If your grandmother get's your elevator pitch and likes it, you are ready to pitch your startup. I wish I could tell you who was the first smart guy that spouted this advice. I think it’s the best rule I know to help entrepreneurs steady their focus and hone their entire business plan and not just their pitch.
A few years ago, I attended a tech meetup event in New York and watched a lively dialog between Derek Webster, CEO of Cardflight, host, and organizer of this meetup and keynote speaker Ryder Kessler, CEO, and Founder of DipJar.
Ryder’s company has a great mission. As stated on their website, [DipJar is] “enabling cashless generosity for those who love to give.” Stated more succinctly (with tongue in cheek); DipJar is trying to Make Cash Donations in America Great Again.
So what is DipJar? As I told my then 84-year-old Aunt Esther (she is my grandmother proxy), DipJar is like the coin jar for specific charities and causes which used to sit in the kitchen or store counter. It's where we used to put in our loose change, except now the jar accepts credit cards. Wow, Esther got it and said: “that’s great; it makes sense because I don’t carry much cash anymore.” So, Ryder, you have a happy consumer waiting to use the service.
Donations from individuals to non-profits is a $240 billion industry in the United States. Ninety percent of those donations are made offline—through in-person cash giving, checks in response to annual mailers, and paper pledge cards at in-office campaigns. Yes, that is changing rapidly and accelerating due to Covid19.
The beauty and impact of a simple elevator pitch go much deeper than being able to communicate effectively to your investors, prospects, or partners. It forces you to state what is the critical problem in the world you are uniquely qualified to solve and why this matters. It has to make sense and be evident to everyone, not only to VCs and professional investors. Chances are your initial investors will be friends or family or angels that may not be experts in your specific industry.
Correctly defining the problem, means you understand who has the problem. Is this a problem for the consumer or the charity? Is it even a problem? Meaning, are you selling a "vitamin" that may make you feel better or an "aspirin" for a known pain that businesses or people will want to cure. Finally, can you fix the problem? Is your solution too complicated, unobtainable, or not likely to work?
Answering all these questions will do much more than give you a two-sentence spiel to impress friends at cocktail parties. It will force you as the founder and CEO to answer the same questions every day.
It is so easy to lose focus and stray from your mission. Smart investors will tell you that you should focus on a different problem or customer pain. Ambitious salespeople or interested potential customers will lead you to solve related problems or expand to new markets. They may be well-intentioned or even right. But chances are if your company does not yet generate enough cash flow internally to fund operations and hit specified growth targets, you are not ready.
Back to DipJar and Ryder. I was very impressed with the fact that his “keep it simple philosophy” is intrinsic to the design and use of the DipJar product. He confessed that building the hardware was not as hard as he expected. However, Ryder had grossly underestimated the “Kafkaesque” labyrinth of payment rules, banking issues, compliance, and how the byzantine world or credit card interchange tables work. Welcome to Fintech!
The secret sauce of DipJar is that they have a product that is as easy to use as it is to understand. You take it out of the box, plug it in, set the donation amount, and start letting donors dip their card. Like Stripe, Venmo, and other payment companies, DipJar insulates non-profit organizations and their customers from all the payment ecosystem complexity to make donations convenient, easy, and fun.
It always pays to stick to your core mission. Keeping it simple is hard work.