Successful entrepreneurs are just like very successful sales people: they use stories to get people excited, on board and signing that dotted line. Here, we lift the veil on the seven storytelling success secrets that every entrepreneur should know and use — and guarantee that your pitches will never be the same again!
1. Stories sell you
Investors are saying that the idea is 10% and the founder is 90% of their decision. Investors want to connect with you first as a founder/entrepreneur. You can connect fast, upfront and memorably by using a story to sell yourself first. Like the founder of Espressogrow, Mark Henderson.
Henderson could use the story of how he came up with the idea of his business while sitting in a coffee shop. He asked the barista what they did with the used coffee grounds. “We just put them in the bin” was the reply. Mark also found out that the shop alone threw out about 10 kilograms of grounds a day. He thought there must be a better way and started to research how coffee grounds could be used to produce fertiliser.
So Mark and his friend Geoff Howell quit their jobs as IT consultants and set up Espressogrow, which plans to pay coffee shops for their used grounds and then turn them into organic fertiliser. What a great story to start with and share with potential investors.
2. Stories sell your products
Yesterday we were listening to an expert who said that investors, customers, stakeholders all want to know upfront what value your product is to them. So you might say, “Our software does x, and the value to you is x, y and z,” before you go into the numbers.
Make your product or service come alive by using a story from a customer experience. Storytelling creates an emotional connection critical in selling an idea, a product or a change. What stories can you narrate about your products or services?
3. Stories need to have a purpose
The first cornerstone of successful business storytelling is being clear on your purpose. In the pub, with friends and in our social life, we all tell stories to fill time, to share and to be funny. All perfectly valid reasons in our personal life. But in business, as the storyteller you have to be crystal clear on the purpose of your story.
In the film The Social Network, Sean Parker (the founder of Napster) influences Mark Zuckerberg to think big, be patient and to maximise the value of the business by telling the story of a Stanford MBA who borrows $80,000 to open a high-end lingerie store. The man in question is Roy Raymond, and he calls his store Victoria’s Secret. Parker, played by Justin Timberlake, tells Zuckerberg that Raymond
“Makes a half million dollars his first year. He starts a catalogue, opens three more stores and after five years he sells the company to Leslie Wexner and The Limited for four million dollars. Happy ending, right? Except four years later the company’s worth five hundred million dollars and Roy Raymond jumps off the Golden Gate Bridge. Poor guy just wanted to buy his wife a pair of thigh highs.”
We know the story worked because Zuckerberg took Parker’s advice and held off Facebook’s IPO till this year.
The purpose has to be right for your audience. What works for a venture capitalist might be different to the story you tell your retail customer — so tailor purpose to your audience.
4. Stories must be authentic
This can’t be stressed enough. All your stories need to be real — it’s simply not worth the backlash on your credibility on your reputation in making up stories. And since life is rich in stories, why would you?
5. Stories need data backup
In business a story is the supporting act to your hard data. Think of your hard data as Batman and the story you tell as Robin. You need to have your business case, your ROI; whatever hard numbers you require to make yours a solid business case.
Equally critically, you also need to give people an easy way to make sense of the data — a story does exactly that and helps people make sense of the data and engage with it. A story makes the intangible tangible and is a different way of encoding data so it is memorable and engaging.
6. Stories can be ugly
Stories don’t have to all be about how wonderful your product is and how successful you are. Investors want to learn how you earned your stripes — what failures and learnings you have had along the way.
In 2009, Greg McLardie was raising money from venture capitalists. McLardie had also been involved in a previous venture — while CEO of Beta company — that had failed. He needed a story that would demonstrate his integrity and create confidence in his management abilities:
“Beta was like a building with a weak foundation and with many, many issues. The building structure lacked integrity and it was only a matter of time before it collapsed, taking a lot of innocent people with it. As CEO, I made the very difficult decision to close the building down. I am working towards securing the long-term financial health of the stakeholders. The lesson that I’m taking with me into this new venture is the importance of building solid foundations based on financial integrity.”
Over a period of three years McLardie was able to raise $37 million for his project. He explains his success by saying, “Storytelling allowed me to express the passion I felt for the business while conveying a fair representation of it based on substance.”
7. Not everything needs a story
And finally, not everything needs a story. Period.
If you just want to inform people then go with the data, but if you want to influence, shift behavior and get people to buy you and your product, use a story. In fact, use several stories.
Yamini Naidu is co-director and co-founder of One Thousand & One, a company that helps businesses succeed using storytelling. www.onethousandandone.com.au.