Elevator pitches are a key part of business, both for raising investment and winning customer approvals that 90 second explanation of your proposition can make a huge difference. The elevator pitch was coined, originally, in the USA to describe the opportunity arising from the chance encounter in an elevator (Lift for UK readers) with a senior member of an investor organisation. You have 60-90 seconds whilst the elevator is in transit to make your pitch. The recipient has nowhere to escape.

Most people make their minds up about you and your proposition in the first few seconds so you don’t have long to win their interest.

I coach people regularly in this skill and I begin the pitch development effort by laying out a basic skeleton to hang your pitch on. The advantage of this is that it initially focuses the development on the messages and not the structure. Of course there are an infinite number of ways to spend your 90 seconds but this way seems to work for those who’ve tried it.

Essentially it’s a form of key messaging, see my blog of 7^th Oct 2007 to read more on key messaging, where you extract out of your proposition the critical Key Messages that you want to get across and have retained in the mind of the receiver after you have parted ways. With only 90 seconds in total these key messages need to be sharp and to the point.

So back to my skeleton, I break the 90 seconds into 10 second blocks. The first block is 10 seconds to introduce yourself and your company. May seem like a long time to do that but remember first impressions are made in the first few seconds so get it right.

The next 6 x 10 second blocks are for your key messages. So here you need to choose the most important, exciting, valuable key messages and hone them down to a sharp 10 second statement. This ensures you don’t over state and spend too much time on one single point resulting in some key messages losing out altogether. Remember there’ll be more time later to do each key message justice if you succeed.

A single 10 second block is allocated to summarising all the 6 key messages in a high impact set of words that makes them memorable and easy to recall.

Finally the last 10 second block is the close. Too many people do a great elevator pitch but forget to ask for something or close the deal by getting agreement to move forward in some way. So you have 10 seconds, at the end of the elevator pitch, to ask for something. Maybe you want to arrange a meeting for a full presentation, a follow up call or arrange to show a demo. Whatever you do make sure you continue the engagement.

If you have done a good job the next step will come naturally but success will only come with practice.

Grev

Apologies to PCW as I’m sure they could sell Pizzas if they really put their minds to it! This point is related to the importance of choosing the right sales channel for your product based on skills and customer recognition. Two main problems with selecting the wrong sales channel, firstly the channel may not be skilled to sell your product and secondly, much worse, the customers will not recognise the channel as a supplier of products of your kind.

In order to select the right channel, initially you will need to do detailed analysis on buying practises in your targeted market and use this data to drive the development of your channel strategy. How do customers find products like yours, where do they expect to find them, how do they normally purchase these products and how ingrained are these behaviours? Getting customers to change these behaviours can be quite difficult, your sales channel strategy needs to take account of what behaviour change you need.

One sales channel strategy is a partnership with a major player in the supply chain. In one agreement you can avoid creating a new channel and also build credibility with customers by being associated with a known supplier. There will be some effort for the first channel partner to take your product, there is some risk too, so be ready for them to request some exclusivity even for a period of time.

Another mechanism is to adopt a disruptive approach. Enter the market deliberately through a unique channel to cause a breakdown in the existing pipeline and force players to change their approach. To do this you need a disruptive product or service which compels the market to take it seriously. Not all products can do this and you need to consider, carefully, which approach is feasible.

There are many past examples of channel disruptions, EasyJet with it’s internet based solution caused a behaviour change in the buying practices of travellers, Amazon caused a change in buying practices of book and music buyers, other examples being EBay, Google, and Dell.

The success of your product depends on having the best sales channel, gaining behaviour changes in the customer base is difficult unless there is a further disruption that helps your strategy succeed.

When you enter the marketplace not everyone will welcome you but adopting the right market entry strategy can make a big difference to your business.

