1. Product & Service, Elevator Speech Business Plan Preparation Frank Moyes Leeds College of Business University of Colorado Boulder, Colorado

2. Product & Service, Elevator Speech Tonights Agenda Topics Topics Features & Benefits Features & Benefits Margins Margins Elevator Speech Elevator Speech Investor Presentations Investor Presentations Read BP pp 6-7 Read BP pp 6-7 Practice Elevator Speech Practice Elevator Speech In the Fire – team meetings, last hour In the Fire – team meetings, last hour Preliminary Market & Industry Analysis Results Preliminary Market & Industry Analysis Results Preliminary Interview Results Preliminary Interview Results

3. Product & Service, Elevator Speech Next Week Marketing Plan Marketing Plan Revenue Model Revenue Model Customer Surveys Customer Surveys Read BP pp 14-18 Read BP pp 14-18 In the Fire In the Fire Prelim Industry Analysis Prelim Industry Analysis Model company description Model company description Hand in Hand in 10 Call Reports 10 Call Reports Preliminary Competitive Matrix Preliminary Competitive Matrix Model company Model company

4. In the Fire Grading

6. Product & Service, Elevator Speech Business Plan Elements Executive Summary Executive Summary Company Overview Company Overview Market & Industry Analysis Market & Industry Analysis Product/Service Description Product/Service Description Marketing Plan Marketing Plan Operations Plan Operations Plan Development Plan Development Plan Management Management Competitive Advantage Competitive Advantage Financial Plan Financial Plan Funding Funding

7. Product & Service, Elevator Speech Product/Service Sections Features Features Benefits Benefits Proprietary Rights Proprietary Rights Stage of Development Stage of Development

8. Product & Service, Elevator Speech Features Detailed description Detailed description Attributes Attributes Environment Environment What is unique? What is unique? What is evidence that customers want these features? What is evidence that customers want these features? How produce & deliver – systems approach How produce & deliver – systems approach Dont assume people know or understand your product/service Dont assume people know or understand your product/service

9. Product & Service, Elevator Speech Attributes Performance: durability, quality of materials, defect levels, tolerances, construction, dependability, functional performance (acceleration, nutrition, taste), efficiency, safety, styling, packaging, etc. Performance: durability, quality of materials, defect levels, tolerances, construction, dependability, functional performance (acceleration, nutrition, taste), efficiency, safety, styling, packaging, etc. Cost: purchase price, quantity discounts, operating costs, repair costs, cost of extras or options, cost of installation, trade in allowance, likely resale value, etc. Cost: purchase price, quantity discounts, operating costs, repair costs, cost of extras or options, cost of installation, trade in allowance, likely resale value, etc. Availability: carried by local stores, credit terms, quality of service available from local dealer, delivery time, credit card, on-line transactions, etc. Availability: carried by local stores, credit terms, quality of service available from local dealer, delivery time, credit card, on-line transactions, etc. Service: hours, warrant, guarantee, return/replacement policy, upgrades, maintenance, training, installation, repair service, spare parts, customer support, tech support, training, product design, make to order, level of inventory, quotation response time, lead time, quality certification, employee capabilities, etc. Service: hours, warrant, guarantee, return/replacement policy, upgrades, maintenance, training, installation, repair service, spare parts, customer support, tech support, training, product design, make to order, level of inventory, quotation response time, lead time, quality certification, employee capabilities, etc. Environment: location, atmosphere, layout, fixtures, aesthetics, style, sound, lighting, color, etc. Environment: location, atmosphere, layout, fixtures, aesthetics, style, sound, lighting, color, etc.

10. Product & Service, Elevator Speech Benefits Describe major benefits - be specific Describe major benefits - be specific What is the evidence that benefits are understood by the market? What is the evidence that benefits are understood by the market?

