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You walk into an elevator. As the doors close, Doug Leone of Sequoia steps in.
Suddenly, a lump appears in your throat. Your palms sweat.
This is your moment.
Last night, I went to a fascinating pitch event at a startup accelerator in New York City. Each one had just a single minute to deliver an “elevator pitch” to an audience of operators and investors.
In this challenging format, many managed to paint a compelling vision. So what key elements should you make sure to include, and what should you leave out?
Here are some do’s and don’ts.
1) State a company name, clearly. Sometimes the name doesn’t pass the “bad telephone” test. I’m left wondering “did they say ‘Aleck Watt” or “Alley Cot’?” and it’s actually “Aliquot,” to take a fictional example.
Make the name clear and easy to understand.
2) Clearly state the value proposition. Instead of just talking about the market, talk about exactly what you do.
If Uber pitched, they could tell us how broken the taxi market is. True, but what does Uber actually do?
Make that value proposition for the customer very clear. “Uber can get you from anywhere to anywhere quicker and easier than a taxi.”
You also want to identify the customer clearly. Is it individuals, businesses, governments?
3) Explain the business model. Too often, it’s unclear how a startup actually makes money.
To take the Uber example, just say “We take 30% of all rides on the platform.” Keep it simple and avoid discussing numerous different revenue streams.
If you don’t tell us how you make money, we’re left to assume that you don’t make any. No bueno.
4) Tell us what traction you have. If your revenue is growing 20% month over month, definitely mention that.
If you don’t have any revenue yet but your user sign-ups doubled this month, talk about that.
Of all the areas of a pitch, this is the one startups miss the most. Give us a reason to think your product is catching on!
1) Leave us wondering what your product does. If we don’t know that within that first minute, you’ve failed.
2) Don’t talk about Total Addressable Market (TAM). Founders often think they can get investors salivating by mentioning that they’re taking on a $500 billion market.
But we know those numbers are often plucked from the air (or a Gartner report). Save it for a second meeting.
3) Mention other business lines you may pursue in the future.
Just stick to the current business. There’s no time for anything else.
The elevator pitch is simple: introduce the company, what it does, and what traction it has. It should give the investor enough information to say, “I want to hear more.”
Best of luck!
What do you think makes a great elevator pitch, and what should be avoided? Let me know in the comments at the bottom.
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Photo: “Help is on the way, elevator, Chicago Tribune, Chicago, IL.JPG” by gruntzooki is marked with CC BY-SA 2.0.
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