I was reading Apple’s earning report today (impressive yawn!) and the end of their press release prompted me to start thinking about elevator pitches again. So, what is an elevator pitch firstly? And secondly how do you create one?

An elevator pitch is:

• “A short summary used to quickly and simply define a product, service, or organization and its value proposition. The name “elevator pitch” reflects the idea that it should be possible to deliver the summary in the time span of an elevator ride, or approximately thirty seconds to two minutes.”

We’ve all watched those cheesy but strangely addictive infomercials (i’ll speak for you here). Well, these guys are incredible “elevator pitch” guys. Take the Shamwow master “elevator” pitch (enjoy the video if you like). He gets over the usefulness, price and what his product does in a quick compelling way – we end up believing we NEED an-ultra-absorbant-micro-fiber-cloth-made-in-Germany-that-dries-the-countertops-and-the-dog-in-under-2-seconds whether we actually do or not (i bought a set after all).

Your elevator pitch should do the same thing for your business or product without the cheesy obnoxious delivery.

Here’s how apple explain their business in a few words – the spoken elevator pitch would be more suited to verbal delivery but the content would be similar:

• “Apple designs Macs, the best personal computers in the world, along with OS X, iLife, iWork and professional software. Apple leads the digital music revolution with its iPods and iTunes online store. Apple has reinvented the mobile phone with its revolutionary iPhone and App Store, and has recently introduced iPad 2 which is defining the future of mobile media and computing devices”.

(it’s just missing a closing statement  … “and we make a crap load of money doing it”.)

Now we’ve answered “what is an elevator pitch?”, here’s a couple good tools for helping you to craft your pitch.

This video walks you through the basics of creating an elevator and works well at focusing you on what to say:

Madlibs for Pitching from Founder Showcase on Vimeo.

The second tool, from the Harvard Business Review, takes a more formal approach but is useful as well (click the image and it will run on their website):

 
 
And a something to finish with…

See how your purchasing power falls each year. You need $1.28 now to buy the same thing that cost $1 in 2,000.

Try yourself here

Demand Media executives say their websites are content-driven to attract visitors by showing up in multiword search-engine queries. The more words that are typed into a search engine, the more specific the search will be. This is called “the long tail”^[22] search. Demand Media attempts to get visitors to its websites with these long-tail searches. It then tries to retain visitors with related content and social media tools. Their social media platforms get 3 billion interactions per month for clients with already well established brands.^[23] Demand Media commissions specific website content that it then distributes to its own websites and others where they have advertising revenue sharing agreements.^[24] As of 2008 Demand Media owned 135,000 videos and 340,000 articles. It is the largest contributor to YouTube, uploading between 10,000 and 20,000 new videos per month, and gets about 1.5 million page views per day on YouTube.^[25]

Content is generated via a process in which Demand Media uses algorithms to generate titles, then posts the titles to a screened pool of free-lance writers or video creators. The list of available titles is always >100,000. Typically, writers can claim up to ten titles and then have a week to submit the articles. Format and length are dictated by guidelines. Submitted articles go to an editor (also a freelancer) who can either clean it up or request a rewrite. After writers submit a revised article it is either accepted or rejected. Payment via PayPal is twice a week.

Demand Media’s acquisition of Pluck.com in 2008 gave it the means to provide specialized content and social media platforms to any website.^[15] The content comes with advertising attached. The website owners get free content for their sites and split the advertising revenue with Demand Media. This hybrid Internet publishing model has been referred to as Curated Social Content.^[26] It is a combination of Enterprise Generated Media, such as newspapers, and consumer-generated media, such as blogs.

More: http://en.wikipedia.org/wiki/Demand_Media

Can I have some more?

I find myself frequently calling up people and asking for business help. Not only is it an incredibly good way to get advice and a new perspective but it is a great way to build a network.

