Over the last couple of years I’ve attended dozens of tech startup events and heard probably a couple hundred project pitches. Some were part of formal presentations to large groups while others were just quick informal pitches over a handshake and a beer. The ideas that stand out are not always the most novel ideas, they are the ones that are clearly conveyed. I have found that there are four common components of an effective elevator pitch.
Paint the Picture
One of the best ways to start your elevator pitch is by describing who the product or service is for. In consumer facing businesses, I am a fan of a quick anecdote that illustrates the problem. “You know how every time you watch a show on DVR, you miss out on the online discussion you get when it originally aired live?” In B2B markets a pitch can begin by describing how an industry works and where there is a major flaw or inefficiency. “Right now radio stations end up selling their excess ad space at a deep discount at the end of each sales cycle, which encourages advertisers to hold out to save money.”
Framing your pitch with a story like this accomplishes two very important things. First, it’s shows the scope of your business. Most people won’t have exact numbers, but they can infer that TV viewers who chat online or radio advertising are both sizable markets. Second, it piques a listener’s interest about how you are going to solve this issue. By opening with a frame of reference your actual idea is much easier to follow.
Be a Business, Not a Feature
Once you have told the story of all of the parties involved it is good to explain how the company plans to make money. “We are going to take a small percentage of each transaction at the point of sale” or “We’ll offer the general listings free, but we’ll charge a small fee to local businesses who want higher visibility.” Effectively articulating a simple scalable revenue model is ultimately what identifies you as a business, not merely a feature.
Thought About It
If a pitch is directed at someone that you are meeting for the first time, they may have some skepticism. People often appear to be more interested in poking holes in your idea. I like to call this “listening for flaws.” A great way to subvert this is to bring up the challenges you foresee for the business and describe what you’re doing about it. “As we explored the idea deeper, we realized most of the people that buy high end fashion online are looking for deals, but labels want to sell online at full price. By doing ‘x’ we were able to satisfy both parties.” Showing that you took the time to vet the idea makes the whole business seem more feasible.
We’re Doing It
Finally, you need to address the question, “how you are going to pull it all off?” The only appropriate answer is “we already are.” Describe yourself and your team as if everything in your lives has led up to building this business, then show the incremental steps the team has already taken. If you already have 5,000 active users, say it. Just signed a big client? Throw that in. Even if all you have done is begin the development on the website, talk about how well it’s coming together with sincere enthusiasm. The worst thing you can do is sound ashamed of the progress made so far.
Entrepreneurs are usually very excited to talk about their business, but some are better than others at quickly describing what they are doing. The key to a great elevator pitch is being able to cover all of these components in about 30 seconds. This is much easier to accomplish if you have a clear vision or your business already established. Mastering your pitch will lead to better opportunities with potential employees, partners, and investors. Needless to say your elevator pitch worthwhile to practice and perfect.
This post was written by Austin Clements, class of 2013 at the Leonard N. Stern School of Business.