"Tell me your elevator story."
If you are an entrepreneur, then that’s something that you probably hear a lot. You hear it from friends, venture capitalists, and consultants like me. The problem is that it’s hard to get someone to define or describe an elevator story. My goal with this column is to give you some ideas about how to create a great elevator story.
A good elevator story has six basic characteristics:
- It's as short as necessary.
- It positions your idea and company.
- It talks about pain.
- It’s memorable.
- It uses one of the three power phrases.
- It’s used over and over again.
Let’s drill into each of these.
First of all, a good elevator story is short. That means that you need to be able to deliver it in 10 or 15 seconds. However, you need to have several different, but similar, versions of your elevator story to use on different occasions. I generally try to have 3 different versions for any idea that I am trying to sell. You use the 5-second version when you are introducing yourself to a group of people at a meeting or a round-table. The 15-second version is used in the proverbial elevator or when you meet Steve Jurvetson at a Bootcamp and he asks you what you do. Finally, the 30-second version is used when it’s just you and the other person, they have just asked “So what do you do”, and you have their undivided attention.
Second, a good elevator story starts off with your key positioning statement. This is a one-line statement that can stand on its own and sums up your idea and the pain that you are trying to solve. There are a couple of reasons to start off with a summary. First of all, you never know when you are going to get cut off or interrupted or when the other person is going to get distracted. The second reason is that you never get a second chance to make a first impression. The first words that you say about your idea will be 80% of what someone remembers. You want the other person to understand your idea and see that it is well thought out and clear. A stumbled first line can indicate a whole host of problems. Third, you need to sink the hook quickly. You have to first get the other person’s attention and interest. You can judge this by watching their eyes and seeing if they are interesting. Only after you have hooked them should you get into the details.
The third characteristic of a good elevator story is that it revolves around pain. As I said in “What a Pain In The Ass”, building your idea around pain will make your life much easier. Your idea should revolve around a pain that is being felt by a large number of people with some money or a small number of people with a ton of money. Talking about pain in your elevator story is especially important when you are talking to an angel and/or are trying to secure your first round of funding. The reason for this is that your typical angel is investing his or her own money and is less likely to make highly speculative investments. It’s their money, so they are likely to be much more choosy. They also may not be professional investors or that knowledgeable about the market that you are targeting, so the idea has to make sense to them. An idea that talks about solving a pain that is affecting a well-defined group of people is one that is more likely to make sense.
The fourth characteristic of a good elevator story is that it’s memorable. One way to think of what you are trying to do with your elevator story is to create what Richard Dawkins calls a “meme”. This is a thought or idea that is transmitted from person to person. That’s basically what you are trying to do – to infect one person with your idea and have them pass it on to people that they know. To do this, your meme must be short and easy to transmit from person to person – think about a virus like the common cold. That’s your goal. One great way to do this is to come up with a diagram that represents and positions your idea and that you can draw with both a pen and your hands.
The fifth thing to understand about a good elevator story is that it should use one of the three power phrases. These phrases, in descending order of importance, are:
- First.
- Most widely used (or best-selling).
- Top rated.
The reason that I call these the “power phrases” is that using them appropriately will generally give your idea an extra dose of legitimacy. The bottom line is that people are short of time and nobody wants to make the wrong choice. As a result, people tend to use one of two mental shortcuts to try to minimize their chance of making a bad decision. The first mental shortcut is to buy from the expert. People tend to assume that experts know more than specialists, so they will pick an expert every day. “First” makes you the expert because it labels you as the originator of the category. The second mental shortcut is to do what everyone else is doing. “Most widely used” and “top-rated” are two of the phrases that are code words for “what everyone else is doing”.
Finally, your elevator story needs to be used over and over again. That means when you meet people face to face, on your Web site, and in your press releases. I know what you are saying - "But if I do that, then I’ll sound like a broken record." That’s the point. On average, someone will have to hear your message 3 times to really get it, remember it, and be able to pass it on to other people. The harder it is for them to get and remember your idea, the less likely they are to infect other people. This isn’t to say that you shouldn’t sound fresh each time you deliver your line. That’s absolutely necessary. In fact, the hardest thing in the world is to say the same think over and over again and sound enthusiastic each time – but that’s what you need to do.
Now that you understand the basic idea, let me give you some examples of elevator stories with which I am familiar. If you take these lessons to heart, then you will find that it will be easier to raise money and sell your products.
SALESLOGIX
The first startup that I worked for was a company called SalesLogix. I worked for them for 2 years from April of 1996 to April of 1998. SalesLogix went public in May of 1999 and to date is up 400% from the IPO price. Since I joined them when they were just getting going, I was involved in the development and tweaking of their elevator story. It went something like this…
"SalesLogix makes the first true Customer Relationship Management solution that is as easy to use as Act. We sell to middle market companies that have outgrown contact managers like Act and GoldMine but who cannot afford a high-end system like Siebel. SalesLogix delivers the best of both worlds – the ease of use of a contact manager and the power, scalability, database synchronization, and reporting capabilities of a high-end system. SalesLogix makes salespeople happy by making their lives easier, it makes sales managers happy by giving them the reports that they need, and it makes I.S. people happy by using industry-standard databases like Oracle and Microsoft SQL Server.”
There are a couple of things to note about this elevator story. First, the first line of the pitch is also the core line that is used in much of SalesLogix’s advertising. Second, you can stop after delivering any of these lines and still have conveyed your message. Each line after the first just gives more and more detail. Third, when we were first developing this elevator story we found that it was best to paint a picture with our hands while we were talking. In this case, we would hold our right hand low and to the right to signify the low end of the market and hold our left hand high and to the left to signify the high end of the market. We would then bring our hands together when we used the phrase “the best of both worlds.” We found that even if people couldn’t remember the precise words that we used, they would remember our hand-waving and could communicate the “best of both worlds” point to others that they met.
HEURIS
The second startup that I was involved with makes MPEG encoders for professional video editors. Prior to my joining them, they were selling $20,000 worth of encoders each week. Six months after I convinced them to use this elevator story in everything they did, they were selling $40,000 worth of encoders each week. Their elevator story goes something like this…
"Heuris makes the most widely used professional MPEG encoder. MPEG Power Professional delivers the best of both worlds – the features and image quality of a high-end encoder and the affordability and ease of upgrading of a low-end encoder. Our customers are companies that need an MPEG encoder that produces professional quality results but that does not cost $10,000, $20,000, or $50,000 dollars. We sell to the 100,000 or so users of Avid, Media 100, and other professional non-linear video editing systems that need to occasionally produce MPEG-1 and MPEG-2 files.”
As you can see, I used a similar format to the one that we used at SalesLogix. The first line was the line that we used, on its own, to describe both the company and the product. We also used the best of both worlds concept to describe the product. Whenever we talked about the product, we would wave our hands around and paint a picture for the person.
Copyright © 2000 Chris O'Leary