11. Product & Service, Elevator Speech Benefits Emotional: ambition, power, independence, achievement, ambition, pride of ownership, comfort, love, friendship, security, style, self Improvement, etc. Emotional: ambition, power, independence, achievement, ambition, pride of ownership, comfort, love, friendship, security, style, self Improvement, etc. Social: status, image, popularity with friends or family members, reputation of brand, personal relationships, style, fashionable, etc. Social: status, image, popularity with friends or family members, reputation of brand, personal relationships, style, fashionable, etc. Health: stress, fitness, mental capacity, strength, sex life, quality of life, muse, etc. Health: stress, fitness, mental capacity, strength, sex life, quality of life, muse, etc. Financial: revenue, costs, savings, productivity, pricing, profitability, market share, save time, productivity, etc. Financial: revenue, costs, savings, productivity, pricing, profitability, market share, save time, productivity, etc. Convenience? Convenience? Objective is distinguish between benefits and features, not put into categories Objective is distinguish between benefits and features, not put into categories

12. Product & Service, Elevator Speech Feature vs. Benefits

13. Product & Service, Elevator Speech Net Dog

14. FeatureBenefit Adaptable to new network threats Protection without a reduction in user productivity Modular rules based systemAdaptable to new business requirement and new threats Guaranteed zero packet loss Eliminates the risk of false negatives Intelligent network adaptation Protection is provided regardless of the network topology Ships with a standard rule set Provides out of the box protection from common attacks Scripting language and APICustomers can develop their own powerful rules Web based reporting system Improves forensics and visibility into the security of the network Web based interfaceMakes administration of the system easy

15. Product & Service, Elevator Speech Amari

16. Features DUO Benefits Ergonomic design Eliminates back and shoulder pain so parents feel more comfortable while carrying their baby. CocoonsAllow parents to more easily attach and detach baby from harness, eliminating fear of straining arms, dropping or tightly squeezing baby. Multiple Cocoons Parents maintain a look that can be seasonally updated to provide the feeling that they are on the leading edge of fashion. Babies are happier and more comfortable in Cocoons specifically designed to fit their current developmental stage. Unexpected Attributes Convenient features allow parents to keep important items, like keys, easily accessible. This saves time and energy spent preparing to get out the door.

17. Product & Service, Elevator Speech Product & Service Conclusions Make it real Make it real Photo, rendering, specs Photo, rendering, specs Prototype Prototype Evocative description Evocative description Make it exciting Make it exciting Sell your concept Sell your concept

18. Product & Service, Elevator Speech Product/Service Competitive Matrix Product/Service offering – breadth and depth Product/Service offering – breadth and depth Quality (define the type quality) Quality (define the type quality) Detailed analysis of the key features Detailed analysis of the key features Obtain samples of the competitors products, specifications & drawings Obtain samples of the competitors products, specifications & drawings Retail go to competitors locations, observe the environment and how customers interact with the business. Retail go to competitors locations, observe the environment and how customers interact with the business. Internet businesses evaluate the websites. Internet businesses evaluate the websites. Strengths and weaknesses Strengths and weaknesses Location Location

19. Product & Service, Elevator Speech Product/Service Competitive Matrix Attribute 1 Attribute 2 Attribute 3 PriceStyleAvailability Crocs$29 One style, multiple colors Everywhere! Tevas$45+ Multiples styles, colors Athletic/comfort shoe stores Reef$20 Thongs, multiple colors Skate shops, dept stores Hoz Sandals ???

20. Product & Service, Elevator Speech Quality Dimensions I Performance - the primary operating characteristics of the product or service Performance - the primary operating characteristics of the product or service Features - the characteristics that supplement the basic functioning of the product or service Features - the characteristics that supplement the basic functioning of the product or service Reliability - probability of the product or service failing within a specified period of time Reliability - probability of the product or service failing within a specified period of time Conformance - the degree to which a product or service meets acknowledged standards Conformance - the degree to which a product or service meets acknowledged standards

21. Product & Service, Elevator Speech Quality Dimensions II Durability - a measure of product life (both technical and economic) Durability - a measure of product life (both technical and economic) Serviceability - the speed, courtesy, competence, and ease of repair or recovery Serviceability - the speed, courtesy, competence, and ease of repair or recovery Aesthetics - how a product or service looks, feels, sounds, tastes, or smells Aesthetics - how a product or service looks, feels, sounds, tastes, or smells Perceived Quality - various tangible and intangible aspects of the product from which quality is inferred Perceived Quality - various tangible and intangible aspects of the product from which quality is inferred

