Saturday, December 11, 2010

The death of the elevator pitch

You've probably heard the term "elevator pitch": It's a very brief description of a product, service or business idea--no more than a few sentences, and no longer than 60 to 90 seconds. The term "elevator pitch" comes from the length of time that you have to pitch someone if you're riding the elevator together. A clear, coherent elevator pitch distills your idea down to its essence. If you can't distill your idea down to an elevator pitch, the conventional wisdom is that it's either too complex or you haven't thought it through sufficiently.

The elevator pitch idea originated in the entertainment industry, where it was called "High Concept". Producers and screenwriters had to reduce their story ideas and scripts down to a few words: "Cars that turn into giant robots!". "Spider-Man as a movie!". "Aliens invade (fill in the blank)!". High Concept has led to an endless stream of remakes, movies based on successful concepts from other media, and an almost complete absence of films with complex stories that don't rely on things that blow up.

The elevator pitch has become an overworked shortcut to critical thinking. Entrepreneurs frame their business ideas on how well they can turn them into elevator pitches, not whether they really represent a unique opportunity. By definition, a 60- to 90-second pitch can't convey a complex idea or a truly disruptive innovation. That's one reason why we get endless clones of ideas such as location-based check-in services, or personal financial services, or any number of other businesses.

As Lon Chow, a partner with Apex Venture Partners in Chicago, pointed out in an article I recently wrote on angel investors in Chicago, he sees far too many entrepreneurs who say that they're going to be the "X of Y", where X is Google, Facebook, Twitter, Salesforce.com, eBay, Groupon, or another successful business. Analogies are simple to create, present and understand, but they can be dangerous. This kind of analogy lends itself to an elevator pitch but indicates that the person making the pitch hasn't thought through their idea well enough.

Here's a practical example: Every year (and for a few years, twice a year), the DEMO Conference has featured a hand-picked list of startups. The key requirement for consideration is that this must be the first public demonstration of any product or service to be displayed at DEMO. Each company only has six minutes to present its product or service on stage. After all the pitches are made, the conference organizers and audience vote on the best presentations--these are what they call the DEMOgods. Some of the companies that have won the DEMOgod award include:
  • DoDots
  • uTOK
  • Zaplet
  • e-tractions
  • Groxis
  • Speechi
  • FourSticks
  • YackPack
  • UniPrivacy
Have you heard of any of them? Very few of the companies that didn't already have products before they came to DEMO and won DEMOgod awards are still around. You won't find any of the companies that we consider "superstars": Google, Facebook, Twitter, Salesforce.com, etc., on the list. I was there for the DEMO presentation that almost everyone refers to as legendary: The launch of the original Palm Pilot, in 1996. That was 14 years ago.

The process of developing an elevator pitch can be very helpful for honing marketing messages and cutting away unnecessary clutter, but big ideas can't, and shouldn't, be reduced to elevator pitches. In fact, if an idea can easily be reduced to an elevator pitch, if you can easily explain it in a couple of sentences, it's likely either trivial or can easily be duplicated by others.

Smart investors spend much more time examining the people in a startup than they do the elevator pitch. There's always value in a concise message, but if you haven't thoroughly thought out all of the issues behind those first 60 seconds, sooner or later your investors will figure that out. At best, the elevator pitch is a way to open the door; at worst, a bad elevator pitch can close the door before you ever get a chance to open it. If your idea doesn't lend itself to an elevator pitch, pursue the idea, not the elevator pitch.

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