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April 28, 2014

Early stage founders have to do a lot of storytelling.  It’s important for fundraising, obviously, but also for recruiting, speaking to the press, motivating the team, etc.

There has been a meme going around about a talk that Kurt Vonnegut gave regarding the “shapes” of stories.  The idea that there are only so many different story-arcs out there, and that they can be illustrated  in a particular way.  There is a cool infographic here and there is a video of him talking about it here.

This got me thinking about the story-arcs of VC pitches, and the stories that get me (and I think a lot of different investors) particularly excited.  There are a few of them, but these three below really tend to stand out to me.

Story 1: Winter is Coming

Synopsis: Some structural change or shift is happening that is going to turn an industry upside down.  The hero company is either is making that change happen (best case), or is going to solve some major problem or capitalize on some major opportunity that presents itself because this change is happening.

Example: Uber. The first time a cab medallion owner saw Uber working, if he was a Game of Thrones fan, he said “oh shit… winter is coming”

 

Story 2: Jiro Dreams of Sushi

jiro

Synopsis: This is a story of craftsmanship.  There are tons of things broken about how a problem is being solved today.  The hero company is going to solve it 10X better than anyone has ever solved it before.  You trust this hero because she is just that good.

Example: Oculus is a good example of this. When you see their Kickstarter video, what do all the industry experts say? “I have seen lots of different VR goggles before… but nothing like this”. Another one of my favorite startup pitches I’ve written about before was for 2U (FKA 2Tor).  The first line of the pitch was “bar none, online education sucks. We are going to make it great”.

 

Story 3: The Undiscovered Country

Spock

Synopsis: I have seen the future, it’s just not here yet

Example: Ethereum or something like it is a possible example. In this story, the hero company contemplates a future that is a step function or two different from the current trajectory of technological innovation. It sounds whacky, crazy, hard to understand, and could be a complete miss.  But what is being proposed really does change everything, and that change will span multiple industries, making it a different narrative from story 1.   BTW, to learn more about Ethereum, check out their explainer video here.  (Thanks Aaron White for this example!)

In a future post, I’ll talk in a bit more detail about how entrepreneurs can craft their story effectively for different audiences, and go a bit deeper into the shapes of these narratives.  Until then, I’d love to hear other story-lines that I may have forgotten that are particularly effective and motivating.

  • http://www.semilshah.com/ Semil Shah

    Storytelling is so under-appreciated.

  • http://www.venturearchetypes.com Nathan Beckord

    Love the Game of Thrones reference. I think you could also pitch the Daenerys Targaryen storyline, e.g. “dream team comes into the market, kicks ass, and lays waste to anyone standing in their way” :)

  • http://www.adamlieb.me/ Adam Lieb

    If you had to do a quick/dirty breakdown of the companies you’ve invested in. What % would you say fall into each game? Eg 20% story 2

    • John Fazzolari

      Also, interested in what is most common and what works best for different types of startups? Feel like I see story 2 the most these days but am sure the breakdown is different depending on region, type of VC, etc..

      • robchogo

        Probably. The thing with story 2 is that it’s easy to tell, but hard to believe that the person really is as excellent and as much of a perfectionist as Jiro.

    • robchogo

      Good question. I think it’s something like 59% story 1, 20% story 2, 10% story 3. The rest is “other”

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