“The purpose of an elevator pitch is to describe a situation or solution so compelling that the person you’re with wants to hear more even after the elevator ride is over.” This quote by acclaimed American author and entrepreneur Seth Godin encapsulates what an elevator pitch should do. Are you able to distil the very essence of your business into a short yet effective synopsis? Being able to do so will help you pitch confidently to potential investors.
Imagine you are in a lift, and in walks Warren Buffett. You are currently working on a new prototype: Lensensation, a pair of self-cleaning contact lenses whose colours can be changed remotely via a mobile app. Emboldened by his stately presence, you decide to pitch your business idea to the billionaire mogul. You only have the duration of the elevator ride to impress him. What would you say?
As Albert Einstein once said, “If you can’t explain it simply, you don’t understand it well enough.” An elevator pitch is your entire business plan told in a few sentences. It can also be used in other contexts, from networking sessions to casual business lunches. Hence, it is worthwhile to take the time and polish your script. These five components are must-haves in an elevator pitch.
Identify the problems your offering solves
It is very important for a product or service to solve an existing problem or bridge a gap — if not it has no value to consumers. Let’s take the example of Lensensation. Consumers have to soak their lenses in saline solutions after every use. Some of them even forget to remove their eyewear before going to bed — their carelessness may result in eye infections. With its self-cleaning ability, Lensensation eliminates the problem of inconvenience and discomfort.
Explain the solution’s benefits
“So, what we did was add MEMS sensors to the hydrophilic plastic polymers called hydrogels. These sensors feed data to the IoT ecosystem comprising Android, iOS and Windows. Be it prescription or plano, the lenses can change colours to the shade the wearer chooses on his app. We believe these are the very lenses Leonardo da Vinci himself envisioned!”
Confused? Give a speech like that, and chances are your potential investors will be too. Keep in mind that investors are not industry experts, and technical jargons as well as abbreviations are lost on them. Instead of selling the solution’s colour-changing feature and how it is made, sell its benefits.
“These contact lenses will be a companion for wearers all year round, whether they need sultry blue eyes for a date, or green eyes as they dress up as the Wicked Witch during Halloween. And with the lenses’ self-cleaning ability, consumers now only need to change their eyewear once a year.”
Know your target audience
Besides the primary market of contact-lens wearers, Lensensation will likely appeal to female fashionistas aged between 18 and 30. Who are the very people who will benefit from your offering? An investor wants to know that your product or service will be embraced by a sizeable consumer base. Back up your claims with market research on your targeted demographics and their purchasing behaviours.
P.S.: Citing “everybody” as your target audience only proves that you have not given your business plan enough thought. A one-size-fits-all marketing plan does not work: teenagers will have different needs and wants from their grandparents. Investors will see this as a chink in the armour.
Identify the competition
Purveyors of contact lenses and designer glasses are competitors of the Lensensation brand. Studying your competitors’ business models will help you understand the key differentiators of your offering. What makes your offering more superior than the others? How differently do you intend to market your offering? Being able to articulate your business’s unique selling propositions will leave a lasting impression.
Share your key milestones
Of course, Lensensation sounds like a far-fetched Kickstarter product doomed to fail. But what if we told you the idea is backed by a team of respected engineers, and that they have already created a prototype? These concrete achievements lend credence. Your business idea, no matter how grounded and realistic, may come across as whimsical to a third party. In your pitch, talk about the traction and progress your business has made. This will prove that your idea is indeed a viable one, and will — with the investor’s resources — become a reality.