For the most part people are really pleased to help, especially if i have been referred by someone they respect. Likewise, i get my share of people calling me for advice; i always try and make time to do this and be as helpful as i can. I dont claim to be the greatest expert on how to do this but being on both ends of the give-advise-get-advice conversation, i have some opinions on ground rules:

• Have a purpose – I always have some specific reasons for wanting to talk. There is nothing more annoying than someone you dont know calling and wanting to ramble on about nothing. Let’s face it, you dont know each other and non of us are in the market for new friends in the middle of the work day. Calling with a specific purpose helps me create a good tone for a conversation and lets the person being called shift gears and snap into the conversation they are having with me. Examples: “I’m having problems hiring quality sales people and i know you have built successful sales teams. How do you find good candidates”; “What’s your opinion on business plans. I’m currently raising money, do i need to write a business or will an investment deck be enough”; “What’s your opinion on hiring an good attorney, is it worth splashing out or do i keep it cheap”; and so on. If this goes well I have a good foundation for talking about the more personal stuff like wind surfing or dog-frisbee. I also like to make sure that i can succinctly describe my business and background in 3o seconds. If you need to create an elevator pitch this video is a great starting point (from Adeo Ressi @ Founder Institute).
• Set up a specific time to talk on the phone – I do not call cold, even if I have been introduced over email. The probability that I’m going to get a quality reception is small. Even if the guy answers my call, the chances are that he wont be in a good position to talk anyway (even if he says he is). He’s either just fired someone or he’s just lost his biggest customer. I like to set up some time over email – “Can we talk for 10 minutes if i call you at 10am monday 17th”. I always send a meeting request through Google as well (most the time people do accept it but its still worth it).
• Be respectful of time – If I say that I only want 10 minutes of the guys time, then I stick to it. It builds credibility and creates a good platform for future talks:  ”I said that i’ll only take 10 minutes of your time and we’ve been talking for that long now. Thanks for your help. Do you mind if i occasionally contact you if i have follow up questions”. People will always say if they want to continue.
• DO NOT ASK FOR MONEY THE FIRST TIME - There is nothing worse than the guy who says that he wants your advice and then drops the will-you-fund-me bomb. If you have to ask for money first time around; you better have an iron clad idea. In the rare case that i will be asking for money then i say this prior to the meeting. In my intro email I will say  ”I’m raising money and our mutual friend John says that you might be interested in a business like mine”. You can feel the energy drop out of the call if you spring this one unawares. Let’s face it, nobody is going to invest in someone they dont know anyway. Cultivate the relationship first and then you can ask for money. Another way is to say that you would like some advice on your investment pitch (make sure that you do want advice and you’re not just after money because trust me it’s obvious). This is a dangerous one so use it sparingly.
• Do your homework - Before I talk to someone i like to make sure that i know something about them. Their background, successes, current area of work etc. Not only is it courteous but it gives me an idea of what relevant advice i can seek. linkedIN is great for this, as is a good old Google search.

If you are not calling people for advice regularly then you should be. Every successful person i have met is an expert at this. By putting some thought into all this, you’ll avoid hanging up the phone with that cringing thought “why the f***” did i just say that”. Do not become Mikey…

This morning I visited the Center of Puppetry Arts in Atlanta with my two year old. The history of the Muppet Show was interesting (and fun).

Jim Henson’s story, as creator of the Muppets and numerous puppet characters, is captivating. Reading between the lines of how he created one of the classic and longest lasting icons of modern day entertainment, you can see a clear formula for successful.

• Need –TV commercials created an on-ramp for an old artistry to discover a new medium. It also provided a business model and a revenue platform for it to morph into an entertainment machine.
• Passion – the breeding bed for innovation. Strip it down and Henson did what he did because he loved it. This created the environment to discover, experiment and not so much ‘find’ a formula that worked – because this implies he was searching– but something found him.
• Innovation – Henson took the established puppet world and turned it on its head.  The technology vehicle of choice was TV and he used its production capabilities to deliver a total new and revolutionarily experience. Henson broke with the existing mold.
  

  Innovation through TV

• Branding – Muppets leveraged star power. By taking an old format – anonymous person pulling the strings – Henson created new way for the audience to interact with the people they knew. Puppet plus established star equaled something that would stick.
  

  A new Brand

Find what you will from this but it’s an interesting case study on how a business – and industry – grew from beginning to end and literally in front of our eyes.

