Crafting A Killer Startup Story For Your Fundraising Pitch
Co-Authored with Ryan F. Salerno, Technical Co-Founder at Equity Token.
Earlier this year, in response to the question “What are the most common mistakes founders make when they start a company?”, Justin Kan, the Founder of Twitch & Atrium, responded with the following:
“Mistake 1: Underestimating the importance of narrative when fundraising:
I firmly believe that investors invest in (and employees join, and journalists write about) compelling stories, and your pitch deck is really just a vehicle for telling the story you want to tell. So, start first with the narrative and build the deck after you have it nailed.”
Finding Your Killer Company Narrative:
You need a killer company narrative for your startup pitch. Wether you are telling your family about your company or speaking with investors while fundraising, how you communicate your company’s narrative matters.
From a pure story perspective, how do you do that? Let’s quickly introduce two frameworks we will be using.
Framework 1: Story of Stories
With this question in mind, I was recently reading a series of new posts called The Story of Us from one of my favorite authors, Tim Urban. In it, he breaks down the specific characteristics required for a normal story to become a story virus. Those characteristics are:
Simplicity
Unfalsifiability
Conviction
Contagiousness
Accountability
Comprehensiveness
Framework 2: Startup Focus
Jonathan Greechan, Co-founder of the Founder Institute, has a presentation on Startup Focus. According to Jon, your startup must do the following:
To arrive at your killer company narrative, you need a startup story that is simple and unfalsifiable, while also fitting the “Solve One Problem for One Customer” framework.
Here’s an example company narrative if Stripe were to go through this exercise.
Securely collecting credit and debit card payments is hard for developers. With the Stripe Checkout Product, developers can embed a payment form that costs $0.30 per transaction.
Your narrative is hiding inside the walls of your company’s brain, it’s a matter of drawing it out. Now let’s outline the steps, including all of the specific techniques used to arrive at a killer company narrative.
Step 1 - Prepare:
Over the course of a few days start brain dumping any and all talking points you currently associate with your company into your notepad.
Schedule a “Narrative Day” with your whole team. Find a conference room and book a day on the calendar with no other meetings, so you can focus on this project.
Buy the following supplies before the meeting and be sure to bring them with you:
Post-it Super Sticky Wall Easel Pad, 20 x 23 Inches ($30 on Amazon)
Different Color Sticky Post It Notes ($6 on Amazon)
Color Coding Stickers ($5 on Amazon)
Markers
As I mentioned above this process was inspired by Tim Urban’s “Story of Stories” framework. I highly recommend having your team read this post in advance of your company’s narrative revision meeting.
Step 2 - Brainstorm:
Stick up five sheets of the sticky wall easel pads around the room. Going left to right label each of them as follows:
Original Company Vision
Current Narratives
Goals For New The Narrative
New Potential Narratives
Target Customers
Hand out the sticky post-it notes to your team. If you want, you can give each person their own color so you can later easily see who contributed what ideas.
Start with the first board “Original Vision” by having each person on your team write down a sentence (small enough to fit on a sticky note) that describes your company’s original vision. Originally, when your company was an idea over beers, what was the initial pie in the sky dream for the vision?
Each person should write as many as they can think of in a few minutes. After time is up, everyone puts up their stickies on the wall and someone reads them out loud.
Step 3 - Vote & Sort:
Next, use the dot sorting technique. Give each person on the team a bunch of the green and red dot shaped stickers. It is now time to upvote and downvote the Original Vision board to determine which company narratives are resonating with your audience / customers.
Each person should place a green sticker on the ideas they want to upvote as resonating with your audience / customers.
Each person should place a red sticker on the ideas they want to downvote as resonating with your audience / customers.
Now rearrange the post it notes so the ideas with the most upvotes are on top, and the idea’s with the most downvotes are on the bottom!
You now have a clear and glanceable look at what is working and what is not with regard to your original vision for the company.
Step 4 - Repeat For Each Section:
Repeat this process for the remaining boards. Letting every team member contribute ideas and then helping to vote them up/down.
Current Company Narratives
What does the website say right now? If you asked someone else to describe your company back to you, what would they say? Write down an honest depiction of the current narrative.
Goals For New The Narrative
What do you want to achieve, given this new narrative? Hiring more employees? Signing up more customers? Getting more revenue? Getting more funding? A better brand? Whatever it is, write out all the goals.
