Elevator Pitch and Abstract

Workshop
 Agenda

• Introductions
• Elevator Pitch Presentation (11:00-11:40)
• Q&A Interaction (11:40-12:00)
• Assign Teams (12:00-12:10)
• Team Breakout and Working Lunch (12:10-1:00)
• Group Presentations and Feedback (1:00 – 2:00
PM)
• Q & A and Feedback (2:00)
 Elevator Pitch – The Basics
• Elevator Pitch – What is it?
– In the time it takes to ride an elevator from the 1st to the 10th
floor – explain the gist of your business idea to a stranger!
– An elevator pitch conveys the businesses’ key features and
rationale in a clear, concise way so that it can be
communicated easily to others
• Who is the primary audience?
– Potential investors, customers, suppliers, partners, employees
– Anyone who has or could have a stake in your business
• Why does it matter?
– Communicate – What, why, how, where and when
– Teaser to generate interest – the upfront hook!
– Share a coherent vision of the firm’s goals and high level
strategy for achieving these goals
– And, last but not least - Raise $$$!
– Plus, it might be your only shot!
 Elevator Pitch – What is it?

• Overview of the problem your business will solve

and opportunity it will address
– Why does this problem matter?
– How severe is it?
– How big is the opportunity?
– How fast is it growing?
– Why has it not been solved yet?
– Why can you solve it when others could not?
• What value is being created?
• Who are the primary beneficiaries?
– Think about who is capturing the value
– Consider that some groups may capture more than
others – these represent the ideal first customers
 Elevator Pitch – What is it?

• What are the products and services that you will

deliver to solve the problem
• How do these products and services meet the
unsolved market problem?
– Do they immediately solve the entire problem?
– Or what is the product and service “path” for getting
there?
• Who are the competitors and why are your
products and services superior?
– Focus on direct competitors
– Consider segmenting direct competitors by type
– Why, where and how does each competitor or type fall
short?
 Elevator Pitch – What is it?
• How do you plan to generate revenues
– Short term
– Longer term if there is a twist or kicker
• Hit the high points of your business model
– Profitability
– Leverage – As revenues and size increases, do gross
and/or operating margins improve?
– Scale efficiencies - how do the mechanics and economics
of your business model scale
• What are the resources required?
– Money – Capital intensity?
– Time – core development, unique product versions for
different customer types, distribution channel build, etc
– Team background and expertise – what are the critical
competencies of the team?
 Elevator Pitch – Why it matters

• Teaser to pique interest

– Punchy, crisp and clearly articulated
– Incentivizes stakeholders to care by logically presented
the case for how the business benefits them
– Delivered with confidence but not cockiness
– Should leave them wanting to hear more about the
details at a later date
• Communicate a common vision and goals
– Everyone on the same page, working toward the same
goal
– Minimize non-productive activities, speeds up time to
market
 Elevator Pitch – Why it matters

• Raise $$$
– Distilling the essence of your business idea into a few
critical points reflects well on you
– Strong elevator pitch results in more favorable
assessment of your talents by potential backers
• VCs would rather back a Grade A management team with a
Grade B product than vice versa
– Decisions to proceed forward with due diligence are
often made on the basis of the elevator pitch and the
accompanying follow up conversation by seasoned VCs
 Elevator Pitch – NU Venture Challenge
Specifics
• InNUvation Judging Criteria
– Primary: Likelihood of business success
– Secondary:
• Creativity with regards to a market opportunity and a
business concept
• Appropriateness of the business strategy
• Reasonableness of financing plans
• Audience
– Judges comprised of entrepreneurs, VCs and faculty
 Building an Elevator Pitch Step by Step

• The best way to develop an elevator pitch is to

walk through several steps to formulate cogent
answers to critical questions about your business
• Once this has been completed, you can create an
abstract that forms a template for delivering your
elevator pitch
• We call this the nine step approach to building an
elevator pitch abstract!
 Building an Elevator Pitch

