While I’m sure this sometimes works, the strategy is a mistake.  A good elevator pitch can mean the difference between getting funding or not, forming a relationship with a key ally, or even closing a customer.  Frankly, you simply don’t know how valuable that person you’re talking to might be.

So how to develop a great elevator pitch?  Surprising, too, is the lack of familiarity with Geoffrey Moore. Amazingly, Moore’s Crossing the Chasm is still relevant, is still considered the “marketing bible” 18 years after its publication.  I highly recommend this book to all entrepreneurs.

[There are, of course, significant criticisms of the Chasm model.  As its name suggests, the book focuses on the "Crossing the Chasm" stage of corporate development, when businesses must transition from selling to early adopters to selling to early mainstream customers.  As Steve Blank points out, most businesses would be happy to ever achieve the level of development where the chasm was in sight.  See this earlier SANDIOS post for an introduction to Blank's customer development methodology.]

In Crossing the Chasm, Moore provides a positioning exercise, with examples, that helps produce an elevator pitch.  A powerful elevator pitch must include these components:

• Who your customer is
• Why they need your product, i.e., the pain you are solving.
• The name of your product (or web site)
• Your primary benefit to the customer, i.e., the compelling reason to buy, and
  
• Where you fit in the marketplace vis-a-vis the competition
  

It seems straightforward, but is harder than it looks.  People often confuse benefit with differentiation and want to restate the “why?” when stating the compelling reason to buy.  Here it is in Moore’s parlance:

For (target customer)
Who (statement of the need or opportunity)
The (product name) is a (product category)
That (statement of key benefit – that is, compelling reason to buy)
Unlike (primary competitive advantage)
Our product (statement of primary differentiation).

Let’s try an example:

For blog readers who like to follow embedded links in the articles they read, Que-It is a bookmarking site that provides a 2-click method of saving links to articles you haven’t seen yet.  Unlike existing social bookmarking sites designed to save articles you’ve already read, Que-It creates a simple “que” of links for users to read later.

Initially, the pitch may come out clumsy and a bit unwieldy.  Your final pitch emerges once you are able to incorporate all the components into your own manner of speech.

Give it a try and if you’re brave, put your example in comments!

[About the author: Brant Cooper is a San Diego-based marketing consultant and Customer Development practitioner. He blogs at Market By Numbers.]

Fat Startup “Method”:

1. Venture Capital funding
2. Waterfall development
3. Product/Marketing launch
4. Missed revenue targets
5. WTF?

Lean Startup Method:

1. Self-funded or friends and family
2. Minimum viable product
3. Agile development, fast fail
4. Customer development
5. Funding to scale

“Lean startup” is an pioneered by Eric Ries of Startup Lessons Learned, based on the confluence of three trends.  First, the web 2.o phenomenon whereby user generated content and low cost, opensource software allow entrepreneurs to bring “new products to market faster and cheaper.”  Second, the Engineering practice of agile development, which allows developers to quickly iterate the process of coding, deploying, and testing with live customers new features and products.   Finally, the emergence of customer development, which is a process-oriented approach to “discovering” and “validating” your customer assumptions, as articulated by Steve Blank.

While agile and customer development principles can be effective in all product endeavors, there’s a particular grace when lean startup principles are applied to online ventures.    This is because online development and online marketing are attached at the hip.  There is no other venture I can think of which can match the speed of iteration through a product lifecycle.

Imagine you have a new product idea.  In the past, you might first work on writing a 50 page business plan, with which you shop your idea to the VC community.  The likelihood of your product seeing the light of day, let alone the light of customer feedback is infinitesimally small.  Even if you were to somehow get funding, you will be held to the revenue plan, complete with the requisite hockey stick growth concocted while your product was merely a glimmer in your eye.   It’s sort of like paying for your kid’s Ivy League tuition before you’ve met your partner!

Today’s online products, on the other hand, can be shaped by your customer, in near real-time.  And not only will your customers tell you the products they want, i.e., what solves their problem, but they’ll also tell you how they buy, where they shop, who influences their decision, and how much their willing to pay.

To accomplish this feat of startup bliss, you meld customer learning with agile development to form a virtual feedback automaton:

Source: Eric Ries (http://www.slideshare.net/startuplessonslearned/20090608-the-lean-startup-tokyo-edition)

Customer feedback will not always result in answers that entrepreneurs like.  Even a highly flexible organization, adept at adapting, may not find a market worth pursuing.  These are gut-check moments.   Ultimately, it’s better to learn quickly that an idea’s time has not (yet) come, than to believe that past experience, perseverance, working harder than the competition, etc., can overcome the obstacle of no customer demand.