I recently set up a pilot program for my company (OpenStudy) with MIT OpenCourseware (just voted one of the Top 50 Websites of 2010 by Time Magazine) and i was able to increase my ‘call-to-action’ by 18%.

In this case, my call to action was to get students interested in joining a study group when taking an MIT online lectures to sign up for OpenStudy.

Historically, our ‘sign-up’ button at OpenStudy read, “Sign Up For OpenStudy”. I wanted to see if i could increase the conversion rate of people visiting the web page to learn about the service, so i setup a simple A/B test using a service called Unbounce.com.

Test A has the word ‘Free’ on the sign up button displayed on the web page and Page B did not have the word free on the button. Everything else on the page was the same. 50% of traffic was channeled to Test A and 50% to Page B.

Button A:

Button B:

The difference in results were significant:

• Conversion rate (i.e. call to action = to sign up)  42% vs 34%.

• HAVING THE WORD ‘FREE’ IMPROVES SIGN UP BY 18%

Knowing when to change

Here’s a great example of how a business pursuing one type of business model decided that it was not working and put another in it’s place.

Stack Overflow is a programming and Q&A site that’s free. After the company’s initial success with the ‘Stack’ for programmers, they reasoned that they could duplicate the business model by allowing other people to create their own ‘Stacks’ for different topics and make money by licensing their software to the person creating the new ‘Stack‘. Wrong, the concept bombed.

Looking at their story gives an insight into their self analysis and and the reasoning they used to change things up. Granted, Stack-Overflow, did have the option of not needing to make revenue but this aside it’s interesting how they evaluated the way they were running things, recognized what was and wasn’t working and then made a decision on where they wanted to go. At a core level they didn’t change what they were all about (building Q&A communities) but they did change how they wanted enable their vision.

What i like about this example:

1. They recognized what wasn’t working  i.e. “Only people with money to burn or a business plan could create sites and those people didn’t necessarily have the ability to bring an audience”.
2. They worked out what they needed to do i.e.  “a site doesn’t get created until we have some reason to believe that it’s going to get that critical number of people showing up to make it work”.
3. They adopted a clear and well documented flow for creating new Q&A: ghost communities are killed and strong communities survive.

VIEW THE CASE STUDY BY CLICKING HERE

The blog ends by saying:

“We’re working as fast as we can! We hope to start the new process of proposing sites within four weeks.”

Well, the four weeks is up and they were true to their word:

• Go to Stack Exchange to see it in action
• Here’s an example of a user generated Q&A site called Personal Money & Finance

I want to give major props to one of our marketing interns at OpenStudy (let’s call him William – mainly because that’s his name). He’s just demonstrated the right way to suggest an idea.

He wanted to suggest that I contact a new ‘big’ company for a partnership. Here’s the email i received from him. Not only had he undertaken this on his own initiative but the suggestion was so well presented. It wasn’t “hey, i think you should contact Company X”; it was here’s company X and here’s how to get hold of them (he’d even mocked up a screen shot of what the product integration should look like).

This is the right way to make to a suggestion (especially a customer or someone up the food chain).

This is a really good read on how to put together a story about your business or idea that sells.

There’s a ton of books and advice on writing business plans which are long and windy. This offers some sound and usable advice, you can digest in 10 minutes. The advice can also be applied to more than writing a business plan; it’s good for setting up internal projects and offers a check list for you if you’re having to evaluate a ‘pitch’ from someone else.

To read click here: How to Write a Great Business Plan

Start up stories for small businesses and entrepreneurs

I came across this BBC website called Start-Up Stories there’s some good material in here. I just listened to Max Levchin, the founder of Pay-Pal, talk about how he got started:

• Destiny plays it’s role – he bumped into his business partner because he was seeking an air conditioned room to get out of the heat. Lesson: he put himself in the environment to meet people.
• Change and adapt – the initial Pay-Pal business was designed for a mobile device. It changed to a web based payment system when an eBay vendor asked for their logo so he could use it as a payment mechanism on his eBay store. Lesson: create a product and get it out, no matter how basic. Then listen to customers
• Don’t do it alone – he would never build a business without a partner. Lesson: don’t be afraid to share the pie.

{sorry, the BBC website is archaic, it wont let you embed their video in your site.}