Saturday, November 6, 2010

The Elevator Pitch

Last Thursday, November 4, I attended an event organized by Ultra Light Start Ups (Twitter @ULS). This was actually one of the monthly meet ups that take place in various locations around New York City. On Thursday, Microsoft hosted the event and welcomed approximately 150 entrepreneurs who were in the company (via Skype) of another sizable group in Boston. The moderator, Graham Lawlor of Ultra Light Start Ups, assembled “The Email Mafia” (Jason Baptiste,; Greg Cangialosi, Blue Sky Factory; Chris McCann, StartUp Digest; Peter Shankman, HARO) to discuss what makes an email-based media startup profitable.  
To get to the point where one uses a distribution platform effectively, grows the email list consistently, and is able to sell the startup within two years for $20 million without external capital, one needs to perfect the elevator pitch. This became obvious on Thursday because the evening began with pitches from about ten startups. But what’s important about the elevator pitch, which lasts exactly for one minute, is that it serves many more purposes than what most people imagine.
First, the pitch describes the company and the people behind it: Who are you? What are you working on? Why is it important? How are you doing it? What is the value you bring compared to your competitors? What is your revenue model? Or else how do you make money? Finally, and once again, why is it that you are doing something important? As simple as these questions are the answers need to be finely crafted. The goal is to outline the aforementioned questions within 60 seconds and to do it effectively one needs to write, re-write, and re-write the pitch to perfection. Is that it?
No. An elevator pitch should be a live document. It should change in time to reflect how the company is growing and in which direction. This became obvious on Thursday when a couple of the presenters had been in business for a few years but still had difficulty expressing and clearly explaining to the audience what is it they do. Not only is the pitch addressed to the non-expert (and therefore you should forget and eliminate any jargon and acronyms from it) but it is also a means for the entrepreneur to check whether he/she has deviated from the original plan and to determine why. In other words, the pitch is a road map to remind you what you set out to accomplish. It is an outline of the original strategy. If the strategy has changed so should the pitch. Leaving it aside among the many items on the to-do list and checking it off once completed for the first time does not help anyone. It certainly does not help the entrepreneur in defining what works and what does not and in charting new directions for the future.
What became evident last Thursday during the pitch segment of the Ultra Light Start Ups evening was that the elevator pitch has been incorrectly associated with start ups exclusively. Imagine running a large fund and trying to convince new investors to join you. If their decision is based solely on the fund manager’s reputation, they are most probably making a mistake. But if it is based on a clearly articulated investment strategy (elevator pitch) chances are the fund manager is constantly refining the fund’s strategy and pursuing projects that fall within its purview.

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