As you are developing your business concept, you'll want a clear elevator pitch (a brief verbal summary of your business) so you can confidently, concisely answer that question: what is your business all about?
Why do you need an elevator pitch this early? If you don't have an elevator pitch, you'll tend to answer the question a bit differently every time you get the question, and that will lead to confusion. Your company's identity is not something that you want people to be confused about. And creating a concise pitch forces you to think clearly about what the business opportunity really is.
If you can't describe your business concisely and in a compelling way, then you don't understand your business well enough to start designing the product, and you should keep working on the description!
You'll need "short" and "long" elevator pitches. The short version should be a sentence or two that very concisely says what your business is about.
On the other hand, if you find yourself in a 45 second elevator ride with an investor, you'll want to be able to concisely cover more than just what your product does. In his book "The Silicon Valley Way", venture capitalist Elton Sherwin describes the 7 questions that go into the 45 second business plan (and I added 2 more...) :
- What is your product?
- Who is your customer?
- Who will sell it?
- How many people will buy it?
- How much will it cost to design and build?
- What is the sales price?
- When will you break even?
- What investment do you need to take it to the next step?
- What will that investment allow you to accomplish?
Another useful elevator-pitch tool is the following template. Just fill in the information for your startup:
- For (describe the customer)
- Who (describe the unmet need the customer has)
- Our (product/service name) is (describe the product or service with no acronyms or technical jargon)
- ... that (describe the value delivered to the customer)
- Unlike other solutions, our solution (describe your unique differentiation and/or advantage)
- We make money by (describe the business model and pricing approach)
- So far we have (describe accomplishments to-date)
- We are seeking (describe the amount of money you want to raise) in order to (describe what those funds will allow you to accomplish)