All credibility, all good conscience, all evidence of
truth come only from the senses.
– Friedrich Nietzsche
When I started out working for start-ups and delivered elevator pitches to different audiences, I hardly considered the subject of credibility. I thought the superiority of our Solution would be self-evident and would be enough to convince people to believe what I had to say.
However, when I started working with the folks at Washington University in St. Louis and moved to the other side of the table –- and started listening to, judging, and making investment decisions based on pitches rather than just giving them –- I quickly came to understand why credibility is so important.
The problem is that when you listen to enough pitches, you quickly realize that a lot of them sound pretty good on the surface. Yes, some obviously make no sense, but many sound plausible.
However, the statistics will tell you that can’t possibly be the case. Something like 75 to 90 percent of new products end up as failures. That is because most new products end up having some hidden, but fatal, flaw.
As a result, most professional investors and senior executives have learned to be paranoid when it comes to judging pitches. They are always on the lookout for the fatal flaw that will end up tanking what, on the surface, seems like a promising idea.
Experienced investors and executives have learned that one way to reduce the likelihood that an idea has a fatal flaw is to pay close attention to the credibility of the team. They have learned that if they put their money behind people who understand how the world really works –- who understand how hard it really is to build and sell new products –- then they will significantly increase the likelihood that their investments will pay off.
THE BIG QUESTIONS
When writing your elevator pitch, it is essential that you address the issue of credibility if you want to achieve your goals. In general, that means answering two questions.
What are Your Qualifications
to See the Problem?
In your elevator pitch, you must explain what it is that enables you to see an opportunity that others have not been able to see.
Generally, the way to do that is by pointing out your extensive, personal knowledge of a particular market or customer. That is the thing that will give you a legitimate insight into the dynamics of the market and will give you a sense of the strengths and weaknesses of the various competitors.
The best way to establish your qualifications is by pointing out your direct experience with the market. The second best –- by a long shot –- way of doing that is via marketing research.
What are Your Qualifications
to Build the Solution?
In your elevator pitch, you must also explain why you will be able to solve the problem that you see.
Many problems are very obvious to anyone who looks for them, but persist because nobody has figured out a way to solve them. If your pitch is to be effective, then you must explain why you possess the technical and other abilities that will enable you to solve a problem that nobody else has been able to solve.
When you are explaining your qualifications to see the problem and to build the solution, there are certain things you must avoid because they can suggest that your Solution has an underlying fatal flaw.
Eating an Elephant
One thing that always makes me nervous –- and that makes people look naïve
-– is when a couple of people who have virtually no money at the present moment explain that they are going to directly attack a multi-billion dollar company or market. The problem isn’t the ambition; the best ideas often have gigantic implications. Instead, the problem is the lack of focus and the absence of a sense of strategy and tactics.
Even the most successful companies are rarely overnight successes. Instead, they tend to start small and solve the problems of a specific niche. Over time, they then expand to take over larger and larger portions of the market.
What I like to hear discussed in a pitch is both the size of the overall market and the size of the addressable or initial target market. I also do not want to hear that you expect to conquer a huge market in one fell swoop. Instead, I want to get the sense that you understand that you have to break a market up into a series of smaller, more bite-sized pieces.
Along those lines, one of the biggest mistakes people make is looking naïve. I can’t tell you how many times people have said to me, completely sincerely...
- This idea can’t miss!
- This is a business that cannot fail!
- If we can get just 1 percent of the market…
- This thing will sell itself!
- We have no competition!
Instead of getting me excited about their Solution, what statements like those do is convince me that the team either does not understand how hard it is to get people to change, does not understand the concept of substitutes, or hasn’t done any basic market research.
When you are delivering your pitch, it is important that you are enthusiastic. However, it is just as important that you look realistic. The reason is that many people operate according to the rule that if something sounds too good to be true, it probably is. As a result, if you lay on the hype too thick, you run the risk of looking like you are naïve, exaggerating, or both. Instead, you want to strike a balance; to look excited, enthusiastic, and confident but also aware of the risks you face.
Some people try to use a tease strategy with their elevator pitch. They figure they will try to intrigue the audience by not really saying anything and make the audience want to let them in on the secret. While this approach works with movies and books, it doesn’t work with elevator pitches. When going to a movie or reading a book, people expect
-– and want –- to be teased. That’s what they are paying for. However, when listening to an elevator pitch, people expect you to give them a basic set of information without their having to work very hard for it. The harder you make it for people to understand what you are talking about, the more likely they are to just ignore you.
The Hard Sell
One of the first rules of sales is to ask for the sale; to try to close the sale then and there. While this works when you are selling some products, it doesn’t work when you are delivering an elevator pitch. As I explain in the Conversational chapter, an elevator pitch is just a part of a larger process and there’s no way to rush the process since part of the goal is to build a relationship with the other party.
