less remember — any of it. Second, it uses too much jargon. It is absolutely packed with acronyms and scientific terms. Again, this will limit the number of people who can understand it. Finally, it didn’t answer the “So What?” question. There is no discussion of the benefits. No explanation why the world needs a product (?) that can do what the creator says it can do.

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With a little coaching, the leader of the Novel Imaging team developed this Elevator Pitch…

Novel Imaging is an early stage company dedicated to the discovery and development of products that will enable physicians to detect and treat tumors in their earliest stages. When it comes to screening for breast cancer, existing detection systems (mammography) have a difficult time discriminating between cancerous tissue and tissue that is dense, covered by an implant, or the result of scarring. As a result, 25% of the mammography exams done each year result in women being told that they have an abnormality on their mammography and need to undergo biopsies, ultrasound and other follow-up tests, only to find that they do not have breast cancer. Novel Imaging has developed a product that, when injected into the body, attaches itself to the wall of any cancer cells that are present in breast tissue and will highlight both the size and location of cancer growth. Novel Imaging is led by…

This Elevator Pitch does a better job of explaining to people why Novel Imaging exists. First, it starts off with a short summary sentence, which sets the stage for what will follow. Second, it is very explicit when it comes to The Problem and does a good job of answering the “So What?” question. Third, it gives the user a high level sense of how the product will be used and how it works, without going into details that are best left to a later meeting. With this revised Elevator Pitch, Novel Imaging was better able to communicate its message to potential investors.

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9.3. Tsunami Research Elevator Pitch

rior to my joining Tsunami Research, they were using the following Elevator Pitch…

Tsunami Research is revolutionizing the way in which large-scale, mission critical applications will be delivered and deployed. Hive technology from Tsunami Research is architected for order of magnitude improvements in cost and performance characteristics. Much like workers in a beehive, a Tsunami Hive brings together up to several hundred thousand workers into a single, high-availability computing environment perfect for delivering mission-critical applications. When compared with current approaches, applications developed with Tsunami technology are significantly more available (hive-based applications have no reason to ever go down), significantly more scalable (capable of growing from a handful of CPUs to hundreds of thousands of processing elements), are inexpensive to maintain (all members of a hive are always administered as a single system, no matter how large or complex), and require at least 90% less capital to acquire. Multiple Hives may be clustered or spread geographically, and can be linked to existing computing facilities.

There were a number of problems with this Elevator Pitch. First, it is much too complex. All of those parenthetical statements… Too dense. Assumes people will read or listen carefully. At that time, we were raising money from angel investors and this description of the company left them confused. They didn’t know exactly what it was that we did or made. What type of company? Were we a hardware or software company? Too HOW. No mention of the customer. A second weakness of this Elevator Pitch was that it focused on the technology and ignored the product. While engineers love to think and talk about technologies, at the end of the day most people buy products, not technologies. Finally… No credibility? Who are you to build the innovation?

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After coming on board and familiarizing myself with what we had to sell, I developed a new Elevator Pitch which went something like this…

Tsunami Research has developed a software product, called HiveCreator, which enables businesses and other organizations to simultaneously reduce the cost and improve the reliability of mission critical applications. HiveCreator enables large numbers of commodity computers to join together and form a self-organizing, self-healing, and self-managing system called a Hive. A Hive is more survivable, more scalable, and more affordable than existing solutions like fault tolerant computers and application servers. Tsunami Research is led by Bob Lozano, former co-founder and CEO of PaylinX, which was acquired by CyberSource in 2000 in a deal valued at more than $130 million.

The… First, it puts the focus on the product, not the approach or the technology. This was done because VCs are usually reluctant to finance the commercialization of raw technologies. Instead, they prefer to back products that are close to shipping. Second, this Elevator Pitch retains a fairly technical flavor. This was done because we were in the process of recruiting business partners and thus were interested in attracting the attention of both investors and geeks. That said, this Elevator Pitch does a better job of making clear both the features and the benefits of the product. The result was that we were better able to explain our message to non-technical individuals, and were able to broaden the base of investors in the company.

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10. Do’s & Don’ts

et me close this book by reiterating the things you should do — and the things you should not do — when creating and

delivering your elevator pitch. DO DON’T Oversimplify Get Lost in The How Establish Your Credibility Explain The Pain Talk About The Benefits Talk About The Technology Be Consistent Be Stale Pique Their Interest Try to Close the Deal Be Passionate Overpromise Be Enthusiastic Be Hype-y Rehearse Sound Rehearsed Think Bullets Think Paragraphs Repeat Your Key Points Memorize Your Pitch Read From a Sheet of Paper Think Context Give People a List of Facts Think Big Picture Sound Like a SISOAP Look Naïve Be a Tease Be Clear Try to Impress People With How Smart You Are

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11. Recommended Reading

f you want to learn more about how to be an effective communicator — and why it’s so important — I recommend that

you start off by reading the following books. The 22 Immutable Laws of Marketing Al Ries & Jack Trout How to Get Your Point Across in 30 Seconds or Less Milo O. Frank Presenting to Win Jerry Weisman

If you want to see how some great writers communicate complex subjects in a way that is understandable by Ordinary People, I rec-ommend that you take a look at the following books…

The Dinosaur Heresies Robert Baaker A Short History of Nearly Everything Bill Bryson Why Zebras Don’t Get Ulcers Robert Sapolsky

You should also consider reading any of the 20 or so books by Stephen Jay Gould that contain some of his essays that were published in Natural History magazine or picking up a copy of The Best American Science Writing.

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12. Acknowledgements

hile my name is on the cover of this book, it reflects the collective wisdom of a much larger community. I would like to

single out — and thank — the following people for their assistance in the creation of this book…

Ken Harrington, Andrea Rubin, and the rest of the group in the Skandalaris Entrepreneurship Program at Washington University

Mark Lewis of Gateway Associates Carter Williams and Gary Langenfeld of the Boeing

Chairman’s Innovation Initiative Bill Simon of the Center for Emerging Technologies Gil Bickel of Morgan Stanley Mike Bronowitz of Novel Imaging Al Ries Pat Sullivan Mike Wilcox

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