• Step 1: Describe the problem you wish to solve

– What are the factors motivating you to launch the
business?
– What is the key problem or opportunity this business
will address?
– What is the overall time frame within which the business
will be launched?
– Who else is doing something similar to what you plan to
do (or are doing)?
– Has anyone already achieved a dominant position in this
market or with a similar product?
 Building an Elevator Pitch

• Step 2: Define your solution to the problem or

your approach to the opportunity
– What is the first product or service that the business will
deliver?
– When is it expected to be ready (based on reasonable
assumptions)?
• Demonstrates you have made a thorough and realistic
assessment of the business opportunity
– What are the key features of the product or service?
– How do these key features map to the market need and
problem you are solving?
– How is the product or service different/better from
currently available alternatives?
 Building an Elevator Pitch
• Step 3: Describe the anticipated benefits
– What groups or individuals will benefit most from this product
or service?
– How difficult (or easy) will it be for them to adopt this new
product or service?
• Consider the impediments for adoption from the perspective of a
customer and how they can be overcome
– How are initial users likely to benefit?
• Incremental revenue or income generation
• Cost savings or cost avoidance
• Labor savings or improved individual performance
– E.g. reduced time to complete business processes, reduced number of people
needed to complete tasks, etc
• Improved organizational performance
– Better quality
– Faster time to market
– Decreased business costs with customers, partners, suppliers
 Building an Elevator Pitch
• Step 3: Describe the anticipated benefits
– How are initial users likely to benefit?
• Improved access to relevant information and expertise
– New information created that when delivered results in better and faster decision-
making, increasing revenues and reducing costs
• Access to committed and loyal community of customers, partners
and suppliers
– Lower churn
– Increased profitability per customer or per channel partner
• Positive externalities - increased benefits to society
– Lower unemployment
– Improved student scores
– Improved quality of life
– When will measurable benefits be delivered?
• Payback period
– How much will stakeholders be willing to pay to receive these
benefits and why?
– How easy will it be to demonstrate potential benefits?
 Building an Elevator Pitch
• Step 4: Describe the implementation plan
– What are the key activities the team must undertake?
– What are the key decisions the team must make to
launch the business?
– Which activities should be done internally and which
should come from outside suppliers and partners?
– What relationships should we have with key partners and
suppliers?
– What are the major deliverables and when will they be
delivered?
– What is the timing on when each major deliverable will
be available to relevant stakeholders?
– Who are the key people responsible and what are their
special skills and expertise?
– How difficult/costly will it be to attract and build out the
team with this set of skills?
 Building an Elevator Pitch

• Step 5: What resources are required?

