Diane M. Sullivan (2008)

1. The “Art” of the Elevator Pitch Diane M. Sullivan (2008)

2. What is an Elevator Pitch Anyway? A short, simple description of your business idea that anyone could understand by the time you ride up three floors in a typical elevator.

3. Very Important Point • An elevator pitch is not a sales pitch • You are NOT pitching a great idea, team or product (especially in an elevator!!) • You ARE pitching what your business will do for customers, investors, and/or society • SO, pitch how your business will solve a tangible problem or address a burning need that exists TODAY!!

4. Example • WRONG: • We are the smartest telecom guys in the world and we are 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 phones anywhere inside every building in all major U.S. metropolitan areas

5. Elevator Pitch “Must Haves” and Caution Interesting opening: opening much immediately piques 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, and sometimes only time for a few sentences Caution: Do not take too long to get to the pain/problem that you are solving—you could lose the catcher’s attention

6. 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

7. The Hook • The hook should simply identify the “pain” you address • We make Napster legal • 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 are also effective closers to the pitch) • GE brings good things to light • NY Times – “All the news that is fit to print” • UCF Venture Lab – “Where education is a venture”

8. The Product/Service Pitch • Guidelines to keep in mind when developing the product pitch: • KISS – Keep It Simple, Stupid • Kill the geek speak (e.g., limit technical talk) • Focus on customer benefits, not technical benefits

9. KISS of the Devil: Too Much Information • WRONG: Our technology is the first integrated and automatic book scanner that will scan and digitize bound documents at a speed of 1,200 PPM at a fraction of the cost of existing solutions based on a disruptive digital imaging technology initially developed at Bell Labs and protected by 12 patents. • BETTER: We capture the future of knowledge by seamlessly digitizing physical libraries at a very low cost.

10. Geek Speak Is Boring… • WRONG: We provide non-penetrable intrusion detection for digital voice, fax and wireless communication devices with our 2048-bit Hellman encryption algorithm that is combined with the latest 168-bit Hellman DES. • BETTER: We allow you to communicate safely on a broad range of digital devices.

11. Customer Benefits, Not Technical Benefits • Seamless integration • Scalable, adaptable • Secure networking • Improves network performance SO WHAT??? Technical Benefits Business Benefits • Increase your revenues • Increase your efficiency • Reduces your risk • Cut your costs by 30%

12. The Market Pitch – Tie to a Burning Need!! • 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 your product (or that has expressed interest) • The FAA has determined that we are the only security system that is able to rapidly move people through security check points while exceeding their security needs • If you cannot reference an existing customer, quantify your market size with numbers that are from a reputable 3rd party source • According to the American Hospital Association, there are 4,000 hospitals in the U.S. that need the ability to visualize MRI images in 3D

13. Know Thy Competition & Acknowledge It Microsoft You

14. Briefly Acknowledge Your Competition • Identify a couple of your competitors as well as what they provide • There are many vendors that provide internal wireless networks like Linksys and Cisco. • While no other firms offer a service package as comprehensive as ours, companies like PetSmart and Club K9 Doggie Daycare do offer some pet daycare and grooming options.

15. Neutralize Your Competition • Pitch 1-2 unique differentiators that describe your advantage • We use the same insulin compound provided in Merck’s 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 is able 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 by world-class trainers.

16. So, How Will You Make Money? • Describe your firm’s revenue model (e.g., how your firm earns its money) • We will install the wireless network in a building at no charge, and then charge a usage fee for all calls that we carry • We provide free access to our medical information website for consumers, and charge advertisers for each exposure • Our portable fuel cells will be installed in laptops, and we will receive a royalty from Dell for each installation • We will distribute and sell our products through big box retailers as well as directly through our online store • For grooming, customers will pay for the services rendered and for pet training and daycare, customers will have the option of different service-level packages.

17. Why Invest in You?(Optional – depends on time constraints & uniqueness of firm) • Fact: investors invest in people, not products • Describe your new venture team’s unique qualifications • Our founders have over 20 years of combined experience in the telecom industry. • Our board includes two top executives in the restaurant franchise industry. • Our technical staff has a combined portfolio of over 30 medical device patents. • We just recruited Ringo Starr to run our sales team. You may recall that Ringo took Google from $3 million to $100 million in sales in two years. • Our founder, Jessica Simpson comes from a family with nearly over 30 years of experience in this industry, providing our firm with connections to many of the industry’s key players.

18. Investment Required & Payback Estimate(Optional – depends on to whom you are pitching the firm – appropriate for investor pitch) • Describe the investment required at this stage of the business planning process • Describe for what purpose(s) that money will be used • Describe how, when, and with what rate of return you expect to payback investors • We are seeking $500,000 in initial start-up capital to fund prototype refinement, initiate initial marketing efforts, and website development. Based on our sales estimates, we plan to pay investors back 30% in year one at 20% ROI and 70% in year two at 30% ROI. • We are seeking a $1,500,000 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. 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 our company 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. Who would 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 on your technical questions. • Could I have your card? I would really value your feedback and expertise as we continue to develop our business model.

20. Elevator Pitch: An ExampleNote: This pitch includes the components that should be included for the MGT320 class assignment • 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 work anywhere inside all types buildings, while ensuring your communications are secure. • Market: The FCC has determined that over 60% of the 5 million commercial buildings in the U.S. inhibit wireless or cell phone communications from within. The percentage is even higher in international markets, suggesting a huge need to 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 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. Elevator Pitch: An ExampleNote: This pitch type would be appropriate for an investor • 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 work anywhere inside all types buildings, while ensuring your communications are secure. • Market: The FCC has determined that over 60% of the 5 million commercial buildings in the U.S. inhibit wireless or cell phone communications from within. The percentage is even higher in international markets, suggesting a huge need to 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 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 • Why You? Our founders have over 25 years of design experience in communications systems, and Bob Marriott has recently agreed to join our Board of Directors. • Investment Required and Payback Estimate: We are seeking a $1,500,000 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. • 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?

22. Questions? Some sections modified from Chadwick (2006)