The Crazy Eddie
Some people take enthusiasm to the extreme and deliver a hyperkinetic, high-energy pitch in which they jump and storm around the stage. While this approach may appeal to some people, it is unlikely to work with venture capitalists and senior business executives. They tend to be thoughtful, conservative, and pragmatic people who value emotion and enthusiasm, but not in excess.
Looking too Slick
While it’s important that you look polished and professional, you don’t want to look too slick. A good team is made up of both business people who know how to present a solid image and technical people who are a little rough around the edges but who know how to get things done. It always makes me nervous if a team looks like it’s full of salespeople and no technical people, because it makes me wonder about their ability to deliver on their promises.
Asking for too Little Money
Asking for too little money can be worse than asking for too much money because it can make you look naïve. I once worked with a life science start-up that seemed to think that they could get to market for a total investment of less than $500,000. The truth is that it is hard to bring a life science product to market for less than $5 million and by asking for so little money the team left potential investors wondering whether they actually knew what they were doing.
When delivering your elevator pitch, nothing will destroy your credibility faster than blanking out; completely forgetting what you were going to say. I have only seen this happen a few times, but they are some of the most memorably awkward moments of my life. As a result, I recommend that when delivering your pitch to a large audience for the first time, you have with you a copy of your elevator pitch that you can just read from if all else fails.
Reading from a Script
While reading from a script is better than blanking out, it is only slightly better. If you stand up on stage with your nose buried in a sheet of paper, you are going to look like a geek who needs serious marketing help (and who may not know it or want it).
Many organizations hold elevator pitch forums in which people are given a minute or two to deliver their pitch. Few things bother me more than when people go over their allotted time during these events. Going long says two things to me, neither of which is good. First, going long says that you are unprepared and disorganized; that you haven’t bothered to rehearse your pitch and get the timing right. Second, going long makes you look self-centered and says that you don’t respect anyone else’s time, including the audience’s and the other presenters’ time.
Going long can be a problem even if there is no pre-set limit to the length of your pitch. If I were to meet a venture capitalist in a social setting, I would still try to limit my elevator pitch to two minutes. The reason is that keeping things concise makes you look professional and respectful of their time. If the venture capitalist wants to keep talking, then great. However, you don’t want to tie them up for half an hour and force them to listen to a pitch that they have no interest in because that will dramatically decrease the odds that they will speak positively of you to their friends, some of whom may actually be interested in your Solution.
I don’t care how desperate you may actually be; when delivering your pitch, you simply can’t look desperate. That means that you have to cut your pitch down to the absolute minimum number of words so that you can deliver it in a relaxed manner. Delivering your pitch in a relaxed manner will also help you look organized and professional.
Now that I’ve talked about the things that will damage your credibility, let me talk about the things that will build up your credibility. These are listed in roughly their descending order of persuasiveness.
The best way to establish your credibility is to find a paying customer. That doesn’t mean people who have expressed an interest in your Solution or who are willing to test it for free. Instead, that means people who are willing to actually write you a check or, better yet, people who have actually written you a check.
Prior Experience With the Customer
and the Problem
If you don’t have a paying customer, then the next best credibility builder is relevant experience in the category or market. What relevant experience does is suggest that you know what you are talking about and that what you say is actually true.
Experienced Management Team
If you don’t have direct experience with the customer and the problem, then the next best thing is general experience. Very often, general experience will help a team make the adjustments that have to be made as an idea inevitably morphs over time.
Obtaining patents and other forms of intellectual property protection will help to establish your credibility because they provide an independent validation that your Solution is at least unique. However, they are of only limited value because investors know that being unique won’t automatically translate into success in the marketplace.
Memorizing and Rehearsing Your Pitch
The best elevator pitches are the ones that are memorized and carefully rehearsed, but don’t look it. In my experience, you have to deliver a pitch 20 to 30 times before you start to get comfortable enough with it that you can deliver it without thinking about it (which enables you to pay attention to how it’s going over with the audience).
Dressing the Part
As I explained to my son when he was 11 and wanted to make the “A” baseball team at his school, it isn’t enough to know what you’re doing. Instead, you also have to look like you know what you are doing. Just as he needed to look like a baseball player at the evaluations, when delivering your elevator pitch you need to look like you can fit into the business world. That doesn’t mean that you have to go overboard, but you do want to look professional. At a minimum, that means wearing a nice pair of pants or a skirt, a button-down shirt, and a blazer or sport coat.
This document is
copyright © 2009 Chris O'Leary and the LIMB Press LLC. It
is licensed for personal use only. Any organizational or
institutional use must be approved by Chris O'Leary.