Monday, January 27, 2020

8 Errors To Avoid In Your First Minute With Investors

elevator-pitchAs an aspiring entrepreneur, one of the most important things you need is a memorable “elevator pitch,” to communicate your startup value proposition and leave a great first impression on friends, investors, employees, and future customers. As a startup advisor and potential investor, I’ve heard too many that are heavy on emotion, but light on quantifiable value and impact.

In that critical first minute, no one needs to hear that you have a passionate dream of changing the world, introducing new disruptive technology, or a product with more features than competitors. What they want to hear is quantified value to them. If you find people’s eyes glazing over in the first minute of your pitch, take a hard look for any of the following errors, and fix it:

  1. Trying to paint an interesting background first. No matter how amazing your efforts and insights have been to get you to this point, the journey is irrelevant until the investor or customer understands the problem, the solution, and the potential impact on them. Save the story for a later meeting, after the context and value have been driven home.

  2. Lead with your best marketing pitch and conviction. Of course, it’s always good to speak with conviction, but marketing terms such as “improved productivity” or “lower cost” won’t make your offering memorable. Focus on quantifiable and relevant specifics, such as “reduces your cost by 40 percent,” or “increases productivity by 50 percent.”

  3. Save your best “grabber” for the ending big close. It’s better to start with a hook than to assume that people will stay with you to hear it at the end. The best hook for snagging an investor is a succinct definition of a real problem, followed by your unique solution. For example, “I have patented a new tire that will double the wear mileage at half the cost.”

  4. Describe technology and features, not competitiveness. Customers think about alternatives, and investors worry about competitors. Too much technology and too many features can scare off both. You should be highlighting your unique advantages, added value, market sensitivities, competitor limitations, and intellectual property.

  5. Highlight the solution more than the team. Customers still buy from people, and investors invest in you and your team, more than the solution. They need to know why you are the best “horse to ride” in this race, based on all unique qualifications and any previous track record. If you don’t yet have a team, it may be necessary to build one first.

  6. Tend to overstay your welcome and talk too fast. The attention span for elevator pitches is usually limited to 30 to 60 seconds, and only 150 to 250 words. Doubling or tripling the message length will only ensure a bad first impression, or at best, key elements of the message will be lost. Stay highly-focused and look for time limit cues.

  7. Forget to identify and ask for the next step. You shouldn’t expect to get an investment commitment in the elevator, or close a customer deal in the first minute. Thus your last key element of every elevator pitch must outline and request the follow-up session needed to fill in details and answer questions. Always solicit specifics for this session.

  8. Assume your words are the only necessary take-away. For reinforcement and later questions, you should always be prepared to provide physical takeaways. For investors, an executive summary of your plan is appropriate. For customers, a sample, demo device, or at least a brochure will solidify the message and your readiness to deliver.

I recommend that a good elevator pitch is not just for riding with someone in an elevator. It should be imbedded in the home page of your web site, the introduction section of your business plan, the heart of your executive summary, and the first slide of your investor pitch. You should also deliver it at the beginning of every networking opportunity, and train your team to do the same.

Don’t forget to update it based on feedback from customers and investors, and as your solution gathers momentum in the marketplace. Remember the key here is not to hide behind too many words, or assume you can stretch the ever-decreasing attention span of key people today. Check yourself by taking a few sample rides in the nearest high building to see if you can beat the elevator to the top.

Marty Zwilling

*** First published on on 01/13/2020 ***



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