Grev

On reading a Harvard Business Review article by Mankins & Steele in 2005 I found it very useful to study the causes for failure in strategy development and implementation. The word strategy has become an overused and misused term in modern business. We attempt to make something more important by attaching the word strategic to it whilst failing to really make things change. Having set long term goals your strategy is a plan on how you will achieve them and this strategy must lead to actions or it is doomed to fail. So in short your goal is what you want to achieve and your strategy is how you will achieve it.
The Mankins & Steele article studies the failures of strategies and a lot of these failures occur during the implementation of the strategy. These failures fall into many categories but can be summarised into;

• Inadequate resources
• Poor communications
• Poor definition of actions
• Unclear accountabilities
• Organisational culture blocking strategy
• Inadequate monitoring
• Inadequate consequences or rewards
• Poor or uncommitted leadership
• Inadequate skills

No matter how much time, effort and research you put into developing your company strategy if the organisation is not engaged or the resources are not available or you do not follow though with strong leadership, your efforts will be wasted.
So in order to be successful in implementing your new strategy you should;

• Develop resource plans, and allocate resources to implement the new strategy
• Define the required organisation structure to deliver on the strategy
• Communicate to convince the organisation to engage with the strategy
• Manage the change(s) within the organisation, avoid distractions
• Monitor, measure, feedback, assess

Make your strategy more successful by ensuring change occurs then communicate the successes resulting from those changes.
Grev

As I regularly prepare companies for investment readiness I’m asked many times what investors are looking for. This is a tricky question especially in these credit squeeze times. However many significant investment funds were financed before the current crisis and may be in a position to invest if the proposition is right.

So what is the right proposition? The situation varies with each investor, timing of their funding, the mix of their portfolio between risky and conservative, between types of technologies or industry sectors, between companies needing a great deal of management involvement and those with a strong team who are self sufficient.

If we meet the ideal investor with money to invest, a healthy portfolio and management capacity to take on another investment. He’s looking for opportunities where his investment will take the company onto a high growth path at a time where the investment risk is at its lowest.

You just have to make your proposition in terms that maximise the potential for growth and minimise the risk.

Once you have passed this hurdle then you start being judged against many criteria in order for investors to choose between the many proposals they have.

In order to simplify this I’ve conceived an analogy. “Your investment proposition is a 3 legged stool”. If you have a weak leg you risk falling on your Ass.

So I believe the three legs are;

First you must have a market or business opportunity for growth. There needs to be a big enough opportunity, measured in terms of accessible market, market share, market growth or raw business potential.

Second you need to demonstrate that you have already got or will soon build a strong team that can deliver on the potential business opportunity reducing risk.

Thirdly defend your position, in the market, with intellectual property, trade secrets, patents, copyrights, know-how, first mover advantage which prevents other competitors from entry. Reducing risk and increasing value again for the investor.

If you can demonstrate that you have three strong legs to your proposition you may get through to the next round….

Grev

I review many business plans in my high tech business mentoring roles and often I see entrepreneurs believing that if they are prudent, conservative or cautious about their business goals investors will look favourably on their propositions. They believe this caution will reflect positively on them and their business.

In many cases the opposite is true. The investor often is looking for opportunities for even greater growth and if increased funding can make the business grow even bigger or faster then they can be very interested. However you must be careful not to take on too much funding so that you cannot deploy all the funds and part with too great and equity at such and early stage. This will be a balancing act. But if your business will benefit from such increased funding then it should be considered seriously.

It falls upon the entrepreneur to fully comprehend the outer boundaries of the potential of the business, what are the key critical paths, how big could the business be, could it utilise extra funds, earlier, to gain bigger market share, get to market earlier to exploit higher prices, to develop more products or enter more markets.

Now, this still means you must be realistic, have rational analyses of various cases of funding, good project plans, resources, market forecasts etc. You must be prepared for the question, “If I doubled the money what would it do to your business?” as this can be a common question. Not knowing enough about your business prospects with increased funding will damage even a modest funding request.

In summary, think bigger, stretch your proposal, and consider carefully the scenario of greater funding, what it will do for you and what it could gain a potential investor. You might be pleasantly surprised.