New Potential Narratives
Brainstorm as many new potential narratives as you can think of. At this point there are still no wrong answers, so don’t filter yourself. Let the ideas flow and allow the dot voting take care of bringing the strong ideas to the top.
Target Customers
Who are going to be your initial target customers? Get as specific as possible. E.g. Startup founders running companies from Seed to Series A.
With the completion of each board, you will see a pattern start to emerge. Granting you a more focused and evolving clarity into how you need to structure your communications going forward.
Step 5 - Forcing Focus:
Remember those frameworks we introduced above. We are now going to apply them as filters to the narratives we just defined.
Sharing two more slides from Founder Institute Co-founder Jonathan Greechan’s presentation around focus for startups:
Put another sheet of the sticky wall easel pad on the wall and add the following to it, with room to write in answers under each:
One Problem
One Customer
One Product
One Killer Feature
One Revenue Stream
This template may seem obvious at first but as any founder can attest; the large magnitude of possible product features you can build, conflicting feedback, and more can sometimes feel burdensome. No body wants a bloated startup pitch. This structure is going to help you focus in on your specific startup’s niche.
Step 6 - The Story of Stories:
In Step 5 you defined your Focus, and now in Step 6, make sure your focus fits all of the criteria of being a killer company narrative.
This is where we come back to the Story of Stories. In the post Tim defines few necessary characteristics of a viable story virus:
Simplicity. The story has to be easily teachable and easily understandable.
Unfalsifiability. The story can’t be easy to disprove.
Conviction. For a story to take hold, its hosts can’t be wondering or hypothesizing or vaguely believing—the story needs to be specific and to posit itself as the absolute truth.
Contagiousness. Next, the story needs to spread. To be spreadable, a story needs to be contagious—something people feel deeply compelled to share and that applies equally to many people.
The story, once believed, needs to be able to drive the behavior of its host. So it should include:
Incentives. Promises of treats for behaving the right way, promises of electroshocks for behaving the wrong way.
Accountability. The claim that your behavior will be known by the arbiter of the incentives—even, in some cases, where no one is around to see it.
Comprehensiveness. The story can dictate what’s true and false, virtuous and immoral, valuable and worthless, important and irrelevant, covering the full spectrum of human belief.
Some great examples of strong story virus include Santa Claus and Catholicism. It is important you have an understanding around these characteristics as we are going to apply them as filters in the next step.
I recommend writing these characteristics down on another sticky wall easel pad so everyone in the room can clearly see the criteria that needs to be met.
Step 7 - Fill In The Blanks:
So we know have all of the following information at our disposal:
Original Company Vision
A understanding of what our company set out to do in the first place.
Current Narratives
What is currently working and not working.
Goals For New The Narrative
How we want to improve the company’s narrative pitch.
New Potential Narratives
The best candidates for our startups’ new story.
Target Customers
Defined segment of target customers.
Knowledge around what makes a good story in the first place
A solid template to force focus.
The next step is to fill in the blanks on the Problem, Customer , Product, Killer Feature, Revenue Stream template board.
The key here is to keep your answers for each to only a few carefully chosen words and to ONLY fill in the blanks with words that meet all of the requirements of the story virus.
String each of the answers together to form one sentence! Just like that Stripe example above.
Securely collecting credit and debit card payments is hard (PROBLEM) for developers (CUSTOMER). With the Stripe Checkout Product (PRODUCT), developers can embed a payment form (KILLER FEATURE) that costs $0.30 per transaction (REVENUE MODEL).
You now have your company’s new narrative!
Step 8 - Go Spread The Gospel
Start pitching your new startup story and see if it is resonating better than before. This process can help immensely when your company is fundraising. If you are like any of the companies I have seen use this process so far, then you should immediately start to see the benefits from this one day team exercise. Remember:
“Genius is the ability to put into effect what is on your mind.”
- F. Scott Fitzgerald
Other Founder Guides you might find helpful:
More on Tim Urban:
You may know Tim Urban from his famous TED Talk “Inside the mind of a master procrastinator”. On his website, Wait But Why, his articles tend to break down complex topics such as Artificial Intelligence, Elon Musk’s Neuralink, Religion, E-mail, Marriage, and so much more, to very simple explanations. So when Tim didn’t publish anything new for 3 years, many readers wondered what he was possibly working on. The answer was a new series of posts titled “The Story of Us”. If you have read and loved Sapiens by Yuval Noah Harari, then I recommend you check out The Story of Us: Full Series!
