If you’ve been in the business world for any length of time then you’ve probably heard about the elevator pitch. But have you heard of the four laws of the elevator pitch? And have you heard that if you ignore these laws your elevator pitch will fall flat on its face and investors will ignore you?
You probably don’t want that to happen. And convincing investors to listen to you is not easy to do. But if you obey the following laws and follow the advice I’m about to give you on crafting a perfect elevator pitch, then your chances of success will increase.
Let’s look at the laws real quick.
Law 1: Short
Most people have short attention spans. Busy investors have even shorter ones. That means you must communicate your pitch in less than 60 seconds.
Sure, your pitch has to do a lot in that time span, but if you can‘t write down the basic idea around your company on the back of a business card, then you don’t truly understand what you do…
And if you don’t understand it, how do you expect other people to understand it?
Law 2: Easy to understand
The last thing you want when pitching is to confuse the listener. Once you’ve confused them, you’ve lost them. Even the most complex or strange ideas should be broken down into easy-to-understand statements.
For example, VeriSign was struggling until leadership came in and changed the message of what they did. Up until that time the message was built around the math of encryption code, something not too many people understood. Instead, the new message announced they were brining “trust to the Web through the first driver’s license for the Internet.”
Everyone gets that.
Law 3: Greed inducing
Investors want to make money, so your pitch needs to tell them that your idea will make money and how it will make money. The more money it can make the better.
Law 4: Irrefutable
At the end of your 60 seconds, the investor should not have more questions. All the pieces of your pitch should fit together, and they should fit together logically. In other words, people should be nodding and saying, “That makes sense.”
How to craft a perfect pitch
It’s not easy creating a killer, 60-second pitch. It takes time and hard work. But the following steps should help you hone your message so it’s compelling, clear and concise.
Create the story
Your very first step is to get everything about your business down on paper. Here are some tips to help you accomplish that:
- Block some time – Schedule about an hour and a half to do this. And make sure you schedule it during a time you are the most productive, whether it’s in the morning or evening.
- Turn everything off – Demand that nobody disturb you during this time. If it helps, go somewhere that people can’t find you. Turn off your phone, too.
- Silence the inner critic – Do not edit yourself when you are writing! Relax and just write. If it helps, drink a cup of coffee or two.
- Tell a story – Write as if you are telling a story to a close friend or family member…and remember that all good stories have a conflict.
- Write a lot – Do not worry about having too many words. It’s much better to edit down words than it is to add words. If you have a 1,000 word draft, don’t worry.
Once you’ve got a rough draft of your pitch, walk away. Shut down your laptop and go for a run or walk or long drive. Let it sit for awhile, preferably a day or more.
What you are doing at this stage is allowing your mind to work on the pitch subconsciously. If an idea about your pitch comes to you, write it down, but don’t return to the rough draft yet.
Work on your hook
After you’ve let the rough draft sit for a while, sit down and read through it. Start to edit it down. As you do so, start thinking about your hook.
The hook is where you are going to start your pitch. It should take up about 15 seconds, and it’s one of the most important parts of your pitch because it is going to convince the investor to listen to the remaining 45 seconds!
How do you write a good hook? A good hook starts with a great first sentence. Here are four great ways to start your hook:
- Imagine if…
- Picture this:
- What if…
- Ever wish…
And a good hook has the element of curiosity or suspense. It also is built on a promise of sorts. For example, “Imagine if we not only had a vaccination for malaria, but a cheap way to get it to everyone overnight.”
That’s a start of a really good story with a bold promise. There is also a conflict in there, namely, the idea that we could end malaria by getting people a vaccination overnight.
At this point your investor is probably wondering how you plan to pull this off. They’re intrigued, leaning in as you speak…and that’s what you want!
Explain how it will make a profit
You may have the investor’s attention at this point, but probably not his wallet. In order to get him thinking about actually investing, you have to show how your product will make money.
You need to explain the market size, and prove that the market actually can pay for your solution. In my example above, as an investor I’d be wondering who was going to pay for the vaccinations since most people who suffer from malaria live in third world countries. Could they afford this solution?
For a product like Wufoo, an online form builder, you probably won’t have any problem showing that people will want to use this product. But how is it supposed to make the investor money? In this case, it will be process of a free trial that changes to a paid subscription.
Create a sense of urgency
Your pitch wouldn’t really be complete without a sense of urgency. You need to show the investor that the clock is ticking.
How do you create a sense of urgency? One way to do that is to suggest that there is a race for a patent for your product and if you don’t act now, someone else will pounce on that patent.
Sometimes it could be the timing of the product entering the market. Maybe you need to ship by the Christmas season or before New Year’s to capitalize on purchasing habits. It could be that you need to ship before the next election.
It’s also very important to remember the smart way to creating urgency: Never use urgency to push people to invest. Use urgency to prevent people from procrastinating.
Practice your pitch
Just like any good actor who memorizes and practices his lines, you need to memorize and practice your pitch. You don’t ever want to pitch with just a handful of dress rehearsals under your belt.
Here are some ideas from the world of acting on how to practice your pitch:
- Record yourself – Then listen to your pitch. As you listen, make edits to it, tweaking the language and re-organizing sentences and paragraphs if you need to.
- Pitch to friends – You really need to be comfortable pitching in front of people, and this is one of the best ways to help you do that.
- Rehearse in front of the mirror – You may need to spend a significant amount of time alone in the bathroom before you are comfortable pitching to friends. That’s okay.
- Hire a professional – It’s a really good idea to get a professional’s advice on your pitch. But if you can’t hire one, ask someone you know to listen to your pitch. Make sure they’ve been pitched before, possibly a CEO.
Be prepared for follow up questions
You know you’ve done a good job with your pitch if investors ask follow up questions that probe deeper into your idea. Perhaps they want to know why you think the market is the size you say it is. Or maybe they’ll want to know what research you did to come up with your price point.
That kind of detail doesn’t need to be in your pitch, but you definitely need to know it in case you get asked the question. So be prepared!
Your elevator pitch is all about first impressions so it’s very important that you spend a lot of time getting it right before you share it with someone. More than likely you’ll only get one shot at impressing that investor, so make sure you are ready.