In the space that I work, you often have to 'sell' your new idea to key stakeholders who will either become a champion for your idea or maybe help in funding it. The problem is that most people don't have time for a full-fledged presentation, they just need the sound bite, the core concept in order to determine if this is something worth their time and energy. This is what is called 'the elevator pitch'.
Another great use of this is that once you have your project team together, having a clear and defined 'pitch' helps to keep motivation and focus throughout the development.
This is a great post about what components need to be for a good elevator pitch. The key factor that I think often gets lost is 'what problem are you trying to solve.' Knowing this means that you understand that there is a problem, but even greater then that, you have to have a problem that people are willing to pay something to fix. It is easy to get distracted by something because it is a 'bright shiny toy' or something new and cool. But if it isn't solving a problem, then the shine is going to wear off pretty quickly.