Lean Startup Internet Memes

Often when a concept gets traction on the Internet, a series of “Internet memes” accompanies it.  Lean Startup is no exception.  So here are some of pithy phrases you should know:

• Fail fast – while no one wants your business to fail, you do want lame features to fail and fail fast.  Fast iteration requires that you deploy code quickly and fix or kill features that aren’t used.  The same concept is used in marketing to optimizing a landing page or fix messaging.  (That being said, if your business is going to fail to do lack of customer demand, you might be better off it also failed quickly.)
• Get out of the building – Many entrepreneurs don’t want to speak directly with customers.  But that is who most likely has the answers you seek, grasshopper.  (RIP)
• Don’t sell, listen – How you interact with potential customers is as important as interacting with them.  Customer development is neither about selling or gathering feature requirements.  It’s about understanding customer pain.
• Ask why 5x – How to dig through the symptoms and find the root cause of a problem.  Useful for uncovering internal inefficiencies as well as discovering core problems customer is trying to solve.
• Triple A of metrics – Actionable, Accessible and Auditable.  Measure what matters.

There is quite a bit of information circulating right now regarding  Lean Startups.    Below is a comprehensive list of resources.  I urge you to look at Eric’s presentation and read his and Steve Blank’s blog to get you going.

Resources:

Eric Ries – blog; workshops

Steve Blank – blog; The book:  The Four Steps to the Epihpany; Online Courses via Venturehacks

Andrew Chen – great how-to blog for web 2.o businesses

Dave McClure – big metrics guy, must see famous pirate metrics presentation

Sean Ellis – customer development blog

Google Group – Lean Startup Circle – This is an active group discussing lean startup practices put to the test in their own organizations.

Follow the conversations on Twitter with: #leanstartup, #custdev

This particular event was a capital forum which involved eight startups pitching to a room full of angels, VCs, and sports industry executives. Some attendees of note included Andrew Kline, the Founder & Managing Director of Park Lane Investment Banking Services, and Tony Finn, the Founder of Liquid Force, a wakeboarding and kiteboarding brand based in Encinitas.

Two presentations of interest were the Loop’d Network and SportsForce. San Diego based Loop’d Network, a portal and social network for action sports athletes and enthusiasts, spent some time explaining their plans to expand the merchandising and eCommerce functionality of their network. Now that they have built a network of some 500,000 registered athletes and 400 sports related brands, they have decided to focus on targeted advertising and sales. It seems they are attempting to round out the $800,000 they have already raised this year through the newly involved Tech Coast Angels and other existing private investors. These new eCommerce features will go a long way in really rounding out the network to make it a complete experience for their users.

SportsForce (full disclosure: they are a web development client of my company) is a startup with offices in Solana Beach that will be offering a sports platform for high school athletes to build their athletic profile and connect with college coaches and recruiters in hopes to play at the collegiate level and possibly secure a scholarship. Born out of SportsTV, a company that produces recruiting videos and sponsors a variety of sports combines and events, this platform will host a suite of tools to add value for any athlete hoping to play at the collegiate level. Think LinkedIn for athletes. Heavy on premium and user-generated video content, look for SportsForce to make some aggressive moves in the next 12-16 months.

All eight presentations were interesting in their own right, and Connect continues to do a great job promoting the entrepreneurial spirit in San Diego.

– Hunter

When it comes to social media though, the answer isn’t as cut and dry. Yes you should have a Website, but do you need a MySpace page?  I’ve seen this come up a lot with both major multinational brands and small startups.  The question really isn’t if you should be online through social media channels, but why, how and where.

In a former life, I worked at a PR firm in NYC on a major consumer brand whose very well educated marketing director would constantly tell us “you need to build a program that makes our Website viral.”  This is around 2005 and no doubt, as “The Subservient Chicken” was garnering press from the mainstream to the ad trades, going viral was a big deal.  What Burger King with their campaign (http://www.subservientchicken.com/) was a big hit.  As many of us know, building a PR campaign designed to make an existing site “viral” and not building in elements to the site that people want to share, is easier commanded than executed.

Before going into brand surgery, we need to ask the hard questions first and get a clear diagnosis of the intended result.  As brand managers look to use for help to execute new campaigns online, it’s important that we (the we being any agency, internal manager or consultant) stress with our clients and team members what the goal is.  Obviously the easy answer is along the lines of building awareness and generating sales… but before we even begin thinking of ideas, pushing back on the how and why needs to happen first.

