Startup Diary: Perfecting your elevator pitch - my tips for making the right impression
The most painful thing you're asked to do by business advisers and mentors is to come up with the so-called 'elevator pitch'. The idea is that you end up in a lift (elevator) and there standing before you is the venture capitalist of your dreams.
You've got 30 seconds to explain your startup and get the meeting that will secure funding that will get your hands ringing the opening bell of the New York Stock Exchange.
What do you say?
Lots of consultants have made lots of money explaining the art of the elevator pitch. Usually you get a template of some kind, and you fill in the blank words:
"We're [COMPANY], we make [PRODUCT] for [INDUSTRY]. We enable our customers to [VALUE]. Unlike [COMPETITION], we [COMPETE]. It would be great if you could [ACTION]."
You're expected to make this work because you're [FOUNDER]. Like most things that seem like a good idea and seem like they should have a big payback, but always fall short of their promises, starting with an elevator pitch template, and trying to fill in the blanks, is just a tactic that will fail without a strategy.
And yet the elevator pitch is so useful and so necessary.
In our startup, we are really starting to feel the pain from the lack of ready-made marketing messages. We are now actively seeking trial clients and organising our first sales seminar, and starting to send our proposals. And we're mostly making it up as we go along. Different people describe the company in different ways. Our website says one thing, our proposals another. What I say in face-to-face meetings is different again. Why are we in such a mess?
I've said this before and you should take comfort from it in your own startup: some fires just have to burn, and you can't solve all problems. This is not a fire that we've deliberately chosen to let burn (that's bad - choices should be made deliberately), but it is the right thing to have done, even if for the wrong reasons.
You can't create a good elevator pitch unless you have a good understanding of your business. That takes time to develop. It's not so bad in the meantime to throw a few things out there and see what reaction you get. I feel we're ready, now, to put together an elevator pitch that makes sense. We weren't before. Would we have benefited from the exercise earlier? Yes, but to be fair to ourselves, some of my 'strategic thinking' is invested in this column, so other things have to be cut - startups are all about trade-offs. In general, you should be writing you elevator pitch early, and revising often. Do as I say, not as I do.
So how do you write one? Go up to the strategy level, specifically your marketing strategy. You need to do some framework-driven thinking. You could go old-school and use the 4-Ps framework: Product, Price, Place, Promotion. It's a classic approach and you'll find lots of material on the web if you search. I prefer a slightly more modern approach that focuses on two core aspects of your business model and revenue mechanism: distribution and positioning.
The distribution question is: how do you get your product in front of your customers? A farmer gets their apples onto supermarket shelves - that's literal distribution. A consulting company shows thought leadership when the founders speaker at conferences - and sells over coffee on the exhibition floor.
The positioning question is: what are you and who are you for? A startup has to establish a beachhead in some market and expand outwards. A startup just does not have the resources to attack entire markets at the start. The farmer sells organic artisanal apples to upper middle-class generation X'ers. The consulting company CEO sells staff augmentation to enterprise clients that have bought into the digital transformation wave.
It is so tempting to write an elevator pitch that tries to take over the world, but all that does is communicate that you have no focus, and no differentiation.
You have to be able to answer your distribution and positioning questions. They are hard questions to answer because not only do they go to the heart of your business, but they also show how much strategic thinking you've put into building a route-to-market and future growth strategy.
Elevator pitches are also tricky because you need more than one of them. The 30-second pitch is actually one of the easiest ones. People speak at about three words per second, so that give you about 90 words to explain your company. That's enough to get the basic idea across, even if you do a bad job. But you also need a one-sentence pitch, a sound bite.
This is the one you end up using the most. Countless times you'll need to answer the question: "So what do you do?", and if you take up 30 seconds of airtime, you'll come across as rude. More critically, you'll gain very little information from the other participants in the meeting.
Keeping your mouth shut is the best way to sell, so the faster you can get your pitch out and pass the speaking baton, the better.
There's also a need for longer pitches, up to five minutes. Sometimes you'll have the opportunity to go deep on what you do, and you'll need to be ready for that too.
And you'll need to write different pitches for different audiences.
Potential investors need a different focus than sales prospects. You can start with a generic pitch however, and then split it into special cases as you get feedback - don't start with multiple pitches. This is hard enough already.
So how do you write all these elevator pitches?
Start with the one-sentence pitch. It's the most useful and you can use it to generate the others. You need to explain your distribution and positioning strategies, as that is the basic outline of your business. Essentially you need to say what category your product fits into, and who is going to buy from you.
Then you explain why you're different - that's the killer punch. Establish a credible business model and show why you'll make more money that the competition. You can see aspects of this in the elevator pitch template above, but this method of analysis is a better aid to thinking through your business model.
There's a temptation at this point to use the "Uber of …" shortcut. You'll hear this construction a lot. The basic idea is to compare yourself to an existing company, and piggy-back on the shared understanding of the company's business model. This can work, but it can backfire badly (and that's mostly what happens). For example, saying "we're the Uber of grocery delivery" might explain some aspects of your model, but doesn't explain how you'll build relationships with food producers. The real Uber, the order-your-taxi-on-a-mobile company, doesn't have suppliers like that.
In the early days of voxgig, I used to say we were the "LinkedIn of the events industry". People thought we were a recruiter. Or just another social networking play. I then started saying we were a mixture of LinkedIn and Salesforce for the event industry. Mostly that makes people thing we're a CRM solution for selling tickets. I would avoid using the "Uber of X" structure for your core elevator pitch. You might use it afterwards when you're speaking to a sophisticated investor or industry insider who understands that form of analogy. If you use this pitch and don't immediately get asked about your unique angle, it hasn't worked, and your listener has put you in the wrong category.
So start with your chosen category. In our case, it's event management software. How are you going to distribute your product? In our case, using a software-as-a-service model.
So what are we? "We are a Software-as-a-Service event-management platform that …" and now we need to explain why we're different.
How about: "We're a SaaS (use abbreviations if your listener will understand them, otherwise avoid jargon altogether) event-management platform that reduces manual labour by providing modern collaboration tools for organisers, speakers, sponsors and attendees."
Your competitive differentiator needs to hit certain notes, such as what the problems and pain points are, how you solve them, and who you solve them for. Note that this is different from your positioning. By placing ourselves in the event management category, we position ourselves to be a purchasing decision by the marketing and sales side of the business, not IT or operations. That's important as our value proposition only makes sense to certain decision-makers. For those decision-makers, our competitive differentiator lets them choose us over other players in the same space.
(Don't look for much of this messaging on our current website - we're about to start building the next version of our marketing materials. Don't worry, you'll get all the updates on that project right here.)
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Richard Rodger is the founder of voxgig. He is a former co-founder of Nearform, a technology consultancy firm based in Waterford.