If you’re like most entrepreneurs, you enjoy talking to others about your business, and can speak at great length about allf the wonderful things your company does. It’s probably easy for you to spend hours talking about how your new product is going to revolutionize your industry the way that Apple revolutionized the music world with the iPod and iTunes.
But have you taken the time to perfect your elevator pitch? It is a lot harder, and a lot more valuable, to be able to succinctly make your case to potential investors in sixty seconds or less. If your elevator pitch needs some work—if you’ve ever been given the cold shoulder by an investor then it probably does—try following these five rules to hone that pitch so that you make the most out of future opportunities.
1.) Keep it short. As in one minute tops. By this point in a pitch, if you haven’t piqued your listener’s interest then you’ve lost him. Practice you pitch and time yourself until you can confidently present the whole thing in under a minute.
2.) Start from the top. You should begin the pitch by explaining what your company does in the simplest possible fashion. Something along the lines of “We are a software company that developed a product to make filing your taxes as painless as purchasing a book.” That’s it. Stay away from any industry jargon or technical explanations, they’ll only serve to confuse and alienate your audience.
3.) Explain the problem that you are solving. You are solving a problem with this great new product you’ve been spending all of your time, right? If not, then people aren’t going to care about the product. To continue with our example, “Our Easy Tax software has helped the average user save three hours of time and nearly $600 on his federal taxes.” People are wasting time and money on their taxes—a major problem—you solve that problem, and your customers wind up with both more time and more money.
4.) Demonstrate how you are different. Facebook didn’t invent the social network, Apple didn’t make the first MP3 player, and Google wasn’t the first to try and organize the web. But they’ve all been phenomenally successful because they convinced investors, and customers, that they found a better way to do these things. Chances are your company isn’t the only one doing what you do either. But hopefully you are doing what you are doing because you’ve found a better way to do it. Don’t let your ego get in the way and say things like “We’re the only ones that can do this.” Instead, explain why you do it better: “Compared to the current leader in the industry, our product is 20% cheaper and requires 30% less time for the user to complete his tax return.”
5.) Be prepared for the most common objections. And be ready to calmly and politely refute them. By practicing your pitch on enough friends, colleagues, and family members you’ll get a sense of the initial objections that investors are most likely to pose, and to come up with a response that mollifies those objections. In our Easy Tax example a common objection might be “I don’t understand the first thing about filing my taxes and I don’t care to learn, that’s why I pay an accountant.” And a reasonable response would be “If you can fill out a credit-card application, you have the financial skills necessary to use our product.”
So keep practicing until you can tell a compelling story about your business in one minute or less. And then move on to working on the rest of your marketing and investor materials, because hopefully your new finely tuned elevator pitch will lead to more time in-depth meetings down the road.