03 the elevator pitch

8/2/2019 03 the Elevator Pitch

1/23

2007

The Art of the Elevator Pitch

Teaching Notes of Prof. Virgil Leslie B. Fonacier


2/23

2007

What is an Elevator Pitch Anyway?

A short, simple description of yourbusiness idea that anyone couldunderstand by the time you ride up three

floors in a typical elevator.



3/23

2007

Very Important Point

An elevator pitch is nota sales pitch

You are NOT pitching a great idea, team or product(especially in an elevator!!)

You ARE pitching what your business will do forcustomers, investors, and/or society

SO, pitch how your business will solve a tangibleproblem or address a burning need that exists TODAY!!



4/23

2007

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 phonesanywhere inside every building in all majormetropolitan areas in the country.



5/23

2007

Elevator Pitch Must Haves and Caution

Interesting opening: such opening immediatelypiques 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, andsometimes only time for a few sentences

Caution: Do not take too long to get to thepain/problem that you are solvingyou could lose thecatchers attention



6/23

2007

Elements of the Pitch

All Pitches Should Include the Following 6 Elements:

The Hook: pain point or heart grabber

Brief description of product/service

Brief market description

Brief description of competition

How you are different from other solutions

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

These

elements

must be

includedin your

pitch



7/23

2007

The Hook The hook should simply identify the pain you address

We make Napsterlegal

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 arealso effective closers to the pitch)

GE brings good things to light InquirerBalanced news; fearless views

Don Bosco Before:Become a Christian engineer

Now: Ascende Superius



8/23

2007

The Product/Service Pitch

Guidelines to keep in mind whendeveloping the product pitch:

KISS Keep It Simple, Stupid

Kill the geek speak (e.g., limittechnical talk)

Focus on customer benefits, not

technical benefits



9/23

2007

KISS of the Devil: Too Much Information

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

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



10/23

2007

Geek Speak Is Boring

WRONG:We provide non-penetrable intrusion detection for digital voice,fax and wireless communication devices with our 2048-bitHellman encryption algorithm that is combined with the latest168-bit Hellman DES.

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



11/23

2007

Customer Benefits, Not Technical Benefits

Seamless integration

Scalable, adaptable

Secure networking

Improves networkperformance

SO WHAT???

Increase your

revenues

Increase your

efficiency

Reduces your risk

Cut your costs by

30%

Technical Benefits Business Benefits



12/23

2007

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 yourproduct (or that has expressed interest)

The CAA has determined that we are the only security system that is ableto rapidly move people through security check points while exceeding theirsecurity needs

If you cannot reference an existing customer, quantify your market sizewith numbers that are from a reputable 3rd party source

According to the Hospital Association, there are 500 hospitals that needthe ability to visualize MRI images in 3D

The Market Pitch Tie to a BurningNeed!!



13/23

2007

Know Thy Competition & Acknowledge It

Facebook

You



14/23

2007

Briefly Acknowledge Your Competition

Identify a couple of your competitors as well as whatthey provide

There are many vendors that provide internal wirelessnetworks like Linksys and Cisco.

While no other firms offer a service package as comprehensiveas ours, companies like PetSmart and Club K9 DoggieDaycare do offer some pet daycare and grooming options.



15/23

2007

Neutralize Your Competition

Pitch 1-2 unique differentiators that describe youradvantage

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 isable 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 byworld-class trainers.



16/23

2007

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 nocharge, and then charge a usage fee for all calls that wecarry

We provide free access to our medical informationwebsite for consumers, and charge advertisers for eachexposure

Our portable fuel cells will be installed in laptops, and wewill receive a royalty from Dell for each installation

We will distribute and sell our products through big boxretailers as well as directly through our online store

For grooming, customers will pay for the servicesrendered and for pet training and daycare, customers

will have the option of different service-level packages.Teaching Notes of Prof. Virgil Leslie B. Fonacier

?


17/23

2007

Why Invest in You?(Optional depends on time constraints & uniqueness of firm)

Fact: investors invest in people, not products

Describe yournew venture teams unique qualifications

Our founders have over 20 years of combined experience in the telecomindustry.

Our board includes two top executives in the restaurant franchiseindustry.

Our technical staff has a combined portfolio of over 30 medical devicepatents.

Our founder, Vicky Belo, comes from a family with nearly over 30 yearsof experience in this industry, providing our firm with connections tomany of the industrys key players.



18/23

2007

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 planningprocess

2. Describe for what purpose(s) that money will be used

3. Describe how, when, and with what rate of return you expect topayback investors

We are seeking P500,000 in initial start-up capital to fund prototyperefinement, initiate initial marketing efforts, and website development.Based on our sales estimates, we plan to pay investors back 30% in yearone 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.



19/23

2007

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 ourcompany 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. Whowould 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 onyour technical questions.

Could I have your card? I would really value your feedback andexpertise as we continue to develop our business model.



20/23

2007

Elevator Pitch: An ExampleNote: 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 cellphone to work anywhere inside all types buildings, while ensuring yourcommunications are secure.

Market: The NTC has determined that over 60% of the 5 million commercialbuildings inhibit wireless or cell phone communications from within. The

percentage is even higher in international markets, suggesting a huge need forbetter wireless communications networks.

Competition: There are many vendors that provide internal wireless networkslike 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, whichsignificantly 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.



21/23

2007

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 workanywhere inside all types buildings, while ensuring your communications are secure.

Market: The NTC has determined that over 60% of the 5 million commercial buildings inhibitwireless or cell phone communications from within. The percentage is even higher ininternational 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 ofinstallation

Revenue Model: We will install the wireless network in a building at no charge, and thencharge 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 tofund manufacturing, marketing, and initial product distribution. Within five years, we seek toachieve 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?

Elevator Pitch: An ExampleNote: This pitch type would be appropriate for an investor



22/23

2007

Group business idea and elevator pitch

Each group must come up with a business idea and a related conceptstatement (2 pages)

Can be any kind of a business idea you think would be interesting and worthpursuing. 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 anelevator pitch about their idea and submits a one or two page concept

statementto the professor. (See instructions on lecture presentation and oncourse website).

After hearing every groups business ideas, the professor will decide

whether to approve or reject it. If approved, the group will prepare the finalfeasibility analysis & business plan based on one selected idea. If rejected,the group will have to present a revised business idea and elevator pitch.

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


23/23

2007

Questions?

03 the elevator pitch

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