General Misconception: Going Online is Easy!
Yes, going online is easy.  Executing well takes quite a bit of effort though.

Last year we worked on a campaign for a major brand launching a new entertainment division.  Someone at a partner agency said that we should have a social network page, because they’re cheap and easy to put together.  I agreed with this person, but then countered “Who is going to manage it?”

Facebook fan pages don’t run themselves and without monitoring, a valuable tool could turn into a bathroom wall for disgruntled customers.  Getting back to my earlier thoughts on asking the hard questions first, when it comes to social media, unlike print or broadcast, you need to plan in advance for how you’re going to not just execute, but respond and engage as well.

Question: Why are you going online?
Let’s assume your brand or client has a website that’s interesting, but lacks interactivity such as a comment enabled blog.  Your colleagues or client may start pushing to expand your presence to places such as Twitter, Facebook or Social Vibe.  This expansion isn’t a bad idea at all, but drill down to the why before you charge forward blindly.

Are you launching a social network page to simply act as a place to promote new products or services?  Would you be looking to engage customers in a new manner?  Are you simply trying to build awareness?  Think about these questions and others before mapping out your online/social media strategy.  When you have a clear idea of the goals, it’ll be easier for all involved to focus on what’s important and how to execute.
Question:  How are you branching out?

A myriad of options exist for extending your brand’s or client’s footprint online.  If you’ve already dialed in the why, let’s ask about the how.

Executing marketing initiatives used to have a lot fewer variables.  Let’s take a print or outdoor campaign as an example.  You work with your agency or in-house team and have the creative, as well as buy, set up.  Then you execute and push forward to the next campaign.  I know I’m simplifying it, but there was a lot less interactivity with print and outdoor marketing.  When you’re building an interactive presence online, you need to decide how you’re going to manage it.

If your brand decides to develop a page on Facebook, what’s going to happen there?  Are you going to allow others to post whatever they want?  Likewise, what are you going to do with it?  Is someone interanally going to interact with those that join your page?  How often is it going to be updated and with what sort of content?  Who is going to manage this and do they need to run language through legal?  Are you going to actively pursue people online and engage them or just let people find your page on their own?

Question:  Where are you going online?
If we’ve answered the why and how, it’s time to decide where… and when.  I won’t go into the nuances of all the social media channels that are open to us (this post has been long enough already), but I will give some advice.

First, go squat.  If you haven’t already, register Facebook Fan pages, MySpace pages, Twitter accounts, etc., for your brand / clients.  Even if you don’t execute on them, squat them now before someone else does.  Of course, squatting another brand’s site is usually illegal and can be reversed in court, but do you really want to go through that and/or delay a campaign?

Second, start early.  We had a client that had said they wanted to engage on Facebook and Twitter, but then pulled back saying they didn’t want to extend the budget to make it happen.  Understood… budgets are tight, we’ll do more with less.  Unfortunately, about three months later, the client was offering a major consumer facing discount and wanted to announce it in one week via Twitter and Facebook.  We pushed back and the client said “But you said Twitter is an excellent tool for announcing promotions!”

The client was correct, we did say that.  However, we also said it’ll take time to build up a steady crew of Tweeples and fans, not to mention our presence online would have more authenticity if we’d been engaging people for the last three months prior to this promotion, instead of just announcing it one week after our Twitter and Facebook identities were setup.  If you’re not Ashton Kutcher (http://www.msnbc.msn.com/id/30263363/), it’s difficult to secure a million followers overnight.  Could we have setup the profiles, made posts, engaged and asked for re-Tweets from our Tweeples?  Sure.  But we shouldn’t have had to… marketing, online and off, should be looked at as a marathon, not a sprint.

Ok Sandios readers, that’s it for me from now.  If you’d like to discuss ideas or bounce something off the team here, just drop me a line @ info @ bbpublicrelations dot com

I’ll see you in two weeks!

-Bill Byrne
BBPR, www.bbpublicrelations.com

I recently had the great fortune of accompanying a group of investors, bloggers, and entrepreneurs on a whirl-wind tour of East Asia to meet our Japanese and Chinese counterparts, and learn what’s shaping their high tech industries.  “Geeks on a Plane” traveled to Tokyo, Beijing and Shanghai over a 10 day period, meeting with the locals and ex-pats building the Internet, Mobile & Gaming markets.

To say the least, it was an eye-opening experience.

