Wade Armstrong

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American Inventor: Episodes 5 & 6 Recap

Posted Sunday April 16, 2006 in Entrepreneurship

Episodes five and six of American Inventor marked a bit of a departure from the series’s format, exchanging a focus on weird ideas and wacky behavior for a bit of heartstring exploitation rarely seen outside Extreme Makeover: Home Edition. We got to hear each remaining inventor’s story, always delivered in the most heart-wrenching way (“we made these plastic cookie stands for my mother because we care so much about how she sacrifices so much gives so much to our family so we don’t want her cookies to cool and stick together”). All this was part of a two-episode “elevator pitch” session.

Now, it’s not inappropriate for the inventor to talk about their story in elevator pitches. As judge Ed Evangelista said, they’re giving out $50,000 checks and they want to make sure the inventors don’t run off to Mexico with the money — for the inventors, showing their character was key to building the faith that the money would be well-invested. Nor is it inappropriate to talk about another’s tragic story in an elevator pitch; every successful product will solve a pain, and a real pain can be made obvious through a story. There was a bit of laying it on thick here, though. (“My house is in foreclosure, and I don’t even care!”)

My life has actually been just the same this week: in Business Plan class, we had our elevator pitch contest this week. The judges were two angel investors, and everyone got the opportunity to get up for 90 seconds and give their pitch. Some people did well, others not so well; I got good reviews from my classmates and from the angels as well. Before the contest, we spent a little time going into exactly what constitutes a good elevator pitch.

The concept behind an elevator pitch is simple: you find yourself in an elevator with just the person who you want to fund your company. How do you make that sale in the 60-90 seconds you have until that person gets off the elevator? Thus, the elevator pitch, a tool that must be in every entrepreneur or inventor’s bag of tricks. Typically, the elevator pitch must answer:

• Why this?
• Why now?
• Why me?

Why this? is usually answered in two ways: with some statistics and numbers about market size and need, and what’s often called a “compelling story” — a story that illustrates the typical pain that the customer feels. (“Every day, millions of people die worldwide”) Why now? is also a function of statistics, and often of culture and expectations. (“Today, more than ever, people expect science to cure their diseases and extend their lives indefinitely”). Don’t forget to mention exactly what it is you do! At this point the need has been clearly expressed, so throw in a quick one-liner that explains your business. (“My company will sell immortality pills to all citizens of the world.”) Why me? requires some proof that you’re qualified to provide the solution, usually delivered in the style of a quick line from a resume. (“I’ve won Nobel Prizes in both chemistry and biology and have built a world-class pharmaceutical laboratory.”) If you can’t do it all alone, that’s fine, show the qualifications of your partners and board members. (“Apple CEO Steve Jobs and Starbucks CEO Howard Schultz have signed on to be board members, and help with marketing.”) If you’ve already made a sale, now’s a good time to mention it. (“We have a firm commitment from Chinese Premier Hu Jintao to buy our product for every citizen of the PRC.”) Talk about how you’ll make money; be specific because numbers always impress. (“Hu has committed to buy our product at $10,000 per dose, which give us a 50% profit margin.”)

We didn’t see many of these pitches in American Inventor episodes five and six, which makes sense because the inventors had already pitched their products and were just looking to show that they were inventors who were worth a $50,000 investment. I’ve been to angel pitch sessions before and the question “who is this guy? Why should we back him, over others?” has always come up. Some people say believe in the product, others say believe in the person; we’d already seen the product, so it was time to see the person. Still, they stabbed that knife into our hearts too much this episode, I hope to see some actual product development in the coming weeks.