As the founder of a startup company, 90% of your work is storytelling.
You are constantly telling the story of your company: when fundraising, recruiting co-founders or employees, marketing to users, rallying the team, talking to the media, and communicating with the board. All of these people are begging to hear a good story, a story that can inspire and motivate them to take action.
But most of us have never learned how to tell a good story! This is the highest leverage skill that founders can cultivate and it can improve every aspect of your work.
Selling = Storytelling#
The most obvious stage for storytelling is during fundraising. Given your conviction in your company and why it should exist, your job during fundraising is to succinctly tell investors the compelling story of your startup and why it is a bet worth paying attention to.
We don't need to reinvent the wheel here! The art of storytelling has been around for a long time and we can shamelessly borrow from that knowledge to tell better stories. In fact, we can use the storytelling formula of one of the best storytellers in the world: Pixar.
The Pixar Storytelling Method#
Pixar has been one of the most successful studios in the film industry, with box office revenues exceeding $14 billion and winning 23 Academy Awards.
How does a studio have so many hits? Pixar is famous for its rigorous and structured storytelling process, and at the heart of every Pixar film is a tightly sequenced and calculated story that consistently tugs at heartstrings around the world.
Emma Coates from Pixar released a set of story guidelines, including a Story Spine (shown in the image above). This simple structure quickly conveys all the important parts of a story: the initial conditions, the inciting incident, the resulting tension, and the protagonist's journey.
Applying the Pixar Formula to Your Startup#
You can use the same structure to describe the most important points about your company using short and digestible words. Here's how the Story Spine maps to the basic components of a startup pitch:
1. "Once upon a time" => The Problem#
These are the initial conditions of the world, whether your company exists or not. Who are the people (your customers) that you are helping? What specific jobs do they need to get done?
You can also mention the trends happening in the world that set the backdrop for your company. What economic forces, social behaviors, or technological advancements do you notice that are relevant to how this problem is being solved? What wave are you riding?
Provide powerful insights here! Investors hear thousands of pitches from hundreds of domains. Your understanding of your space should be at least 10x theirs, and the best pitches point out problems that investors may not even be aware of, due to your unique background or experience.
2. "And every day" => Why the Current Solution Sucks#
Here, you want to explain how those people in step 1 are currently solving their problems:
- Are they hacking things together because there is no good solution? Are there incumbents in this space? Why can't they solve the problem well?
- What are the biggest consequences of the current solution? Time, money, effort? Complexity and headaches?
This sets up the next point, where you will explain how your solution is better at solving this problem, so highlight the problems that the current solution has that are directly related to the main value proposition of your solution.
3. "Until one day" => Your Solution#
Now that you have set up the customers, the problem, the current solution, and why they are not good enough, you can finally introduce your solution.
The biggest mistake founders make here is using jargon, marketing slogans, and ambiguous terms. Be specific and concrete. What exactly is the solution you are proposing? Is it an app? Hardware? A marketplace connecting two sides?
Narrow and focused is much better than broad and vague. Investors need to understand what your solution is like so they can easily understand why it is better than what exists.
4. "Because of that" => Why Your Solution is 10x Better#
Now that I know what your solution is, I need to know why it is 10x better. What is the main value proposition of your product?
Remember the "biggest problem of the current solution" that you mentioned in step 2? The value proposition you present here needs to be directly related to that big problem:
- Current solution is too expensive -> Your solution is affordable
- Current solution is too complex for non-experts -> Your solution simplifies the process
- Current solution is too slow -> Your solution is much faster
5. "Because of that" => Your Traction#
Now that I know what your solution is and why it is better, let's see if you have any traction to back it up.
Traction can mean many things, depending on your stage and industry. You have to show where you are on the ladder of proof, especially how fast you are growing.
If you haven't launched your product yet, you can talk about why you are confident in your solution: apparent interest from marquee customers, deep and relevant customer interviews, or a long waitlist.
6. "Until finally" => The Market You're Capturing#
If you are solving a real problem for desperate customers in a better way than the current methods, and you are proving it with your traction, tell me how big of a deal this can be.
Due to the economics of early-stage investing, investors need to invest in companies that can become very valuable. You want to take a bottoms-up approach: multiply the fees you can charge per customer by the number of customers in your market that fit your profile.
If the pitch has been concise so far, you can quickly add a line here about any adjacent markets that you can enter after the current market and how big those markets are growing.
These are just some examples of how other companies have told their stories using this framework, and this structure can apply to any company in any industry.
Fix your story and win
Just like Pixar, you don't determine the story with the first version. The best way here is to try one version of the story, see what works, and iterate.
A good way to do this is to use email testing: write down one version of the story in an email and send it to a few people you know and trust for feedback. Have them reply with answers to the questions you posed in the email and see if the story holds up and iterate based on any clarifying questions they bring up.
Feel free to send me your pitch with this template via email and I'll give you some feedback.