Whether you are pitching your startup or looking for new clients, the elevator pitch is something that every business leader needs to master. It must be short, to the point, clearly define a problem, and eloquently describe how your business will solve it. Your elevator pitch is something that requires daily practice to master and can be the key to unlocking funding, referrals, and new customers. It is one of the most important skills that any founder or leader can develop.
Origins of The Elevator Pitch
The term, ‘elevator pitch,’ originated literally in an elevator. In 1852, Elisha Otis had developed a braking system for elevators which were considered somewhat dangerous at the time. Unfortunately, he was unable to generate much interest in his new technology even though it had immense potential to prevent payloads from being damaged by plummeting down elevator shafts, it could allow for people to use the perilous elevators.
Otis came up with the ingenious idea to demonstrate his invention in the elevator itself. With an assistant, he invited potential customers to view the new braking system firsthand. Today, Otis Elevator is a 168 year old company with over $12.8 billion dollars in sales.
Like Elisha Otis, one of the best ways to pitch your startup, product, or service, is to figure out creative ways to get in front of your potential customers and investors. Because people have a relatively short attention span, being able to be succinct and present something visual like Otis did in 1852 can dramatically increase your odds for success.
As with any skill, it will require significant repetition in order for you to master your pitch. When I first launched a new direct sales business in 2003, I was incredibly nervous to talk to people about it even though I had come from a sales background. I took the following steps, wrote out my elevator pitch, and practiced several times per day in front of the mirror. That business eventually generated over $1.7 billion in revenue for the parent company and thanks to relentless practice, I eventually overcame my fear of talking to people about our product offering.
5 Key Steps to Perfecting Your Elevator Pitch:
Step One – What problem does your business solve?
Does your product or service help other businesses or individuals get rid of some form of pain? For example, at RadiusAI (RAI), we help enterprise level customers solve the problem of knowing what is happening in their retail locations using ambient intelligence. We are able to gather data that cannot be discerned from point of sale alone.
Another example is Marcia. She is a client of Agency8, the agency that my daughter, Avery, and her business partner, Diana, run. Marcia is passionate about math. She has devised methods to help young people understand math in a way that aligns with their learning style. As someone who failed calculus in university, I will attest that Marcia is definitely solving a problem.
You must be able to clearly articulate the problem you are trying to solve in one to two sentences. I suggest beginning with, ‘you know how,’ and then insert your problem statement. By adding ‘you know how,’ we help the potential customer begin to visualize and relate to the problem we are trying to solve.
Step Two – Why are other solutions not as effective?
In this step, you do not want to dismiss your competitors by name. That comes off as callus and arrogant. Instead, you describe why their solutions are not as effective. At RAI, we use edge based compute to process massive amounts of video. This saves our customers a significant amount of money. When I am pitching RAI to potential clients, I say, ‘unlike cloud based solutions which can cost tens of thousands in cloud costs per month, our solution uses edge technology. After one month, the edge device is paid for and other than monthly SaaS fees (software as a service), you will not have additional cloud costs for our solution.
You see, I am not putting down other companies by name. I am illustrating why other solutions are inferior. What your potential customers and investors want to know is why they should be considering your solution in the first place.
Step Three – Why is your solution different?
You have now illustrated why other solutions are not effective and now it is time to shine. In this step, you highlight the benefits to your customer. I suggest you identify three key benefits because you want to cast a wide net so to speak. Potential customers often have only a few key pain points – they want to save time or they want to save money or they want to generate more revenue. Often, it is a combination of all three.
In this step, Elisha Otis would have illustrated how his device would save both time and money. By ensuring that the elevators would have an effective braking system, he would save the customer money so they didn’t lose elevators and freight when they fell destroying everything and he would save them the time of replacing the cargo and the elevator car.
In order to have an effective elevator pitch, you must know what benefits your solution has for your ideal customer.
Step Four – What is the evidence that you are able to deliver on your solution?
This step is designed to show your potential customers the true value of your product or service. In this step, you could talk about how many customers you already have or like Otis, demonstrate your product. Ultimately, you have to give your customer confidence before they pay you and evidence is critical.
People have various learning styles however 65% of the population are visual learners. Whether you use a live demonstration, video, or some form of visual representation, you are increasing your odds of success significantly if you use a visual aid in this step.
Step Five – What specifically are you looking for?
Lastly, this step is called ‘the ask.’ In the thousands upon thousands of people that I have coached in programs and from stage, I say this, ‘you have not because you ask not.’ This is the step where you ask for the sale or the investment. The most successful entrepreneurs have no fear of asking because they know that the more people they pitch, the more likely it is that they will get a ‘yes.’
The Otis Elevator company is approaching 170 years of operation thanks to that initial elevator pitch. The more you get out there and pitch, the greater the odds that you, like Otis, will eventually have that core group of customers that begin to spread the word about your company and help build the foundation of a solid legacy.