Tuesday, January 24, 2006

Great Elevator Pitches: 3 Key Lessons

Elevator Pitch Series Table of Contents:
The elevator pitch literally gets is name from salespeople setting appointments while riding the elevator to and from work. In fact, I have a friend in New York who has gotten so good at this that he actually starts and ends his day by continuously riding up and down the elevators in his building from 8-9am and 5-6pm. He strikes a conversation with a prospect in the lobby, quickly introduces himself, explains his value proposition, exchanges contact details and agrees to set an appointment before he walks out of the elevator! The key to his success is that he can explain why the prospect should meet with him in a simple and compelling manner in 45 seconds because he knows preciesely the time it takes to get from top of his building the the bottom and the prospect certainly is not going to be late for either work or dinner with his family in order to speak with a sales guy in the elevator.

The first lesson you can learn from my friend is to keep your message simple and concise. Your goal is to set an appointment where you can discuss the opportunity in greater detail, but you don’t have time for all of the details now. Include only the most important aspects of your business because while you may not be riding in an elevator, you are dealing with the other person’s attention span. Does the investor your speaking with understand or care about the technical details? The investor certainly doesn't care about them until after s/he understands the problem you solve. So a great elevator pitch explains the problem your company solves in terms of its business value, without the technical details, in 60 seconds or less. 60 seconds may not seem like a long time but countless advertising industry studies show that average attention spans are only 30 seconds. Hence, TV and radio commercials are only 30 seconds long. My friend gives his elevator pitch in 45 seconds, and 60 seconds is definitely the maximum amount of time you have to get your point across.

The second lesson you can learn from this salesman is to cheat. Elevator pitches are supposed to be spontaneous, but his elevator pitches are carefully planned. He knows that he is going to meet people in the elevator every day, he has rehearsed his pitch thousands of times and he knows it cold. In order to deliver a great elevator pitch my friend cheated by starting the test early you should also. You may never ride in an elevator with a venture capitalist, but you will meet people that can help you build your business every day and if you live in Silicon Valley you’ll definitely bump into a venture capitalist sooner rather than later. However, unless you’re truly stalking your favorite VC, your elevator pitch is likely to be somewhat spontaneous, so when you bump into him or her at the Dutch Goose or Buck’s, you’d better seize the opportunity. Cheat by being prepared. Write and memorize your elevator pitch now so that can make the most of your opportunities whenever they arise. Furthermore, I suggest taking your own destiny a bit more into your own hands, by seeking out VCs at local entrepreneur networking events where they frequently appear as guest speakers. (A list of these groups in the Silicon Valley can be found in a previous posting here) Yet, many eager entrepreneurs approach investors at these events so it’s even more important to make your pitch really standout in order to get your executive summary read the following day. So arguably a great elevator pitch does take longer than 60 seconds and it probably should start now.

The third lesson that can be taken from this successful salesman is that he doesn’t waste his prospect's time with his own bio. The prospect buys from my friend because he can explain the value of his product and not because he is the North East senior named account manager, who has won the president's choice award 3 times and got a great score on the GMAT. The prospect doesn't care as much about my friend's GMAT score as he does and both of their time is better spent talking about the product. This is the easiest way that entrepreneurs can distinguish themselves from other inneffective elevator pitches. Countless entrepreneurs burn their 60 seconds introducing themselves and wind up losing their audience before they ever explain the problem they solve. While the management team is often cited as one of the key criteria of venture investing, the elevator pitch simply isn’t the place to elaborate on this point. You’ve got 60 seconds and you’re guaranteed to use 10 just saying your name and that you’re the CEO, COO, CTO, CXO, etc. At some point your bio will come up anyway so let the investor ask you for it. I suggest using the next 50 seconds to explain your business because there are a lot more former middle managers from corporate America giving bad elevator pitches than there are fundable startups. The one exception to this is if you really are a rock star CEO. I would define a rock star CEO as either someone who as already led a startup to a successful liquidity event or someone who is widely acknowledge as the leading expert on a key issue facing the industry their startup is about to enter. A rock star CEO in your management team is a great “hook” (more on this later) and it is absolutely worth elaborating on. Otherwise, your name and title is plenty for you elevator pitch.

In closing this post, I’ll admit that even the perfect elevator pitch won’t set a meeting on its own. However, after you’ve delivered your pitch, the rest is up to the investor. Inevitably, the investor will have questions for you, so think of your elevator pitch as a table of contents rather than the entire book. The key to distilling your entire business into 60 seconds or less is giving the investor only the titles of the critical chapters in your story and then letting them decide which they want to learn more about. This allows you to create a meaningful dialogue in 3-5 minutes and will greatly increase the chances of getting either to a quick “no” or your executive summary read and an appointment set. Additionally, the questions asked provide clues on what you need to demonstrate to the investor when you do get to present your slide deck.

2 Comments:

At December 03, 2009 8:08 AM, Anonymous Sean McVey said...

Hey thanks for the great advice. I googled 'keys to an elevator pitch' and this was one of the first pages that came up.

The number one piece of information I got out of this post was to not include awards or bio info. in your pitch. I was going to do this but when I thought about it, everyone has won some type of award. Like you said, it's much better to focus on your unique value.

One of my clients is a graphic designer and she is trying to develop an elevator pitch. There are so many designers out there, and besides awards, it's hard to prove how she is different without getting into the details of projects. Any tips on someone like this? Thanks a lot.

 
At December 03, 2009 2:28 PM, Blogger Andrew Fife said...

The key in this case is to know your audience. If the designer is talking to an industry insider who understands the awards prestige than by all means s/he should mention them. Other ideas could be to mention famous former clients or projects the the designer has worked on. Maybe even carry a small portfolio?

 

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