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Iron Will Behind The Iron Curtain

Faces of Wharton Entrepreneurship

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Launching into I-Space

What Do Entrepreneurs Pay For Venture Capital Affiliation?

Teaching
Workshop Workouts

A series of workshops run by the Wharton Business Plan Competition during the months leading up to the annual Venture Fair help participants and interested students broaden and hone their skills.

Jeff Bezos, chief executive of Amazon.com, leans his head back and lets loose one of his characteristic guffaws. Huuuh, huuuh, huh. More a bray than a laugh, it's a sound more suited to a barn than a classroom at the Wharton School.

Lisa Warshaw, director of the Wharton Communications Program, freezes the oversized image of his face on the projection screen at the front of the room.

"What's the appeal here?" she asks the group of students. "Certainly, he didn't go to school to get that laugh."

"He seems genuine, very much himself," one student volunteers.

"He smiled the whole time — he's personable," adds another.
Warshaw nods. "He breaks a lot of communication rules. He bobs his head a lot. He leans too far forward. But he's so charming that he can get away with it. So when you've really nailed the content of your elevator pitch, think about being charming."

About 50 students have gathered on this spring afternoon to attend Warshaw's hour-and-a-half workshop on preparing and giving elevator pitches — that is, short speeches to investors on why they should back an entrepreneur's company. Though not always given in elevators, these quick talks are often an aspiring entrepreneur's one chance at getting a venture capitalist to agree to a full-fledged meeting.

Warshaw's seminar is one of about half a dozen offered as part of the Wharton Business Plan Competition during the months leading up to the school's annual Venture Fair. The sessions are designed to help participants in the competition broaden and hone their skills. But they're open to any University of Pennsylvania student. Topics range from idea generation and writing a business plan to refining your pitch.

Today's seminar — and elevator pitches generally — aren't just for people who want to start companies, Warshaw tells the class. "It's always good to have something concise to say. If you're a manager, what do you say when your boss asks, ‘How's your division doing?' If you're an employee, it's, ‘How's your project going?' If you're looking for a job, it's, ‘Why should I hire you?'" Ideally, she says, you should be able to put your message across in 30 seconds.

What should a pitch contain, she asks. Hands shoot up, and the students start offering opinions — who you are, what your company does, why it matters, why the investor should care, who else has supported you. Several of the answers run on longer than the 30 seconds that Warshaw stipulated for an ideal pitch.

All good responses, she says — and all as wrong as they are right. "There's no formula for the content. You have to say what's right for your company. The point is to get another meeting, to get them interested."

Even so, entrepreneurs making elevator pitches can do things that will ensure that they won't be invited to an investor's office for a meeting. Among them: spewing jargon, data dumping, rambling and exaggerating. Hyperbole is especially bad, she says, because it can make you appear untrustworthy.

Also bad is barreling ahead in an attempt to cram as much as possible into a short time. "You have to pause. Think about a page of text, with no margins, no indents, no punctuation, just a solid page of text. Who'd want to read that? That's the written equivalent of talking without pausing to let your listeners catch up."

Enough don'ts. What about the dos?

Any speaker, no matter the context, should provide a frame of reference for her remarks at the beginning of her talk, whether it's an elevator pitch or a 30-minute sermon, Warshaw said. Doing that lets listeners know what you're going to cover and helps them make sense of it. The frame can be as simple as saying, "I want to tell you about the advantages of investing in Eureka Technologies." Or it can briefly lay out the points you'll cover.

But the most important part of any presentation comes even before that. In fact, it comes before you open your mouth. "It's the thinking that goes into your message," Warshaw says.

Honing the message and telling a clear, concise story is just as important in business plans as it is in elevator pitches. And that's what Jeffrey Babin, a consultant who's also a Wharton Entrepreneurial Programs Senior Fellow, tried to communicate in his business plan writing workshop for the Wharton Business Plan Competition.

If nothing else, Babin wants students to leave with an understanding that every business plan, regardless of the industry or technology, needs to accomplish three things.

• It must tell a compelling story that anyone can understand.
  
  
• It should show that a specific, large group of customers needs or wants the product or service.
  
  
• And it should make clear that the product or service can be sold for more than it costs to make or deliver. "It's buy low, sell high and make sure there are lots of people who really want to it," Babin quips.

Too often, entrepreneurs get bogged down in laying out the minutiae of their supposedly trailblazing technology and lose the reader and thus their chance to win an investment. "If a venture capitalist is really interested in funding your company, they're going to conduct technical due diligence," Babin explains. "But if you don't keep them interested, they're never going to do due diligence."

The key is communicating what distinguishes your technology from existing alternatives without, say, trying to explain the chemical processes that enabled you to create a new drug. It's like adding spices to a stew — you want to use just enough because too much can ruin it.

Babin, who sees plenty of business plans through his consultancy, Antiphony Partners, says the most common mistakes are the lack of a clear message and the failure to answer the basic questions about a proposed company's market opportunity and its competitive advantage.

Vicki Murdock, a student in Penn's Graduate School of Education, attended Babin's workshop because she hopes to turn a literacy program that she has created into a nationwide business. Called the Reading Ranger Story Hour, Murdock's program already has a mascot — the Reading Ranger — a motto: "Read a little every day." But Murdock figured she needed a business plan to persuade corporate partners to back it.

"Some people told me you don't need a business plan. Some Wharton friends said you do but you should pay us to do it. But I think if you want do something, you have to draw up a roadmap and see what it's going to look like. I needed to acquire some knowledge and figure out how to make the Reading Ranger Story Hour a business."

Babin's workshop helped her take her steps in that direction. "It was very helpful. I wish I could've spent a lot longer on it."

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Wharton Business Plan Competition

Wharton Communications Program