“Whenever you see a successful business, someone once made a courageous decision.” Peter F. Drucker
The answer to the question above involves two fundamental factors, clarity of purpose, and passion. Without these two factors, one usually ends up listening to convoluted stories without the vital x-factor. The answer to this question is sometimes also called an elevator pitch. This is a concise snippet about one’s business and should be enough to intrigue a potential investor. Other than for investors, it can be used for customer presentations, networking events, or any other platform to introduce your organization. Failure to get the answer to this question right, usually means you will not get the opportunity to be asked other follow up questions. It is therefore vital that the answer to this question is carefully drafted and rehearsed to perfection.
A couple of key factors need to be addressed in your answer :
1. The Problem: Correctly identify the problem area your business is attempting to target and alleviate. Having numbers and research indicating size of the problem is an added bonus and adds weight to your argument.
2. Customer Value Proposition: The next part of the pitch must cover how your product/service is going to address the problem, and what your competitive advantages are in relation to your competitors. Many CVPs are not formulated correctly, are often vague and abstract and leave potential investors or customers at a loss to understand it comprehensively. To read more about how to develop a good CVP please click here.
3. Team: If you have any outstanding team or board members who are well known and respected in your particular industry, mention them during the pitch. In the end it all comes down to execution, and having industry veterans backing you is a huge bonus.
The answer to this question should be given in less than 2 minutes, ideally. It is therefore essential to spend time perfecting the pitch and making sure that it is concise, clear and full of energy. One of the most important parts of the pitch is the opening sentence. This is usually called the “hook”, it must be cleverly drafted and be able to grab the audience’s attention instantly. Practice the delivery of this answer as much as you can, the feedback you get along the way should be incorporated into the pitch. In the end a well executed elevator pitch could help secure that venture funding you require.