Great elevator pitch gets salesman to ground floor

A small-business owner steps into an elevator, and lo and behold, there stands Warren Buffett - one of the most influential businessmen in the world and a guy with more money than Scrooge McDuck.

It’s the chance of a lifetime - an opportunity for this entrepreneur to present his business as the perfect investment opportunity, a potential supplier or a key partner. But how does he make that appeal, and make it intriguing and memorable, and all in the time ittakes to ride an elevator to the top floor?

That’s the challenge of the elevator pitch. Distill the essence of a business in a way it can be explained, recalled and later repeated by the listener, all in 90 seconds, sometimes less. A longtime staple of business-plan competitions at the university level, the elevator pitch also is becoming the focus for networking gatherings around the state through Innovate Arkansas’ Gone in 60 Seconds.

Carol Reeves, University of Arkansas associate vice provost for entrepreneurship, is considered a guru where company pitches are concerned. Her UA teams have won more than 20 competitions in recent years. She said elevator pitches are vital to all entrepreneurs.

“They force entrepreneurs to distill the essence of their business idea into a few sentences,” she said in an e-mail. “It is surprising how difficult this can be, and few entrepreneurs can do it well. If an entrepreneur cannot present their idea in a minute, they probably do not fully understand the idea and the potentialfor it themselves.”

Jeff Amerine, director for technology licensing at the University of Arkansas at Fayetteville, said elevator pitch lore takes the practice back to the boom days of Silicon Valley, where idea men would lurk waiting to ambush high-powered executives to sell them on their business. The goal of the pitch is to distill a business idea down to its core elements that can be explained in about 60 to 90 seconds, the time it takes to walk through a lobby and take an elevator ride.

Amerine joined the university as a technology licensing officer in 2008 after an 18-year career as an executive and builder of technology businesses. He is an adviser to Innovate Arkansas, a program of the Arkansas Economic Development Commission and Winrock International encouraging technology-based innovations and job creation in the state.

For more than 10 years, the elevator pitch has become a mainstay of many university business plan competitions, in particular the Donald W. Reynolds Governor’s Cup, Amerinesaid.

“It was so popular I said, ‘Why aren’t we doing this all of the time?’” Amerine explained.

That’s how Gone in 60 Seconds was born, and plans are under way to extend the program throughout the mid-South. The events, hosted by local business groups around the state, feature an elevator pitch contest, described as a mix between Shark Tank and American Idol. The winner gets a prize and bragging rights, but honing an elevator pitch has more long-term value for a business than a contest victory, experts say.

“It forces an entrepreneur to focus on key factors of their business,” Amerine said. And the pitch contest exposes that business to the entrepreneurial community where key contacts can be made.

“That’s where the magic happens, those creative collisions,” he said.

Eva Fast, instructor of business at John Brown University in Siloam Springs, said the elevator pitch is hard to do well. She should know; she’s trained some winners, including Agricultural Food Systems, the winner of the 2012 Governor’s Cup elevator pitch and a company selected to participate in the ARK Challenge last year.

“Our elevator pitch has played an important role in the founding, promotion and growth of Agricultural Food Systems,” said Lawson Hembree, CEO of the Springdalebased company, in a response to e-mailed questions. “An elevator pitch is essentially amovie trailer for your business: You hit the highlights of the business and reveal key parts of the plot, but structure it in such a way that audiences want to set up a time to hear the whole story.”

The elevator pitch requires a massive amount of information to be communicated in about a minute and a half, Fast said. It must contain a good balance of information but also be engaging, and by the end, the listener must be emotionally and intellectually invested in what the salesman has to say.

She noted the practice is not just for startups. Every business, new or well-established, should have an elevator pitch ready at a moment’s notice, and it shouldn’t be stale or hackneyed. As businesses grow and evolve, their pitches should shift to reflect the new capabilities, needs and goals.

Nowadays, Permjot Valia, former sales and marketing director for Ernst & Young Entrepreneurial Services in London, is a fund manager, mentor and self-confessed startup addict. He has invested in more than 25 new ventures in Canada, the United Kingdom and Africa.

He said each word in an elevator pitch must be measured and precise, and the first sentence is key, likening it to the first joke in a stand-up comedian’s set. It must hook the listener from the word go.

But, he said, a good elevator pitch does not a good business make. He said pitch contests are good exercises, but they shouldn’t be based on flash and bang alone.

“You would never give out a prize for the best book jacket. It’s understood the jacketis there to get you to read the book,” he explained.

In the same way, winning an elevator pitch without a money-making business to back it is missing the point. That’s why contests like Gone in 60 Seconds work, he said. They’re more than just contests. They exist to put business people and money people in the same room to collaborate and network.

“The pitch works when it makes us want to have a conversation,” he said.

Business, Pages 61 on 06/23/2013

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