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.
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.
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.
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.”
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.
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.
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.
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.
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."