The first day on the ground in Beijing challenged my preconceptions.   Not that cheap products and knock-offs don’t exist.  They do.   (One session we used plastic badges on which the left tab kept breaking off.  By day’s end, the floor was littered with them.)  The point is that this is neither a complete picture nor an accurate summary of China’s economy.  China is teeming with entrepreneurship, innovation and believe me, only quality product can sustain the stunning architecture of Shanghai.

The Scale

Perhaps it is the awesome scale that hinders deeper inspection:

• 350M Internet users
• 80M added in 2008
• 660M mobile phone users
• 162M users have personal blogs
• The most popular blogger gets 7K comments

Where user numbers and page hits are measured in the thousands here, they are measured in the millions in the East.

Perhaps it is that satisfied with stenography and repeating tired and trite caricatures, a lazy western mainstream media (RIP) is partly to blame.   In China, where the media is overtly controlled by the State, the Internet is already the dominant source for news and information.

Chinese companies dominate all the major Internet categories, including gaming, search, e-commerce, IM and video hosting.  This is not for a lack of trying by the worldwide market leaders.  They largely failed due to poor strategy and a lack of understanding of the local culture.   (This is not to say, however, that they can’t make a comeback.)

Copycats do exist in China, but copying success is a standard way of starting out all over the world.  Copying is in itself, not enough to build a successful business.   Innovating for the local market is key for success.  It was interesting to see before and after screen shots of Chinese Internet sites that started out looking like their US counterparts, but then evolved into their own, unique Chinese products.

The Chinese Internet market is dominated by PC gaming.  Their biggest challenge was overcoming rampant piracy in order to make money.  (BTW, Chinese Internet companies make a lot of money.) The top 6 gaming companies have a total market value of 12B and are listed on NASDAQ.  This, despite that the fact that most Chinese do not own computers.   Gaming is a social institution here, where friends play multi-user games at Internet cafes that can have upwards of 600 seats.

The State

Make no mistake, true Communism does not exist in China.  China is exercising capitalism.  Commercialism is rampant.  Consumers are barraged with the message to spend, despite the fact that income is low.  Income tax is ~45%.  The family is the safety net.

The government encourages the market and is largely absent from daily business activity.  They do, however, have influence via trade protection.  They ban, for example, gaming consoles. (Obviously, this helps promotes the local PC gaming software companies.)

While not communist, China’s Communist Party is certainly totalitarian and its threat is omnipresent.  There is only one political party and it maintains tight control over any internal threats to its existence.  While popular western Internet sites such as WordPress.com and Twitter are sometimes blocked, this has little affect on daily life and frankly the people are not so much concerned.  Internal companies who violate laws, however, can be swiftly taken down.  This threat has a greater affect on the people, resulting in self-censorship that stifles freedom and creativity.

The crime rate is astonishingly low.  I don’t know of another major city in the world where you can walk around the downtown area after midnight without fear of violence.  This is not only due to the police cameras, but to the brutal reputation of the security forces.

Driving to the airport it was astonishing to see the huge commercial billboards that spanned across the freeway, followed by a string of police monitoring cameras.  Taxis flowed in a wave, speeding toward the terminals only to slow down en masse in front of the cameras, only to speed off again.

China is a viable place to do business.  Labor is inexpensive and high quality.   Tons of university students are about to graduate without a job.  There is a thriving and energetic ex-pat community and numerous companies dedicated to helping foreigners get started in China the right way.  The people are warm, outgoing and industrious.   They are friendly, but not fawning.  This is a 6000 year old culture!  It is a culture that throughout history has been known for innovation, technological leadership and extraordinary economic activity.    The Chinese are a people seeking  closer ties to the West and actively encourage Western business activity inside of China.  They are certainly worthy of our respect.  As the GM of the Shanghai Westin put it when speaking of doing business in China (no pun intended):

We must remember we are guests here.

For more information on the trip, including presentations, please check out:

• Geeks on a Plane blog
• Presentations
• Session Video
• Photographs

Questions and comments welcome!

Scott has spent a majority of his life competing in action sports, including motocross, BMX and downhill mountain biking. His passion for sports and competition is matched only by his vision for business. In 2001, Scott co-founded SponsorHouse.com, the leading online destination for athletes to connect with sponsors, serving as its CEO. SponsorHouse has made nearly 1M sponsorship matches since its inception. Scott went on to launch Loop’d Network (www.loopd.com) in November 2007. He is a motivated, self-driven entrepreneur with a vision to revolutionize the future of sports marketing utilizing Web 2.0 technologies and Internet business. Scott has a degree in sports medicine from Elon University and a master’s degree in Internet business systems from Mercy College.