As a startup founder, being able to quickly explain what company's goal and vision is imperative. Master the art of the elevator pitch with these tips.
As a startup founder, you'll often have to explain what exactly your company does. Entrepreneurs are passionate people, and sometimes that passion gets in the way of a clear, concise message of what it is you are trying to accomplish.
This is where the elevator pitch comes in as a short summary of your company, the work you do, and why it matters. Elevator pitches are important in the business world because they are the way you introduce yourself to the rest of your industry. For startups, it's even more important because it could be the tool to open the door to that meeting with a VC, or it could spark the conversation that lands you an acquisition deal.
The idea behind the term is that it is an explanation you could deliver in the time it takes to ride the elevator. So, say you meet a powerful investor by chance on an elevator ride you're sharing. Your elevator pitch is the speech you use to explain your startup while you have him or her trapped on the elevator with you.
Here's how to make your elevator pitch stand out.
Explain your value proposition
"The best elevator pitches tell the audience what is valuable and to whom," said Larry Weidman, executive in residence at Innovation Works. "Entrepreneurs often can do a decent job of describing what their company or invention does, and even offer what they think is cool, but then forget to address value. At the heart of every successful venture is a compelling value proposition best described by the entrepreneur. The audience wants to know."
Properly explaining the value of your startup is, perhaps, the single most important part of an elevator pitch. Part of this comes with explaining the pain point, if it isn't already apparent. This will also come, in tandem, with a quick explanation of the market and opportunity.
The next step is connecting how you solve a problem to how you make money. If people you meet, especially investors, don't see a clear path to revenue they will be less likely to see it as something worth following up on. According to Rui Ma, a venture partner at 500 Startups, you shouldn't be afraid to use numbers.
"Experienced investors are looking for data they can use to benchmark you against other players in the industry," Ma said. "For less experienced investors, provide the numbers but also provide context -- i.e. why are you tracking these numbers, why are you investing to grow them. Either way, revealing your numbers, no matter how poor, actually builds credibility and delaying the revelation of important traction metrics wastes everyone's time."
While you don't have to break down your entire revenue model, you should give some hint as to how your company makes money. So, value exists in two planes.
- Intangible - You must establish that your product or service solves a real problem that exists in a viable market.
- Tangible - You must explain how your company grows in monetary value by solving said problem.
Weidman adds, "They'll remember the value proposition long after they've forgotten the specific features."
Tell a story
Explain the story that built your company and the story your company is constantly contributing to. By telling your story when you pitch, you are giving your audience better insight into who you, and your team, really are.
"Humans are wired to remember stories and to respond to them emotionally, so the more your pitch can include or resemble a great story, the better people will react," said Kathryn Minshew, founder & CEO of The Muse. "Sometimes I tell my own story; sometimes one of our users; sometimes I simply start out with something like 'Last year, 20% of Americans said they'd rather die than go to the dentist, but they'd rather go to the dentist than look for a new job' that makes people think of their own fear of these things in relation to The Muse."
As many investors or startup mentors will tell you, the team behind the idea is often more important that the idea itself. Condensing your story down to fit within an elevator pitch will be a challenge, but it will give you the opportunity to showcase how you have pursued the goal of building your startup, no matter what, and why you've made the decisions you have. That's going to make the biggest impression.
"Think of it like a consulting interview -- consultants are recruited for their ability to problem solve, and that's what entrepreneurs are. Most companies experience many (often significant) changes in their product or service, and in the absence of mind-blowing success, it is more interesting for us to understand how an entrepreneur thinks and works through issues with limited resources on hand, versus just being told the results of those decisions."
If you are telling your personal story, your passion is more likely to show. You might never get anyone to care as much as you do, but that shouldn't stop you from doing everything you can to get them to.
As you tell your story, remember that your audience might not be in on some of the narrative elements. Cut the jargon, unless you are absolutely sure that the person you are addressing is privy to it. Also, try to be as clear as possible about who you are and what your objectives are. You want this pitch to be something that is easily repeatable so that, if you make an impression, the person you spoke with will be able to share exactly what you shared with them.
Try to explain what it is about your story that is unique. Maybe you were the first company to successfully follow this model. How is your product better than your competitors, or how do you and your team better execute? These are important points that will stick with your audience.
This is going to take some practice on your part to get this down, so dedicate some time to both honing and practicing your pitch. Also, know when it's time to wrap it up.
"Don't go on too long. Pay attention to your listener's body cues and know when to cut yourself off. One of the easiest ways to ruin an elevator pitch is to go on too long, past when your listener is done listening," Minshew said.
Be confident. This is your startup and your story, and no one knows this better than you. So, after your deliver your elevator pitch, stick your hand out for a handshake and don't be afraid to ask for a business card or a time to follow up.