Why you need a great (and flexible) Elevator Pitch

June 7, 2010 Leave a comment

You can tell a lot from an entrepreneur’s elevator pitch. Is it clear and simple? Are you able to understand what the company is doing and why they will be successful? Often, the 30 seconds elevator pitch becomes the 2 minute explanation of what your doing; too many times leaving the other person clueless about what you business is really about. Another problem is to deliver a pitch that is way too technical; making it understandable only to a few people. Here are my ground rules in making a great elevator pitch:

What is the market you are serving?
It is important for your pitch to identify what is your target audience. This can be industry specific (entertainment, automotive design, architects) or a specific segment (fortune 500 companies, retail, manufacturing, transportation). This market definition needs to correspond to something that others are used to hear about. Any new definition you cleverly invented between four walls will just require that extra time to be explained.

What is the market problem you are addressing?
You also need to identify the problem(s) you are looking to resolve. Are you customers looking to improve efficiency or improve their top line? Or they have a challenge in doing a specific task such as managing their inventory or production process? No matter what it is, you need to provide a simple and clear example of the pain that your customers have. You also need to make sure that this is indeed a problem that is well documented. Solving something that nobody is thinking about is a bad sign. Expect also this person receiving your pitch to go and validate next time they have an opportunity to talk to someone in your market served (“I talked to a few people in industry X and they were not convinced this was really a problem to be solved”).

How are you solving this problem?
Next is to provide the details on how you are solving this problem. How are you making your customers more efficient? How is your solution making their lives better? It is also crucial to make sure that you provide an explanation that defines your uniqueness, your competitive advantage: “unlike the other players in our market, our solution allows to …”. If there are no key points that support your competitive differentiation, it will be very hard to your audience to take away your message. Find the right words that does not make your pitch like a “me too”.

What are you looking for?
Perhaps you were curious about the flexible component of my title. This is where it comes in, as I always like to see an elevator pitch that has a flexible ending. Are you talking to a potential customer, partner, investor or analyst? Having a flexible ending allows you to tailor your pitch based on what you are trying to get out of this specific individual. Of course, if you are talking to wide audience, you can’t do this but you still need to adjust based on event (startup meeting, analyst event, trade show).

A good pitch often means a good business
Of course having a great pitch does not mean you will be successful but it sure does help to carry the message. By developing and delivering a clear and well-communicated elevator pitch, you are allowing others to be able to easily repeat your message when they have a chance. Don’t rely on the others ability to extract your message out of a messy pile of useless data and explanations; you most likely be misrepresented going forward. This elevator pitch is not only important for the executive team but for every employee in the company – communication being such a difficult thing.

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Knowing your weaknesses does not mean you need to fix them

November 25, 2009 Leave a comment

When doing any business plan or yearly review, we look at our strength, weaknesses, opportunities and threats (SWOT). Looking at our weaknesses, we often think about fixing them. But is this the right thing to do?

Good vs. Bad

All weaknesses are not built equal. Of course there are some that need to be fixed in order to run the business. For example if you don’t have a sales channel and this prevents you from growing the business, then you need to find a solution. But sometimes you have weaknesses that don’t really hurt the business (at least materially); for example a so-so customer support center. It could be better but you still manage and the business is successful.

When is it time to fix a weakness?

In order to answer this, I have two simple questions I ask myself:

  • Can we continue to grow and be successful even with this weakness?
  • Will fixing this weakness divert my attention from some of my strengths?

If the answer to these questions is YES, then I don’t look into fixing that weakness. If you still are determined to fix your weaknesses, you might create one of the biggest mistake in leveling all your strengths and weaknesses; losing at the same time any competitive differentiation you might have had.

Making your strength even stronger

One way to compensate for on-going weaknesses is to make your strength even stronger. Most of the time, it is easier to improve on what’s good than to fix things that don’t work. Having said that, I must admit that even myself struggle with this as I have a tendency to not only improves things but to fix the weaknesses. It’s a natural reaction but you need to pick your battles, to stay focused on what works.

Building the top 3

Another trick I have is to list all the key challenges that the company has. Priority is determined by the impact that this challenge has on your business as well as how much this problems troubles you (what keeps you awake at night). Of course, you need to make sure you are focusing on the right problems but if you do this exercise well, you will see how far (or how important) a given weakness needs to be fixed. If it’s not even remotely close to your top 3, then don’t even spend an additional minute on it …

In short, get stronger where you can, only fix the weaknesses that matter and yes, stay FOCUSED.

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Why do you need a Business Case?