Grev Commins

Tendency for High Tech entrepreneurs to stress the technology in their products can harm the success in selling the product. In some cases a weaker technical solution can win the day with better marketing.

You must assume some types of customer do not understand or even care about the technology. If you are selling to a business or an OEM this entails a different kind of sales process to selling to end customer through retail channels. You need to present the benefits of your product in terms that these customers can relate to. Relate is the key word here. In order for them to respect you and take your proposition seriously you need to build up some trust in your customer relationships.

What this means is understanding their problems, demonstrating your knowledge of their challenges and offering a solution in terms that address the problem. You do this, initially, by demonstrating your knowledge of their challenges in business, their marketplace, customers, products and finances. Using this information to build your proposition adds credibility and enables the customer to see it in the context of their business.

Giving these customers examples of new ideas for end products, a good analysis of the customer benefits, efficiency, cost savings, increased revenues or new business opportunities all add value. You need to refine these key messages and make sure you use them in the early stages of your interactions with customers. Leverage them in your verbal conversations, presentations, web presence and sales tools.

Once you have the customer interested in how they can access the benefits, then you may need to get into selling your technology at this later stage.

Greville Commins

When you start out in business, as an entrepreneur, you have to perform multiple roles. At the same time you need to be management, director and shareholder. This multi-role, maybe even multi-personality, can become ingrained in a way of working which leads to problems when the company expands and involves others in the operation of the business. Employees, managers, fellow Directors and even investors who become shareholders all complicate business life.

One of the common major problems during the growth phase of a business is the reluctance of the founder(s) to accept the eventual separation of the management team, from the board and separation of the shareholders from the day to day running of the company. The founder(s) have to mentally make a separation of the role they have as founding shareholder from the role they have in the day to day running of the business. Not all founder shareholders have the necessary skills, experience or even will power to take the company through the various stages of growth.

As purely a shareholder, anyone with an investment in a company, must want that company to be run by a qualified and experienced management team in the best interests of that shareholder.

The founder, as an employee of the company, usually wants to continue doing a role for which they are motivated to perform and have the necessary skills to execute. But often they feel a loss of control of their company if not in full management control. This makes them driven to retain control.

It needs to be explained, as early as possible, to the founders that shareholders have ultimate control of the company, they continue to own the company and are not losing it to the new management team. As a company grows it needs different skills and experience to succeed and building the best team causes roles to change. The rewards to the founders come as shareholders in the future of the company and additionally as employees of the company.

There needs to be a clear separation, in the minds of the founders, of the roles of shareholder/owner and management/board level director in the company. This is the key to successfully performing in both kinds of roles.

Greville Commins

If you are starting a small business with a new product or service which adds in to existing supply chain and you plan to sell it to some pretty large customers in an existing market you should carefully analyse the supply chain. Entering into this pipeline of companies, making up the various suppliers to that market and the major customers, is critical because it behaves like a food chain.

Analysing the food chain will tell you about the practises and behaviours of the major players, who the big players are, who the major customers are and if there are intermediate suppliers.

Large suppliers try to avoid having someone new in the way between themselves and their major customers making it hard to successfully operate in between a big supplier and a big customer. Because of this tendency to protect their customer relationships you need to have a clear strategy when entering the market.

Another factor is the risk tolerance of major customers. Some will not consider smaller, early stage, companies due to the risk this brings, the weakness in resourcing for support, future stability, continuity of supply, credibility and many others.

What operating mode should you consider when entering a new market? How can you mitigate against the incumbents behaviours ?

One approach is a partnership with a major player in the supply chain. In one agreement you can avoid being a problem for a supplier in the pipeline and also build credibility with customers by being associated with a known supplier.

Another mechanism is to adopt a disruptive approach. Enter the market deliberately to cause a breakdown in the existing pipeline and force players to change their approach. To do this you need a disruptive product or service which compels the market to take it seriously. Not all products can do this and you need to consider, carefully, which approach is feasible.

