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The “Art” of the Elevator Pitch. Diane M. Sullivan (2008). What is an Elevator Pitch Anyway?. A short , simple description of your business idea that anyone could understand by the time you ride up three floors in a typical elevator. Very Important Point.

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what is an elevator pitch anyway
What is an Elevator Pitch Anyway?

A short, simple description of your business idea that anyone could understand by the time you ride up three floors in a typical elevator.

very important point
Very Important Point
  • An elevator pitch is not a sales pitch
  • You are NOT pitching a great idea, team or product (especially in an elevator!!)
  • You ARE pitching what your business will do for customers, investors, and/or society
  • SO, pitch how your business will solve a tangible problem or address a burning need that exists TODAY!!
example
Example
  • WRONG:
    • We are the smartest telecom guys in the world and we are gonna install high bandwidth wireless telecom infrastructure in really tall downtown buildings in big cities all over the world
  • BETTER:
    • We enable customers to use their cell phones anywhere inside every building in all major U.S. metropolitan areas
elevator pitch must haves and caution
Elevator Pitch “Must Haves” and Caution

Interesting opening: opening much immediately piques interest of recipient

Passion: if you are not excited about your business, no one else will be either

Short: assume you have less than a minute, and sometimes only time for a few sentences

Caution: Do not take too long to get to the pain/problem that you are solving—you could lose the catcher’s attention

elements of the pitch
Elements of the Pitch

All Pitches Should Include the Following 6 Elements:

  • The Hook:pain point or heart grabber
  • Brief description of product/service
  • Brief market description
  • Brief description of competition
  • How you are different from other solutions
  • How you will make money

Optional Elements to Include (depending upon time and nature of catcher):

7. Description of why financiers should invest in you

8. Description of investment needed and estimate of payback

9. Request for follow-up

the hook
The Hook
  • The hook should simply identify the “pain” you address
    • We make Napster legal
    • We will change the way people invest their money
  • When possible, paint a personal picture for your audience
    • Have you ever had your cell phone fail inside a building?
    • Imagine a rubber coating that conducts electricity….
  • Tag lines can be used as a form of a hook (tag lines are also effective closers to the pitch)
    • GE brings good things to light
    • NY Times – “All the news that is fit to print”
    • UCF Venture Lab – “Where education is a venture”
the product service pitch
The Product/Service Pitch
  • Guidelines to keep in mind when developing the product pitch:
    • KISS – Keep It Simple, Stupid
    • Kill the geek speak (e.g., limit technical talk)
    • Focus on customer benefits, not technical benefits
kiss of the devil too much information
KISS of the Devil: Too Much Information
  • WRONG:

Our technology is the first integrated and automatic book scanner that will scan and digitize bound documents at a speed of 1,200 PPM at a fraction of the cost of existing solutions based on a disruptive digital imaging technology initially developed at Bell Labs and protected by 12 patents.

  • BETTER:

We capture the future of knowledge by seamlessly digitizing physical libraries at a very low cost.

geek speak is boring
Geek Speak Is Boring…
  • WRONG:

We provide non-penetrable intrusion detection for digital voice, fax and wireless communication devices with our 2048-bit Hellman encryption algorithm that is combined with the latest 168-bit Hellman DES.

  • BETTER:

We allow you to communicate safely on a broad range of digital devices.

customer benefits not technical benefits
Customer Benefits, Not Technical Benefits
  • Seamless integration
  • Scalable, adaptable
  • Secure networking
  • Improves network performance

SO WHAT???

Technical Benefits

Business Benefits

  • Increase your revenues
  • Increase your efficiency
  • Reduces your risk
  • Cut your costs by 30%
the market pitch tie to a burning need
The Market Pitch – Tie to a Burning Need!!
  • ID the problem or need you solve in 1-2 sentences
    • We allow any cell phone to work anywhere inside buildings that utilize our wireless network solution.
  • If possible, reference a brand-name customer that is using your product (or that has expressed interest)
    • The FAA has determined that we are the only security system that is able to rapidly move people through security check points while exceeding their security needs
  • If you cannot reference an existing customer, quantify your market size with numbers that are from a reputable 3rd party source
    • According to the American Hospital Association, there are 4,000 hospitals in the U.S. that need the ability to visualize MRI images in 3D
briefly acknowledge your competition
Briefly Acknowledge Your Competition
  • Identify a couple of your competitors as well as what they provide
    • There are many vendors that provide internal wireless networks like Linksys and Cisco.
    • While no other firms offer a service package as comprehensive as ours, companies like PetSmart and Club K9 Doggie Daycare do offer some pet daycare and grooming options.
neutralize your competition
Neutralize Your Competition
  • Pitch 1-2 unique differentiators that describe your advantage
    • We use the same insulin compound provided in Merck’s drugs, but we allow children to take an oral dose instead of a shot
    • There are many flavors of PDA keyboards, but ours is the only one that folds into the PDA device when it is not in use
    • While there are many wireless router boxes on the market, ours is able to send signals through cement and steel walls
    • Unlike the competitors, our firm offers customers a full-service pet daycare, grooming services, and a pet training facility that is run by world-class trainers.
so how will you make money
So, How Will You Make Money?
  • Describe your firm’s revenue model (e.g., how your firm earns its money)
    • We will install the wireless network in a building at no charge, and then charge a usage fee for all calls that we carry
    • We provide free access to our medical information website for consumers, and charge advertisers for each exposure
    • Our portable fuel cells will be installed in laptops, and we will receive a royalty from Dell for each installation
    • We will distribute and sell our products through big box retailers as well as directly through our online store
    • For grooming, customers will pay for the services rendered and for pet training and daycare, customers will have the option of different service-level packages.
why invest in you optional depends on time constraints uniqueness of firm
Why Invest in You?(Optional – depends on time constraints & uniqueness of firm)
  • Fact: investors invest in people, not products
  • Describe your new venture team’s unique qualifications
    • Our founders have over 20 years of combined experience in the telecom industry.
    • Our board includes two top executives in the restaurant franchise industry.
    • Our technical staff has a combined portfolio of over 30 medical device patents.
    • We just recruited Ringo Starr to run our sales team. You may recall that Ringo took Google from $3 million to $100 million in sales in two years.
    • Our founder, Jessica Simpson comes from a family with nearly over 30 years of experience in this industry, providing our firm with connections to many of the industry’s key players.
slide18
Investment Required & Payback Estimate(Optional – depends on to whom you are pitching the firm – appropriate for investor pitch)
  • Describe the investment required at this stage of the business planning process
  • Describe for what purpose(s) that money will be used
  • Describe how, when, and with what rate of return you expect to payback investors
    • We are seeking $500,000 in initial start-up capital to fund prototype refinement, initiate initial marketing efforts, and website development. Based on our sales estimates, we plan to pay investors back 30% in year one at 20% ROI and 70% in year two at 30% ROI.
    • We are seeking a $1,500,000 investment to fund manufacturing, marketing, and initial product distribution. Within five years, we seek to achieve an IPO, at which time investors can expect a payback at about a 20% ROI.
the request will you help me
The Request: Will You Help Me?
  • End with a request that is tailored to the catcher:
    • Could I follow up with you at a more convenient time to present our company in more depth?
    • Given your background, I would greatly appreciate your feedback. What do you think of our business model?
    • I know you have a lot of contacts in the energy utility business. Who would you recommend for us to ask to join our board?
    • Could I have your card? I would like my CTO to follow up with you on your technical questions.
    • Could I have your card? I would really value your feedback and expertise as we continue to develop our business model.
slide20
Elevator Pitch: An ExampleNote: This pitch includes the components that should be included for the MGT320 class assignment
  • Hook: Have you ever had your cell phone fail inside a building?
  • Product: We provide a wireless communications network that enables any cell phone to work anywhere inside all types buildings, while ensuring your communications are secure.
  • Market: The FCC has determined that over 60% of the 5 million commercial buildings in the U.S. inhibit wireless or cell phone communications from within. The percentage is even higher in international markets, suggesting a huge need to better wireless communications networks.
  • Competition: There are many vendors that provide internal wireless networks like Linksys and Cisco.
  • Differentiators: However, we are the only vendor that enables communications to penetrate steel and other high density construction materials, which significantly reduces the cost of installation
  • Revenue Model: We will install the wireless network in a building at no charge, and then charge a usage fee for all calls that we carry on our networks
elevator pitch an example note this pitch type would be appropriate for an investor
Elevator Pitch: An ExampleNote: This pitch type would be appropriate for an investor
  • Hook: Have you ever had your cell phone fail inside a building?
  • Product: We provide a wireless communications network that enables any cell phone to work anywhere inside all types buildings, while ensuring your communications are secure.
  • Market: The FCC has determined that over 60% of the 5 million commercial buildings in the U.S. inhibit wireless or cell phone communications from within. The percentage is even higher in international markets, suggesting a huge need to better wireless communications networks.
  • Competition: There are many vendors that provide internal wireless networks like Linksys and Cisco.
  • Differentiators: However, we are the only vendor that enables communications to penetrate steel and other high density construction materials, which significantly reduces the cost of installation
  • Revenue Model: We will install the wireless network in a building at no charge, and then charge a usage fee for all calls that we carry on our networks
  • Why You? Our founders have over 25 years of design experience in communications systems, and Bob Marriott has recently agreed to join our Board of Directors.
  • Investment Required and Payback Estimate: We are seeking a $1,500,000 investment to fund manufacturing, marketing, and initial product distribution. Within five years, we seek to achieve an IPO, at which time investors can expect a payback at about a 20% ROI.
  • Request: It is my understanding that you invest in young communications companies. Can I follow up with you next week to discuss our business in depth?
questions
Questions?

Some sections modified from Chadwick (2006)

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