The following is Part I of our two-part series on entrepreneurial elevator pitches. Here, we examine the reasons why every small business owner should master an elevator pitch as well as offer tips on how to build one for maximum impact. Part II of this series focuses more specifically on tailoring your elevator pitch to an investor or venture capital audience.
If you only had one minute, could you effectively explain what your small business does to a complete stranger in a compelling manner, one that makes them want to hear more? That, in essence, is the art of the elevator pitch, so named because the duration of the typical elevator ride approximates the 60 seconds an entrepreneur would have to share their story with a potential customer, partner, or investor.
The ability to break through the clutter of the marketplace and differentiate one’s venture from competitors isn’t as easy as it sounds, however. Small business owners, who themselves are routinely pressed for time, can certainly sympathize with this dilemma. But that’s where a good elevator pitch comes in, explains author Chris O’Leary in his book Elevator Pitch Essentials.
“It never fails that the more potentially helpful someone is [to your business], the busier they are likely to be. If you want to be successful, you need to take this problem seriously,” writes O’Leary. “An elevator pitch is designed to quickly catch the attention of the audience, persuade them to pay attention to what you have to say, and convince them they want to hear more.”
Why every small business should prepare a basic elevator pitch
For many entrepreneurs, perfecting an elevator pitch might seem like an unnecessary extravagance, one more appropriate for a Silicon Valley boardroom than a Main Street storefront. “Most companies never get venture capital funding, especially outside of the technology world,” notes tech startup consultant Anil Dash in a recent blog post on alternative methods for funding startups, So why bother with an elevator pitch, if, as Dash spells out, there are lots of other ways to wrangle financing?
The answer lies in the broader benefits of developing an elevator pitch. First, just the process of distilling one’s business venture into a concise and sharply-crafted 60-second marketing message can be a helpful way to examine (or reexamine) a business’s core message and value proposition. Then there’s the wide range of alternative audiences a business’s elevator pitch can be tailored to, whether they be potential suppliers, promising customers, or future employees. And yes, other common sources of startup funding—local bankers, interested equity partners, even friends and family—would probably be more inclined to hand over a check after hearing a well thought-out and enthusiastic sketch of a business idea.
For Dr. John Cooley, perfecting his company’s elevator pitch was just such a stepping-stone to taking an idea and turning it into a full-fledged business. Back in 2008, when his company, FastCap Systems, amounted to little more than some experimental tests in a lab, Cooley and his co-founder decided to enter the M.I.T. Sloan School of Business’s annual Elevator Pitch Competition (EPC). Their innovative plan, which uses a new kind of electrical capacitor to solve the problem of renewable energy storage, ultimately won the competition and earned them the $5,000 grand prize. But while the money was a nice bonus, Cooley says the real payoff came from the experience and the legitimacy his company gained from the going through the process.
“It gave us some work under our belt and helped us a lot with networking and connections,” Cooley explains. What’s more, because he and his co-founder Riccardo Signorelli (who presented the pitch at the EPC) have advanced degrees in electrical engineering but no formal business training, Cooley says crafting their successful elevator pitch also built up their sense of entrepreneurial confidence. “We learned that you don’t have to have a business degree to start a business,” he says, chuckling. “You just throw yourself in and it kind of snowballs.”
Start with the problem
When developing an elevator pitch, the first thing to keep in mind is that it’s not about trying to close a deal but rather start a conversation, writes O’Leary. In his book, he identifies the somewhat daunting Nine C’s that he says comprise a good elevator pitch, but many of these key elements are fairly intuitive. The goals for your pitch should be more modest and realistic, he adds, like enticing an audience into wanting to hear more, rather than trying to immediately convince them that they should buy into your enterprise.
Likewise, you don’t want to lead off with a long recitation of your company’s vital statistics—information that can readily be found on your website—unless you want your audience’s eyes to quickly glaze over in boredom. Instead, you want to engage your audience with a compelling story about your business, and since every good story involves a hero confronting an obstacle that must be overcome, your elevator pitch should be structured in the same manner.
“You need to start with an explanation of the problem your business will solve,” explains Kourosh Kaghazian, a second-year Sloan student who is the managing director of M.I.T.’s 2011 $100k Entrepreneurial Competition. (To see more elevator pitches, check out the M.I.T. 100k Entrepreneurship channel on YouTube.) However, just calling something a “problem” isn’t enough, he points out. “You need to give data and stats to more fully describe the scope of the problem.” Once your pitch is armed with such context, it then becomes easier to move on to the next part, explaining your solution. And because brevity is key to covering as much ground as possible in a pitch, Kaghazian points out that this opening section should amount to no more than two or three lines when written out, or the equivalent of about 10 to 15 seconds long when spoken.
As a good example, Kaghazian points to the winning presentation from last year’s Elevator Pitch Competition. That pitch, from an M.I.T. student-led social venture project called Sanergy (check out one of their minute-long elevator pitches on YouTube), opened with a clear, scene-setting description of a widespread problem: “2.6 billion people from around the world lack access to adequate sanitation. The resulting disease causes nearly two million deaths each year.”
Solve the problem, sell your expertise, and close with a call to action
After having spent the first quarter of the pitch firmly establishing the problem, it’s then time to move on to the meat of the pitch—delivering a solution. In the case of Sanergy, the M.I.T. presenter spent the next 30 seconds or so explaining how their socially responsible business model will mate free hygiene facilities in developing countries with local, renewable energy production. Again, it’s important to add specific numerical context in this section too, as Sanergy did by noting the potential “$2-billion market worldwide.”
Merely offering a dazzling theoretical plan still won’t make for the very best elevator pitch, though. To push a pitch over the top, it should also spend five to ten seconds detailing the real-world expertise of the company’s leadership and why they have developed not just a solution, but the solution. For established small business owners, this is a good time to briefly discuss their years of industry experience and professional credentials. In the case of a nascent startup like Sanergy, demonstrating one’s bona fides is admittedly more difficult, but it can be done through advisory boards, feasibility studies, and prototype/pilot projects.
To wrap up an effective elevator pitch, it’s a good idea to re-summarize the solution in a few seconds and then finish up with a short, one or two-line call to action. “It’s important to make clear what you want out of your audience,” Kaghazian says. And while this conclusion typically involves asking for a commitment of some kind, what pitchers should be prepared for next is a series of probing questions about their enterprise. And that’s as it should be. After all, the symbolic elevator ride is now over and you still have your audience’s attention, so it’s now time to step out and get down to real business.