– What does it cost to launch the business?
• Think about major milestones…
– Cost to develop the first product?
– Cost to launch and market the first product?
– Cost to sell the product?
– Profitability of a customer over its entire lifetime
• Sources of funding (in diminishing order of preference)
– Cash flow from business operations
– Debt
– Equity
• Timing of sources of funding
– Only raise what you need to minimize your ownership dilution since
more money earlier on means VCs take more of the company…
– Should be based on achieving successive milestones
 Building an Elevator Pitch
• Step 6: Describe the anticipated benefits for
investors, partners and employees
– What is the estimated size of the market opportunity?
• Top down method (e.g. starting with number of people in
the US, etc)
• Bottoms up method (based on revenues of firms in existing
or closely analogous market
• What share of the market can you capture in the short,
medium and long terms?
• Value of Intellectual Property (IP), including patents,
licenses, copyrights, trademarks
• What is the anticipated terminal value of the business
based on steady state margins, growth and market
penetration?
• When do you anticipate turning a profit and returning value
to the investors?
 Building an Elevator Pitch
• Step 7: Do you and the management team have
the support required to ensure success?
– Who are the key supporters for this business?
– Why are they supporting it?
– What type of support do they provide?
– How will you market this project to internal and external
stakeholders?
– What opposition may stand in the way and how do you
propose to overcome it?
• Think about who would be hurt most by this business
– Through disintermediation, obsolescence, etc.
 Building an Elevator Pitch
• Step 8: What are the risks and how will they be
managed?
– Pricing risks – could customers be willing or able to pay
less than you expected?
– Market risks
• Why would the market be slower to grow than expected?
• Why would your market share fall short or take longer to
achieve than you expected?
– Competitive risks
• Are there any other big companies that could enter the
market
• How could your competitive advantages erode?
– Execution risks – what about your operations are
difficult to get right and could fail?
– Government and regulatory risks – could government
intervention negatively impact your business?
 Building an Elevator Pitch
• Stoogle – a vertical search engine optimized for student
needs
• Step 1: Describe the problem you wish to solve
– Current horizontal search engines like Google do not
deliver adequate search results for university and
graduate students conducing research
– What are the factors motivating you to launch the business?
Horizontal search engines have made academic research
easier but is still far from optimal
– What is the key problem or opportunity this business will
address? Improve by an order of magnitude academic
research search results
– What is the overall time frame within which the business will
be launched? Deliver first prototype within 3 months
– Who else is doing something similar to what you plan to do (or
are doing)? Google, Facebook, small startup vertical
search engines
– Has anyone already achieved a dominant position in this
market or with a similar product? No, the market is nascent
 Building an Elevator Pitch Abstract
• Use the template below as a framework to help
nail down the elevator pitch abstract!
• Abstract Template: Our business {Name} will deliver {list key
deliverables} to {list key beneficiaries} to enable them to {list key
benefits}. The business is led by {list founder and key executives,
investors and advisors} that have {list key backgrounds and
qualifications}. The business {will launch/was launched} on {date} and
we {will begin/began} delivering {first product or service} on {date} and
anticipate that the terminal value of the business will be {list anticipated
value}, which represents a {list return} to investors. The total cost to
achieve this goal will be {total cost}, which includes the following key cost
categories {list}. The key risks for the project are {list risks}. These risks
will be managed by {list key approaches to managing each risk}. We
anticipate raising capital from {list investor categories – friends and family,
angel investors, VCs, grants}
 Stoogle Elevator Pitch Abstract
• Stoogle Abstract
– Our business Stoogle will deliver a revolutionary new search engine
optimized to deliver superior search results for academic researchers
who need to increase research productivity, time to market and
quality. The business is led by CEO Michael Marasco and an executive
team that has more than 100 years of cumulative web surfing/search
engine usage. The business will launch on six months from funding
and anticipate that the terminal value of the business will be $1bn,
which should generate a 100x cash on cash return to investors. The
total cost to achieve this goal will be $10 million, which includes the
following key cost categories filling out the management team, hiring
an offshore development team, building a sales force, marketing and
business development teams, a tiered distribution channel and a US-
based infrastructure. The key risks for the project are horizontal
search competitors like Google going vertical, development execution
missteps. These risks will be managed by a high quality management
team and partnering with complementary offline and online partners to
build awareness and cost effectively build traffic. We anticipate raising
capital from tier I VCs like Heiner Ferkins and complementary partners
like Amazon and Yahoo! as well as Mom and Dad.
 NU Venture Challenge Timeline

Feb. 28 Sign-up deadline

First Round deadline; business plan abstracts due

Apr. 13

Apr. 16 Semi-finalists announced

Semi-final Round - teams present 3-minute elevator pitch +

Apr. 21 7 minutes Q&A and finalists announced at end of day

May 12 Final Round consisting of finalist teams giving a 15 minute

presentation + 15 minutes of Q&A & Gala
 NU Venture Challenge Timeline

• Disclaimer
– This presentation is based on HBS Note 9-802-
222 “Developing an Elevator Pitch for a New
Venture” by Lynda M. Applegate and Susan
Saltrick