The formula for the perfect Elevator Pitch involves three ingredients - the Problem, the Solution, and the Market Size.
Every great company starts by solving an important problem. The more accurately you articulate the Problem, the more valuable the Solution will be.
Think about how NetFlix.com solved the problem of having to go to the video store in order to rent a movie. No one enjoyed having to travel back and forth to the video store for a rental, nor did they appreciate paying late fees (which we all have done, and hate!)
NetFlix solved the problem of never having to visit a video store to rent a movie and never having to pay late fees again. It was a real problem that everyone could identify with (much to the chagrin of Blockbuster!)
The Elevator Pitch has three main ingredients: The Problem, The Solution and The Market Size. With only the Problem in hand, our Elevator Pitch would start like this:
"Going to the video store is a pain. People don't like traveling back and forth just to rent a movie and they hate paying late fees even more."
What's important about this explanation of the Problem is that everyone can relate to the problem. The more relate-able the problem, the more likely you are to get someone's attention to it. Think about ways to modify your “Problem” so that anyone you meet could easily understand it. It’s more important that the problem is relate-able than complicated.
Now let's find a solution.
Once you've articulated the Problem your next step is to think about how your Solution fixes that Problem beautifully.
Sticking with our NetFlix example, here’s how we might articulate our Solution:
"NetFlix provides customers with a huge selection of movies that they can order right to their doorstep and never have to pay a single late fee for."
Notice how the Solution ties directly back to the pain points of the problem, namely the fact that you don't have to leave your house and you don't have to pay late fees. A good Solution is a direct reflection of the Problem.
As a side note, a Solution with no Problem preceding it is a lot less valuable. Take a second look at the Solution for NetFlix above without the Problem before it, and think about how much less exciting that Solution is without understanding the Problem that it solves.
The Market Size
Solving the Problem beautifully is nice and all, but if the Market Size of the Problem isn't big enough, you're not likely get investors very excited.
The Market Size explains just how big and widespread the market is, which implies how big of a company you can build by solving that problem. Investors want to know you're solving a painful problem in a giant market. If you can combine those two factors, you'll generate a lot more interest.
Watch what happens when we reduce the size of NetFlix's Market Size by just adding a few words to the Problem:
"Going to the video store to rent the movie Fletch is a pain. People don't like traveling back and forth just to rent Fletch and they hate paying late fees even more."
We haven't even explained the Solution yet and already you're probably thinking "How big of a business could you build on helping people rent Fletch? I mean hey, it's a good movie, and probably a seminal work by Chevy Chase, but c'mon!"
Now let's try that again, only this time we'll use a real Market Size:
"For over 90 million Americans going to the video store is a pain. People don't like traveling back and forth just to rent a movie and they hate paying late fees even more."
Notice how with just a small modification we gave you a real good...