22. Product & Service, Elevator Speech Service Quality Dimensions Reliability - ability to perform service dependably & accurately Reliability - ability to perform service dependably & accurately Responsiveness - willingness to help customers & provide prompt service Responsiveness - willingness to help customers & provide prompt service Assurance - knowledge & courtesy of employees and ability to convey trust and confidence Assurance - knowledge & courtesy of employees and ability to convey trust and confidence Empathy - provision of caring, individualized attention to customer Empathy - provision of caring, individualized attention to customer Tangibles - appearance of physical facilities, equipment personnel and communication material Tangibles - appearance of physical facilities, equipment personnel and communication material

23. Product & Service, Elevator Speech The Elevator Pitch Based on material developed by:

24. Product & Service, Elevator Speech Elevator Pitch What is the objective? What is the objective? Who are you talking to? What motivates them? Who are you talking to? What motivates them? Must be exciting and compelling Must be exciting and compelling This is a conversation, not a speech This is a conversation, not a speech

25. Product & Service, Elevator Speech The Elevator Pitch Goal: Buy-in Goal: Buy-in Investors Investors Employees Employees Customers and partners Customers and partners Critical Attribute: Focus Critical Attribute: Focus What do you want remembered? What do you want remembered? Result: Motivate Result: Motivate Listener wants to hear more Listener wants to hear more

26. Product & Service, Elevator Speech The Elevator Pitch What market are you in? What market are you in? What urgent problem are you solving? What urgent problem are you solving? What is the size of the opportunity? What is the size of the opportunity? Value proposition Value proposition Why will you win? Why will you win? Where is the validation (customers, investors, etc.)? Where is the validation (customers, investors, etc.)? The order is flexible The order is flexible

27. Product & Service, Elevator Speech Elevator Pitch Communication Imperatives Show passion, energy, and enthusiasm Show passion, energy, and enthusiasm Use appropriate eye contact when face-to-face Use appropriate eye contact when face-to-face Slow down and speak clearly Slow down and speak clearly Be brief (target 30 seconds) Be brief (target 30 seconds) Be confident Be confident Use understandable vocabulary Use understandable vocabulary

28. Product & Service, Elevator Speech Elevator Pitch – Example P1 Diamond develops proprietary thin film diamond products and equipment that dramatically improve heat dissipation on microprocessors, solving one of the highest priority pain points in the industry. We address growing markets that will exceed $1.5B by 2006 and will become the dominant supplier with the best team having the most comprehensive patent position in the industry. Intel is our largest current investor, and we are actively engaged with other top target customers and partners who provide very strong references.

29. Product & Service, Elevator Speech How Do You Get Immediate Attention? Reduce to one sentence or question what is unusual, interesting, exciting or dramatic.

30. Product & Service, Elevator Speech Elevator Pitch Exercise Your name and the name of your firm Your name and the name of your firm Your pitch Your pitch Evaluation by class on a scale of 1 to 10 Evaluation by class on a scale of 1 to 10 Urgent pain Urgent pain Large growing market Large growing market Unique, defensible position Unique, defensible position Validation Validation Communication skills Communication skills Desire to hear more Desire to hear more

31. Product & Service, Elevator Speech Be Prepared to Answer Questions About Product and technology Product and technology Marketing strategy Marketing strategy Market research Market research Revenue and profitability Revenue and profitability Funds required Funds required Valuation Valuation

32. Product & Service, Elevator Speech Financial Dynamics Every entrepreneur must know – part of your DNA Every entrepreneur must know – part of your DNA All your decisions have a financial impact All your decisions have a financial impact Not accounting Not accounting Language of business Language of business

33. Product & Service, Elevator Speech Financial Dynamics 4 Key Elements Revenue Revenue Margins Margins Assets Assets Cash Flow Cash Flow

34. Product & Service, Elevator Speech Margins % Gross Profit Margin % Gross Profit Margin % Contribution Margin % Contribution Margin % Net Profit Margin % Net Profit Margin % Operating Expenses % Operating Expenses Revenue – COGs Revenue Revenue – Variable Costs Revenue Net Earnings Revenue Sales, General & Admin Revenue

35. Margins %