Don’t make the audience feel stupid. Focus on the market problem and use metaphors.
Here’s the second part of my answer for all those entrepreneurs who want to know how to grab the attention of investors in this very tight market.
Last week I covered:
Now, to finish the formula with….
To give you an example of what not to do with technology products, here is a direct quote from David Cowan, Bessemer Venture Partners.
“When Jim and I launched Digital Certificates Inc (later renamed Verisign), I proudly (and thoroughly) explained public key crypto to whoever I was recruiting as a partner, employee or co-investor.
“You see, people encrypt messages today using a numeric key that they must first share with each other…blah blah… Now using one-way functions like multiplication of large prime numbers…blah blah… So if the public key decrypts the message, then that must mean…blah blah…”
Surely the brilliance of the idea must compel them!
Compel? More like confuse, bore and repel.
I don’t think anyone (including me) really understood what our little startup needed to do until we hired our CEO Stratton Sclavos. Stratton dispensed with the maths, as well as the notion that people feel the need to buy obscenely large integers with incomprehensible mathematical properties.
Instead, Stratton announced that we are bringing “trust” to cyberspace and our first product is a “driver’s license” for the internet. One of these driver’s licenses evolved into SSL certificates.
Stratton’s simple message focused on the market problem, not the underlying technology. Rather than make the audience feel stupid, Stratton crafted a metaphor that anyone can understand, even on a short elevator ride.
Who are your customers?
At some point in the elevator pitch, mention who your customers are.
You don’t need to go into detail, but give your listener the broad outline of the companies/people that are your target market.
Here is an example…
You have technology for call centres.
“Our company will focus on smaller call centres that are not serviced by the very expensive technology currently on the market.”
It takes just a few words to explain your target market. First, we know that this company will focus on call centres. Secondly, it will focus on the small end of the market.
That’s all you need to do.
What are the benefits?
Focus on a clear value proposition for your customers. This is a critical element of a good elevator pitch.
If you can’t make such a statement then get your team working on finding your value proposition.
Here’s some examples…
“Tectronica offers solutions that will improve productivity by 22%.
“Our clients are able to reduce staff by 18% and maintain productivity levels. And, in most cases, they increase productivity.
“Our clients have experienced pay back periods of just nine months when investing in our technology.”
A few simple words but they can be so frustratingly hard to get. Go read Rob Ryan’s book “Smartups” to get some great tips on value propositions.
The world loves benefits. So give the world benefits and you will be a winner.
You will not have time to go into a long list of benefits. Get together with your team to decide what your primary value proposition will be. You may be surprised at the difference of opinion on this one. Spend some time getting this right. It will pack a lot of punch and you’ll get people really listening to what you have to say.
Call to action
As part of your close, include “the next step” for your investor. The call to action will be dependent on the reaction from the investor. You may need to tread lightly if the reaction was lukewarm and provide more evidence that you have a great investment opportunity.
Some examples:
Start working on your elevator pitch today. A good elevator pitch will get you into more investors’ offices.
Gail Geronimos, is the founder of Achaeus, which helps entrepreneurs develop their businesses and she has just started a new site www.pitchingtoinvestors.com with tools and tips about how to develop killer presentations to raise capital.
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