The Best Story Wins

date
Mar 29, 2019
slug
storytelling
status
Published
tags
Storytelling
VC
summary
type
Page

TLDR

  • The best stories show: Amusement > Curiosity > Surprise > Awe > Greed
  • Deliver emotions > Deliver facts

Why Stories Matter

Storytelling is an undervalued art in most companies, and especially in technology. The difference between good and iconic companies is how well they tell the story of how they make people's lives different.
Stories can be an incredibly powerful force, and their value is one of the core theses. Storytelling matters across all dimensions of a startup: pitching investors, recruiting talent, selling products, building a cult-like following.
When you are in a business driven by optionality, like the venture capital business, investing a lot of resources in creating spreadsheets is a waste of time since the assumptions in it are guesses. The best way to quantify the opportunity is actually with a story.
For most VCs, It’s very hard in the early, nascent, embryonic stages of a business, to really know if somebody is going to be an absolute genius or a total fraud. Because the best storytellers are also the best con men. Amazing narrative storytelling ability that captures all of the best and worst things about humanity. It captures our aspiration, our virtues, our sense of status, desire, greed, and people that can tap into that, who understand people, I think are really influential with people, are almost always predictive of great success.
A founder/builder/designer who is a great storyteller is really good for a startup business because they can recruit really well. They are telling a story where you meet with that person, and one of my partners used to call it, somewhat inappropriately, the Pampers effect. You’re like, wetting yourself, you’re like, “Oh my god, I need to join this person. I need to invest with them".
 

Don Valentine (Sequoia)

The art of storytelling is incredibly important. Learning to tell a story is critically important because that’s how the money works. The money flows as a function of the story.
Telling stories is a big part of our world. It’s a skill we try to develop in members of our team, and it’s something we look for in founders. When a founder first comes in, they know everything about their business and we know very little, so they need to be able to explain why we should partner with them. I remember we once had a guy giving a pitch who was at 20 million feet when he should have been at ground level. We just were not getting it. Eventually I suggested we take a 10-minute timeout and told him to write out what the company was on the back of a business card. He came back with a card absolutely filled with the tiniest letters you’ve ever seen, which wasn’t exactly what I had in mind—but he was then able to tell the story of his business in terms we could understand. -Don Valentine

Craft Your Pitch

Deliver Emotions > Deliver Facts

  • Treat the pitch deck as a vehicle for the delivery of emotions, not facts.
  • If you tell them a story and they buy that, they also don’t care about what product you make but what story your product tells. Because, if it tells a good enough story it is a story they can then sell to consumers.
  • Profit isn’t to be made by meeting basic survival needs, but once people have their basic survival needs met, then it can become profitable to start selling the story that this product lets you be a participant in.

Be Prepared for Any Angle

Craft a pitch, and be fully prepared, for any of the following common situations:
  • 45-Second Elevator Pitch
  • 3-Minute Competition Pitch
  • 30-Minute or 1-Hour VC Pitch
By preparing for your common pitching needs, you’ll have a library of slides and talking points that can be used in all types of situations.
Building this story, or structure, not only helps keep your pitch on time, but it can prevent the dreaded ‘pitch pause’ and keep your audience entertained at the same time.
The better this story ties everything together, the more your business will seem insightful. Ultimately we’re all human, and strong narratives that help explain the world around us are more compelling than a selection of disparate, albeit impressive, data points.
Remember, it’s a trust building exercise. In a relationship, trust is built over many interactions over a long period of time. You want to show some positive elements to get investors interested, but leave surprises in reserve.

© Allen Lee 2022