The Art of the Elevator Pitch

2007

Teaching Notes of Prof. Virgil Leslie B. Fonacier

What is an Elevator Pitch Anyway?

A short, simple description of your business idea that anyone could understand by the time you ride up three floors in a typical elevator.

2007

Teaching Notes of Prof. Virgil Leslie B. Fonacier

Very Important Point

An elevator pitch is not a sales pitch You are NOT pitching a great idea, team or product (especially in an elevator!!) You ARE pitching what your business will do for customers, investors, and/or society SO, pitch how your business will solve a tangible problem or address a burning need that exists TODAY!!

2007

Teaching Notes of Prof. Virgil Leslie B. Fonacier

Example
WRONG:
We are the smartest telecom guys in the world and were gonna install high bandwidth wireless telecom infrastructure in really tall downtown buildings in big cities all over the world

BETTER:
We enable customers to use their cell phones anywhere inside every building in all major metropolitan areas in the country.

2007

Teaching Notes of Prof. Virgil Leslie B. Fonacier

Elevator Pitch Must Haves and Caution

Interesting opening: such opening immediately piques interest of recipient Passion: if you are not excited about your business, no one else will be either Short: assume you have less than a minute, and sometimes only time for a few sentences

Caution: Do not take too long to get to the pain/problem that you are solvingyou could lose the catchers attention
2007

Teaching Notes of Prof. Virgil Leslie B. Fonacier

Elements of the Pitch

All Pitches Should Include the Following 6 Elements: The Hook: pain point or heart grabber These Brief description of product/service elements must be Brief market description included Brief description of competition in your How you are different from other solutions pitch How you will make money Optional Elements to Include (depending upon time and nature of catcher): 7. Description of why financiers should invest in you 8. Description of investment needed and estimate of payback 9. Request for follow-up
2007

Teaching Notes of Prof. Virgil Leslie B. Fonacier

The Hook
The hook should simply identify the pain you address
We make Napster legal We will change the way people invest their money

When possible, paint a personal picture for your audience

Have you ever had your cell phone fail inside a building? Imagine a rubber coating that conducts electricity.

Tag lines can be used as a form of a hook (tag lines are also effective closers to the pitch)
GE brings good things to light

Inquirer Balanced news; fearless views

Don Bosco Before:Become a Christian engineer Now: Ascende Superius
2007

Teaching Notes of Prof. Virgil Leslie B. Fonacier

The Product/Service Pitch

Guidelines to keep in mind when developing the product pitch:
KISS Keep It Simple, Stupid Kill the geek speak (e.g., limit technical talk) Focus on customer benefits, not technical benefits

2007

Teaching Notes of Prof. Virgil Leslie B. Fonacier

KISS of the Devil: Too Much Information

WRONG:
Our technology is the first integrated and automatic book scanner that will scan and digitize bound documents at a speed of 1,200 PPM at a fraction of the cost of existing solutions based on a disruptive digital imaging technology initially developed at Bell Labs and protected by 12 patents.

BETTER:
We capture the future of knowledge by seamlessly digitizing physical libraries at a very low cost.

2007

Teaching Notes of Prof. Virgil Leslie B. Fonacier

Geek Speak Is Boring

WRONG:
We provide non-penetrable intrusion detection for digital voice, fax and wireless communication devices with our 2048-bit Hellman encryption algorithm that is combined with the latest 168-bit Hellman DES.

BETTER:
We allow you to communicate safely on a broad range of digital devices.

2007

Teaching Notes of Prof. Virgil Leslie B. Fonacier

Customer Benefits, Not Technical Benefits

Technical Benefits
Seamless integration Scalable, adaptable Secure networking Improves network performance
SO WHAT???

Business Benefits
Increase your revenues Increase your efficiency Reduces your risk Cut your costs by 30%

2007

Teaching Notes of Prof. Virgil Leslie B. Fonacier

The Market Pitch Tie to a Burning Need!!

ID the problem or need you solve in 1-2 sentences
We allow any cell phone to work anywhere inside buildings that utilize our wireless network solution.

If possible, reference a brand-name customer that is using your product (or that has expressed interest)
The CAA has determined that we are the only security system that is able to rapidly move people through security check points while exceeding their security needs

If you cannot reference an existing customer, quantify your market size with numbers that are from a reputable 3rd party source
According to the Hospital Association, there are 500 hospitals that need the ability to visualize MRI images in 3D

2007

Teaching Notes of Prof. Virgil Leslie B. Fonacier

Know Thy Competition & Acknowledge It

Facebook

You

2007

Teaching Notes of Prof. Virgil Leslie B. Fonacier

Briefly Acknowledge Your Competition

Identify a couple of your competitors as well as what they provide
There are many vendors that provide internal wireless networks like Linksys and Cisco. While no other firms offer a service package as comprehensive as ours, companies like PetSmart and Club K9 Doggie Daycare do offer some pet daycare and grooming options.

2007

Teaching Notes of Prof. Virgil Leslie B. Fonacier

Neutralize Your Competition

Pitch 1-2 unique differentiators that describe your advantage
We use the same insulin compound provided in Mercks drugs, but we allow children to take an oral dose instead of a shot
There are many flavors of PDA keyboards, but ours is the only one that folds into the PDA device when it is not in use

While there are many wireless router boxes on the market, ours is able to send signals through cement and steel walls
Unlike the competitors, our firm offers customers a full-service pet daycare, grooming services, and a pet training facility that is run by world-class trainers.

2007

Teaching Notes of Prof. Virgil Leslie B. Fonacier

So, How Will You Make Money?

Describe your firms revenue model (e.g., how your firm earns its money)
We will install the wireless network in a building at no charge, and then charge a usage fee for all calls that we carry
We provide free access to our medical information website for consumers, and charge advertisers for each exposure Our portable fuel cells will be installed in laptops, and we will receive a royalty from Dell for each installation We will distribute and sell our products through big box retailers as well as directly through our online store For grooming, customers will pay for the services rendered and for pet training and daycare, customers will have the option of different service-level packages.
2007

Teaching Notes of Prof. Virgil Leslie B. Fonacier

Why Invest in You?

(Optional depends on time constraints & uniqueness of firm)

Fact: investors invest in people, not products Describe your new venture teams unique qualifications
Our founders have over 20 years of combined experience in the telecom industry.
Our board includes two top executives in the restaurant franchise industry. Our technical staff has a combined portfolio of over 30 medical device patents. Our founder, Vicky Belo, comes from a family with nearly over 30 years of experience in this industry, providing our firm with connections to many of the industrys key players.

2007

Teaching Notes of Prof. Virgil Leslie B. Fonacier

Investment Required & Payback Estimate

(Optional depends on to whom you are pitching the firm appropriate for investor pitch)

1. Describe the investment required at this stage of the business planning process 2. Describe for what purpose(s) that money will be used 3. Describe how, when, and with what rate of return you expect to payback investors
We are seeking P500,000 in initial start-up capital to fund prototype refinement, initiate initial marketing efforts, and website development. Based on our sales estimates, we plan to pay investors back 30% in year one at 20% ROI and 70% in year two at 30% ROI. We are seeking a P1,500,000 investment to fund manufacturing, marketing, and initial product distribution. Within five years, we seek to achieve an IPO, at which time investors can expect a payback at about a 20% ROI.

2007

Teaching Notes of Prof. Virgil Leslie B. Fonacier

The Request: Will You Help Me?

End with a request that is tailored to the catcher:
Could I follow up with you at a more convenient time to present our company in more depth? Given your background, I would greatly appreciate your feedback. What do you think of our business model? I know you have a lot of contacts in the energy utility business. Who would you recommend for us to ask to join our board? Could I have your card? I would like my CTO to follow up with you on your technical questions. Could I have your card? I would really value your feedback and expertise as we continue to develop our business model.

2007

Teaching Notes of Prof. Virgil Leslie B. Fonacier

Elevator Pitch: An Example

Note: This pitch includes the components that should be included for the class assignment

Hook: Have you ever had your cell phone fail inside a building? Product: We provide a wireless communications network that enables any cell phone to work anywhere inside all types buildings, while ensuring your communications are secure. Market: The NTC has determined that over 60% of the 5 million commercial buildings inhibit wireless or cell phone communications from within. The percentage is even higher in international markets, suggesting a huge need for better wireless communications networks. Competition: There are many vendors that provide internal wireless networks like PLDT/Smart and Globe Telecom using equipment from Linksys and Cisco. Differentiators: However, we are the only vendor that enables communications to penetrate steel and other high density construction materials, which significantly reduces the cost of installation. Revenue Model: We will install the wireless network in a building at no charge, and then charge a usage fee for all calls that we carry on our networks.

2007

Teaching Notes of Prof. Virgil Leslie B. Fonacier

Elevator Pitch: An Example

Note: This pitch type would be appropriate for an investor

Hook: Have you ever had your cell phone fail inside a building? Product: We provide a wireless communications network that enables any cell phone to work anywhere inside all types buildings, while ensuring your communications are secure.

Market: The NTC has determined that over 60% of the 5 million commercial buildings inhibit wireless or cell phone communications from within. The percentage is even higher in international markets, suggesting a huge need for better wireless communications networks.
Competition: There are many vendors that provide internal wireless networks like Linksys and Cisco. Differentiators: However, we are the only vendor that enables communications to penetrate steel and other high density construction materials, which significantly reduces the cost of installation Revenue Model: We will install the wireless network in a building at no charge, and then charge a usage fee for all calls that we carry on our networks Why You? Our founders have over 25 years of design experience in communications systems, and MVP has recently agreed to join our Board of Directors. Investment Required and Payback Estimate: We are seeking a P1,500,000 investment to fund manufacturing, marketing, and initial product distribution. Within five years, we seek to achieve an IPO, at which time investors can expect a payback at about a 20% ROI. Request: It is my understanding that you invest in young communications companies. Can I follow up with you next week to discuss our business in depth?
2007

Teaching Notes of Prof. Virgil Leslie B. Fonacier

Group business idea and elevator pitch

Each group must come up with a business idea and a related concept statement (2 pages) Can be any kind of a business idea you think would be interesting and worth pursuing. You may use your thesis proposal, if it has business potential. Best ideas have growth potential. On Dec 8 for section A and Dec 12 for section B, each group delivers an elevator pitch about their idea and submits a one or two page concept statement to the professor. (See instructions on lecture presentation and on course website). After hearing every groups business ideas, the professor will decide whether to approve or reject it. If approved, the group will prepare the final feasibility analysis & business plan based on one selected idea. If rejected, the group will have to present a revised business idea and elevator pitch.

2007

2-22 Teaching Notes of Prof. Virgil Leslie B. Fonacier

Questions?

2007