In conclusion, when you enter the marketplace not everyone will welcome you but adopting the right market entry can make a big difference.

Greville Commins

Key messaging is a technique that can be used to extract the main points of your proposition and enable you to deliver them in a presentation, speech, sales pitch, elevator pitch or marketing tool.

Often when people make speech or presentation they often forget to make all of the important points and even waste time on aspects which are of little importance.

Key messaging is the process by which you define your major benefits or features in your product pitch and invest time in making sure they are succinctly worded. The ordering of these points is also important. They must flow in a storyboard (see Storyboarding a novel approach – Aug 2007) retaining the listeners interest, connect together in a logical order bringing the listener to the right conclusion. Out of order points, repetition or poor definition only serve to weaken your case.

The first step in the key messaging process is to form a brainstorm team. This team will be set a simple question, to define the benefits of your product to a customer. The brainstorming approach will generate a large volume of data which will have a certain amount of repetition. This is normal. The make up of this team is critical, you need a selection of people that work at varying distances from the product. Too many participants that are close to the product will generate a narrow spectrum of probably well known inputs. A team of too many remote members will be difficult to summarize the broad range of inputs. A mix is more interesting.

The next step is to group all of the ideas generated into sections which have a common theme. This causes unique ideas to stand out and commonly repeated ideas to be summarized. What you end up with is a set of distinct and possibly cloudy subject areas. Each of these needs to be worked on in turn to draw out the best definition of the key message. Experiment with the wording, cross check with the brainstorm team to ensure the meaning is not lost or redefined. Weed out the weak messages and concentrate on forming a list of the best, high quality, strong messages.

With a new short list of the key messages that you have defined now you have to decide on the flow of the story around the key messages. To make good use of these messages you need to have a beginning, middle and end. They story you tell has to suit the audience, they have to follow and understand it, they must end up agreeing with your unique selling proposition and hopefully buying your product.

With this list of key messages you can use this skeleton to structure speeches, presentations and marketing tools to ensure you get the main points across.

Greville Commins

Live demonstrations to customers, or potential investors, is a vital step in any selling process. A lot can go wrong and consequences of failure can have serious repercussions that are hard to overcome.

The first rule of demonstrations is rehearse beforehand, check the demo is working, structure your demo script so that you cover the major points and don’t forget anything. It helps to story board the flow of the demo so that it makes sense, the viewer can see how each part of your explanation links with the various aspects of your demo. Make the show look slick and professional. Make it easy for the viewer to understand the whole demo first before embarking on a detailed technical explanation.

In many demonstrations, of technology products, that I’ve attended it’s been hard to get an overview first of what is on show. Often the demo is a lash up of various bits and you have to use some imagination to figure out what it would look like in real life. It shouldn’t be so hard! Make sure you either start with a nice packaged setup where it’s clear that you are showing a complete product or at least provide a big picture overview of what it would look like in real life. If it’s possible lay out the demo in a nice and tidy way it looks more convincing.

There is no problem with going to a much more detailed level after the first run through of the demo, you can lift the lids on various modules giving the user an inside view of what’s going on. But make sure you build this stage on top of a clear overview so that the viewer can keep up.

In case the customer needs more information have back up materials available, if possible, so that they can read more information on the product, flyers, datasheets, copies of block diagrams. This all adds value and credibility to the preparedness of your product proposition.

If you are not an expert in the technology make sure you have technical expertise on hand to step in, rapidly, to take the discussion to the next level or in a new direction.

If your demo is robust enough allowing the customer to play with the technology to get a better feel is important. But make sure about the robustness of your demo, serious damage can be done by the customer breaking the demo while you watch. If some portion of the demo is not functional or incomplete, be up front about it, explain and many customers will understand.

Over a series of demo runs it can help to internally formulate a collection of Frequently Asked Questions (FAQs) which can help to brief other team members who may be running the demo at some point.

Remember demonstrations are selling your product to potential customers. Poor preparation can have a serious impact on business success.

Greville Commins