The Elevator Pitch
Back
to networking main page
The Elevator Pitch (EP):
Engage People, Move to Action…in Two Minutes
What is the Elevator Pitch and why
is it hailed as a great tool for determining the potential of a great
business?
Professor Stan Mandel of the Babcock Graduate School of Management
explains this method and outlines tips for a successful outcome.
“Four Score and seven years ago…currently engaged in a great civil
war…final resting place for those who gave their lives…new birth of
freedom… government of the people, by the people, and for the people
shall not perish from the earth.”
Lincoln ’s “Gettysburg Address” is often referred to as the
greatest elevator pitch of all time. It
framed a national vision based on results of recent contextual events.
It helped move our nation to action.
The elevator pitch is similarly important to the future of a new
venture. There is power in being able to communicate important concepts
in a concise, efficient message. This is particularly true when you are
attempting to influence action of important stakeholders.
What is an elevator pitch (EP)?
EPs are well-prepared, relatively short (2-3 minutes), pithy
talks, designed to convey a message that results in a desired outcome
from a targeted stakeholder. In 2-3
minutes, there is little likelihood that you will get a funding
commitment, sell a product, or convince someone to join your management
team. However, you can get a commitment from them to spend more time
with you in order to learn why they should fund, buy, or join. You are
selling your time, and you hope they buy.
EPs are used in many contexts.
Most often it is the “hook” or first introduction
of your business venture to a potential stakeholder. Who that person is
influences the structure and content of the EP. For example, an EP to a
venture capitalist might describe consumer markets and needs in the
context of your product/service, business model, and team. The EP of the
same opportunity to a prospective team member might emphasize
organizational vision, team roles, personal growth opportunities, and
ownership.
There are some common elements to
great EPs.
The first is to use analogies.
Describing your opportunity is often complex and cumbersome, resulting
in too much time devoted to conveying an incomplete or misunderstood
concept. To communicate clearer and faster, use analogies. For example
if you are proposing a new contractual sales method, you might say, “…it
is what Pitney Bowls does with stamp machines,” or “it is how Xerox
charges for its copy machines.” If you are conveying an opportunity to
provide national certification for lab technicians, say, “it is like a
CPA for lab techs.”
It is also critical to demonstrate
your awareness of stakeholder needs:
Customers, employees, partners, and investors. Why is it needed, to
whom, and to what extent? What is the role of others: what will they
contribute, how will they be rewarded? To be effective, you must be
believable. Avoid unsupported generalities or huge numbers that could
scare the targeted stakeholder. Also avoid meaningless geek or MBA
speak. This is especially true if you are pitching a complex scientific
venture. You need to describe the technology in simple terms.
A few final pointers will surely
improve the quality of your pitch.
Make sure that you are prepared for questions.
Seldom do you have 2-3 minutes of uninterrupted time for your EP. The
targeted person will interrupt and ask questions relating to what she is
interested in or does not understand. Answer the question; deflect the
question to one you can answer; or, tell them you will respond later.
Make sure to end with a realistic next step. Hopefully you can read your
target stakeholder’s reaction to your EP. Ask them what they want. Set
an appointment. Tell when you will call or send a business plan. Avoid
having them initiate the next action, rather, you should take on that
responsibility.
Of course, prepare and practice the
EP.
Great EPs do
not naturally appear in your mind at the time they are needed.
Design several EPs with different purposes in mind.
Practice your pitch with others familiar and not familiar with your
venture. They can provide feedback regarding the clearness of your
message.
Finally, do not think of the EP as a
condensed business plan.
If you do not know what is most important to communicate, how will your
target stakeholder know? It becomes information overload with little
focus or purpose.
Remember that an EP is the start of a longer sales process. You
must be able to make a concise and effective pitch to influential
individuals with the goal of getting more face time;
you must be able to make great formal presentations that let potential
investors (or other stakeholders) know of the value of your opportunity;
you must be able to respond to a series of penetrating questions that
demonstrate your situational awareness; and you must wrap this around a
great entrepreneurial team with a compelling opportunity.
College Competition:
Cornell University Elevator Speech
Competition:
A business idea that would allow people to manage their receipts online
was the top winner in the Oct. 29 Cornell Entrepreneur Organization's
(CEO) Elevator Pitch Contest.
The competition, in which 19 students delivered 30- to 90-second pitches
for their business ideas, was judged by a panel of faculty, staff and
students.
The "elevator pitch" refers to the
time an entrepreneur might have to sell an idea during an elevator ride
with a potential investor or partner.
First-place winner John Doe '07, MBA '10, pitched "Paperless
World" to eliminate the need for paper
receipts. Instead, each transaction would be deposited into an online
account that could be reviewed and searched for any particular receipt.
"It will make consumers happy, save companies money and help the
environment," said Doe, who won $350.
*This is the
first year that CEO has organized the contest, but they plan to hold one
each year. "It is crucial for entrepreneurs to be able to succinctly
communicate their business idea in a manner that elicits further
interest," she said. "One never knows when one can meet potential
investors, venture capitalists or valuable contacts."
|
