Trade Secrets

Calling all CxOs - how well do you communicate?

By Nitin Dahad

The Chilli has been a media sponsor at various partnering, angel funding and venture capital conferences over the last 12 months. These events are meant to be a showcase for up and coming companies which are either looking for investment, prospects or partnerships. But judging by the performance of some of the presenting companies and individual founders and entrepreneurs attending workshops and networking events, The Chilli's staff and analysts noticed some worrying trends among CEOs, CTOs, CIOs and CFOs (for this article we'll call them, collectively, CxOs). Increasingly, the CxOs appear to be failing in their basic task of articulating their companies' simple message. Some of these events are an ideal ground for the CxO to take the opportunity to address a captive target audience or seek out individuals who can be invaluable in assisting their companies.

Before a startup company decides to attend high profile conferences and networking events, they need to have a clearly defined objective as to what is the required outcome. Some fundamental issues will have to be resolved, before deciding to attend the events and enter the 'beauty parades'.

• Can I get in front of the right people to raise further rounds of funding (either immediate or in the future)?
• Can I engage with other executives who might be responsible for helping my company generate further revenue?
• Can I develop partnerships that might stimulate revenue growth or strengthen my company's channels to market?
• Can I find further high-calibre executives, mentors or staff at the event that would be good for the team?
• How can I use the event to build my company's profile?

If the event is attended by the top venture capital firms, angel investors, top-notch legal firms and other advisers, plus others who could be helpful to the growth of your company, then it is the ideal place to achieve some of the objectives above. So not only do you get a chance to get in front of tomorrow's investors, but you also get in front of tomorrow's customers and partners.

And that brings us to the point of this editorial: the worrying trend among CxOs. The Chilli's opinion based on many of the events our staff have attended in recent months is that very few of the company CxOs are able to provide the elevator pitch, or the 10-minute overview of their company in a way that was meaningful to the audience, which translates to potential investor or a potential customer. On top of that, in most cases it was not easy to identify the domain sector in which the company was operating.

The elevator pitch is extremely important, since it is a startup's opportunity to tell someone about the essence of the company, what it stands for and what it is looking for, in a few focused short sentences. There are many books and resources defining the elevator pitch, but it is worth highlighting some of the basics, as many CxOs appear not to have registered this yet.

Basic definition: "An elevator pitch should be short and concise, describing the domain sector, business model, company value proposition, marketing strategy, and differentiation. It should not last more than a few minutes, or the duration of an elevator ride."

The 'elevator ride' is essentially what it's all about - many business coaches explain the importance as follows. Imagine you happen to bump into Bill Gates, Craig Barrett, or some other top CEO or chairman who you'd just die for to get in front of to present your company, in a lift (or elevator as it's called in the USA). You get just 30 seconds or a minute to capture his or her attention while you are travelling in the lift with them, and so you have a limited amount of time in which to sum up what you do and what you are looking for. Your goal is to hook him or her to schedule a follow up meeting with you.

So the elevator pitch has become crucial in developing and growing a business. This is why the CxO needs to be fully conversant on the use of the elevator pitch, ready for it's use when presented with the opportunity in a chance meeting with a potential customer, partner or investor.

After the elevator pitch, comes the 'beauty parade', where you get a chance to present for few minutes, usually 10 to 15 minutes to a selected target audience. If you get the opportunity to take part in this beauty parade, you might be one of five or more companies given the opportunity to do so. It is therefore essential that you rehearse your 10-minute pitch, so as not go off page, on a tangent. Make your pitch relevant to your objective and spend the time to test this with your colleagues before the real presentation.

This is where the 10-minute presentation about your company must capture everything that's important. Just like the judges do in a beauty contest, investors look for similar vital statistics about the company they are considering investing in, plus unique selling point that will make it stand out from the crowd.

It's amazing how many CxOs fail to do this, and more importantly, are unable to identify their domain expertise clearly or articulate their funding status as a startup. The 10-minute overview must cover the following key facts about the company:

• Name of company, when it was established
• Where it is located, how many people employed
• Previous investors, if any, plus level of funding, e.g. R1, R2, etc
• Domain sector expertise and management pedigree
• The pain you are addressing within the market
• Your unique selling proposition within that domain
• Key customers and partners or potential customers and partners (if you can talk about them)
• Why are you there and what the company is looking for (eg. staff, investment, partners, customers)

So if you are a CxO and find that you are unable to give the elevator pitch or the 10-minute overview with the key facts about your company, then The Chilli's advice is - either brush up on those skills, or send someone within your company who CAN do this. It's important to recognise that an elevator pitch is not the place to explain how your software piston interacts with the algorithmic process; its objective is to communicate the business and not the mechanics of the underlying technology.

Investor conferences and events are important set pieces where people expect attendees to have some level of competence in these basic communications skills, so don't waste the opportunity by not being able to fulfil the expectations - on the part of both your company and your audience, as the wrong elevator pitch could turn off a potential partner or investor and no matter what you say or do afterwards, it will be difficult to convince them to change their minds once they've already formed an opinion from your first attempt. When the audience has a huge selection to choose from, you don't get a second bite at the cherry.

Any comments on this article? Email the editor at Editor@TheChilli.com

© Chilli Publishing Ltd 2004

09MAR2004