September 2, 2009 3 Comments

Having a hard time understanding why some VCs don’t believe in your business plan? And this after you’ve done all the analysis: “<Insert favorite analyst> predicts that the market will be 1B$ by 2012”, “if we only get 1% of the market, we will be rich”, “no one has ever thought of doing such product – we have no competitors”.

We are great in developing technologies and having fantastic ideas – but do we have a business case for this product idea? Do we really need a business case? Contrary to what you might think, you need a lot more the business case for your own good than to just to please a potential investor. The better the case, the better your chances of actually being successful.

So let’s look at what goes in a business case. I like to breakdown a business into 5 categories:

  • Market Analysis: Market Segments, Buyer Personas, Market Problems, Reason to Buy/Barriers to Purchase, Current Solutions, Complements and Conflicts with Existing Company Products, Our Current Position, Competitive Landscape
  • Product Concept: Positioning, Compelling Advantage
  • Business Justification: Business Objectives, Forecasted Revenue, Cost Estimates, Profit Analysis, Pricing, Installed Base Opportunity and Impact
  • Product Feasibility: Technology Assessment, “Buy, Build, or Partner”, Development Feasibility, Services Feasibility
  • Risks: Mitigation Strategy

The challenge in building a business case is that you cannot cram this over a few weekends; this takes time and requires more effort that just compiling a few spreadsheets together. The actual first step is to have a Product Manager that can actually drive this process forward. A great place to start is to follow the best practices of Pragmatic Marketing. I actually believe that any Product Management, Marketing as well as the Development leads should follow the Practical Product Management and Effective Product Marketing courses

The better you do your job at building your business case, the better your overall business plan will be and will achieve credibility with your Board and Investors. So if you are planning any round of funding in the next 12 months, you better start this process now …

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Market focus and developing a competitive advantage

July 29, 2009 Leave a comment

How many time do we hear lately that the economy is making it hard to succeed? Yet, people are still spending on products and services that are needed in order to run their business. If a product is addressing a market need and is a superior offering than the competitors, people will buy it. Often, lacklustre sales performances can be linked to either excessive optimism or lack of clarity about the true value of your offering. As a CEO, you have to be careful in not just shooting the messenger (let’s blame sales and marketing for not being able to sell products) and be certain that you’ve done your homework as far as designing and delivering the right product or solution for your prospective customers.

What is your target market? Yes you can sell in multiple segments (a.k.a the fear of being niched) and you are convinced that they are all close enough from the core. Even more, you might believe that it’s not that expensive (or even worse cost-effective) to hit multiple markets at once. But if you are not capable of ultimately own a market segment, having 1% of several markets won’t cut it – this means that someone else or multiple companies share the other 99%. When was the last time that a company made a press release announcing that now they own 1% – it would look foolish but yet I see lot’s of people making this silly calculation on big target markets. Stay focused on markets that you can win and grow from.  Focus is key – understanding how you can own a smaller market will allow you to focus instead aiming large and not having a clear idea on how to win the war against your competitors. Any investor wants you to lead a market not to be the smallest player with 1% market share. If your latest customer wins are all unique and you can’t find any patterns regarding their buying personas, you have a target market problem.

So what makes you win deals ? A competitive advantage is what you have or do that your competitors won’t or cannot do. A competitive advantage is only valuable as your target customer base believes it’s valuable.  If cost is not an issue, low price won’t do you any good. If your customers want to keep their content behind the firewall, being the first one to offer a solution in an un-trusted cloud won’t work either. Would you use figure skating skates when playing hockey? That would obviously not be a competitive advantage … In order to win the war, you need to make sure you have the right competitive advantage. You will be as powerful as your solution is truly needed by customers; and feared by your competitors. Product validation can be done with potential customers which will help you identify the primary customer needs. If you don’t see a pattern on why your customers select your solution, or it’s not linked to your competitive advantage – you are in trouble.  You just don’t know it yet …

The elevator pitch is a great test when if comes to market focus and presenting a clear competitive advantage.  Yes entrepreneurs hate it when people ask them about their elevator pitch, 30 seconds is not enough to explain the amazing idea that they have. But, if it’s not easy to quickly and simply describe what you do and how you differentiate yourself – you’re in trouble. It’s impossible for people to spread your message if you need your CTO or VP Products to explain the value of your offering … Any business manager need to be able to quickly understand what you do, why it’s valuable and why you will win the war. If people don’t understand what you do (“this guy just does not get it, he just does not see the value”), it’s not their problem but it will become yours as you try to succeed and grow the business beyond a few anecdotal deals …

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