Describing what your startup does in a video is a must. However, making a high quality video is harder and more expensive than it seems. Although video equipment is cheap, finding and filming a professional talking-head is challenging and achieving consistent quality through different scenes not trivial.
Luckily there’s a quick and easy way to ensure your video is excellent without sweating it: use stop motion. Just stitch together a bunch of pictures and add narration, and you have a great looking and sounding video that will get users engaged. Another option is to do a screen capture movie, but it’s easy to fall into the complexity and boredom traps with these. I’ll focus on animated stop motion videos in this post. Here’s what you need to do:

1) Write the story of a typical user and turn it into a storyboard. For each scene, write the narration and sketch the visuals. Tell a little bit about the user’s background and focus on the main steps they take while using your site and the key benefits they get out of it. Simplify the story as much as you can and use plain language. Revise several times.

2) Find a narrator with an “exotic” accent - Australian, South African (my favorite), Jamaican, etc. Spend $30 on good microphone. Use a wind breaker (like a piece of sponge). Record the narration in a small room with lots of furniture, pillows, carpets etc. to choke the echoes. Make sure the narrator holds the microphone at the same distance from his/her mouth throughout the recording. Record several takes so you have a lot of material to pick bits and pieces from and create one consistent sound track.

3) Draw some simple pictures (or have someone draw them for you) according to your storyboard. Use abstract objects - nothing too fancy or complicated. Make sure you have a few version of each drawing to choose from. Scan the pictures and clean them up in Photoshop. It’s best to remove the background altogether to get rid of small blemishes and tone variation.
You can also take pictures of simple objects; just make sure the lighting conditions are consistent. Take all pictures at the same place, one right after the other.

4) Use good video editing program like iMovie or Vegas Pro to stitch you images together. Use fancy transitions and effects sparingly. Render your video in HD - 1280×720, around 30fps, 44k sampling rate for the soundtrack. Post the video on YouTube and embed it in your site.

Common Craft has some good ideas on how to do these videos, although they are using a video camera, which makes producing a high-quality video harder with limited time and resources.
If you are on a tight budget you can definitely do this yourself. If you can afford to pay someone like Common Craft and focus on what you’re really good at - go ahead and do it; at the end of the day, however, it might be cheaper and take less time to do it yourself. It took me 3 days to do the video below with a little help from my friends: