Early-stage founders should craft compelling narratives by first identifying market shifts (the 'inciting incident'), then positioning their customers as protagonists facing challenges, and finally presenting their company as the mentor who provides the solution, using category creation to educate the market and generate demand through storytelling rather than traditional market analysis.
Startup Pitching Crafting a Compelling Narrative Framework
Added:[Music] your job is story and specifically so in the early days and and why is that well listen in the early days um you have nothing right you don't have a co-founder you don't have a team you don't have a product yet you don't have customers you don't have revenue you have nothing right all you have is yourself and your story and everything starts from that everything starts from having to convince a co-founder to join you even more so nowadays when many markets are really crowded and you need to stand out um you know imagine building a a business to business tool and you and you want to help people grow grow their business more or retain customers better or do anything for them to market their customers better and you look at what would this market look like and you google it and and you get this right that's your market right there whoa what am i gonna do right how do i how do i stand out and guess what even within this market there's companies coming out that are doing things differently and that are standing out and that are carving out their own category play bigger is basically advocating this approach where you look at category creation as a discipline as something that you can consciously do and that you can actually consciously do very very early on and so they define that as the discipline of creating and developing a new market category and conditioning the market so it will demand your solution and ground your company as its king and for me the key word in there is conditioning and don't think about conditioning as manipulating think about it more as educating right because what you're what it is about is not when you start talking as immediately start pitching yourself but first educating your audience whether that's your customer or your investor or your incoming employees you're educating them that people are looking at the world in a certain way they're seeing this crowded market or they're seeing this this zero market where there's nothing there and you need to educate them that there's an old way where that was true but if you take a different view on on a market or a segment then it is actually super excited and in that new world your product or solution is absolutely needed so it's a way of educating the market uh based on a unique insights allowing you to to generate demand and have people say wow actually i hadn't realized that that's absolutely true that's phenomenal and i can completely see that in that world i need what you have to offer and think about it as three different things category discovery is thinking about the gaps in the market the opportunities that there are etc um and finding that that different angle finding that unique insight companies like stripe for example that basically said guys in the old world payment gateways were chosen and implemented by finance guys and a decision was made by a cfo and hence they were made by finance people that worked with banks and and did all sorts of complex stuff and integrating them was really hard and then the iris brothers uh john and patrick collison came and and they pitched that seed stage and they said guys that's the old world in the new world where everything is online it's actually the developers that are choosing the developers have the power they pick and what they care about is simple apis and hiding all the complexity of a payment gateway and of the financials financial payment rules behind that and hide all of that behind a simple api and that's what stripe did and even in in that time when paypal was already there and braintree was over there and venmo was already there and you name it people felt payments was solved like they've now built a business that massively valuable company right so that's the discovery part but then you have to design it and again this is not just a veneer it is then what you do um i worked quite closely and and did some sessions with uh with some of the stripe folks including patrick collison and at some stage we had the most senior or one of the earliest product managers in stripe that came to our office in sequoia one of the things that amazed me from that session was how he explained that uh employee number five in in a payment company was actually a ux designer and you think like ux is very much for consumer and it's all about like the nice colors and the nice buttons and whatever but this was a ux design and i thought about the payment experience that that talked about how important it was for developers to have the right documentation for example and so they started focusing on that experience on the simplicity of the apis on the quality of the documents and if you if you speak with any company now in in the developer tool space or in the developer space at large they look at stripe as a shining example of an amazing experience and amazing documentation if the world outside doesn't understand you then why bother right and so making sure that that world understands you and whether that world is your co-founder or a new employee or that amazingly senior guy from google that you want to bring on board or that investor that you want to pitch to it all comes down to category expression or you know the point of view as this eye is symbolizing right and so when it comes to that it is very much again around conditioning that market to accept this all to new kind of journey so they understand what's missing and how the old way of looking at it was was incorrect if someone pitches to you and you start with a boring slide around okay this is the market the market is so big it's growing this buy there's spain points here there's inefficiency there this is the problem you lose people and so um that brings us to the the part around really you know developing that category story where are the masters of storytelling right they're they're in hollywood right there at pixar there are dreamworks and i'll quote a colleague of mine later on james buckhouse and one of the things he talks about is how great stories always start with with with great characters right and how they don't work with flat characters who are like singularly bad or good or rational or emotional but but round characters and shrek obviously is this round both in figure as as in terms of in terms of his character right and so great stories start with great characters there's always a protagonist that's that's the the word i remember the first time i worked with james buckhouse on a presentation it was operation for rlps our limited partners and the first question he asked me who's the protagonist and i'm like what are you talking about and so i got a bit of a lesson in storytelling and hero journey and um and then indeed that there's an antagonist but then indeed there is this call it a mentor or call it the master or call it the coach but basically there is a protagonist that uh that gets his advice right like or or support or coaching or a wisdom uh from from the mentor coach right and whether it's dumbledore giving an invisibility club to harry potter or q giving all these funky gadgets to james bond they help them win and succeed in in the journey that they're going through now the question in your startup who's your protagonist indeed guys it is the customer right and and so uh the the customer um is is going through a journey and that customer is facing a certain reality and he he has a problem otherwise he wouldn't be buying or using your product right um so indeed we are the mentors indeed right indeed you as a as a company not just as a founder but you as a company are the mentor hopefully you're giving that customer the magic gift um uh the magic gift to to help them uh you know be successful in their journey if you think about a good movie you think about a good story it starts with good characters but the next thing is narrative right at the most basic level story transforms a subject or or a protagonist or any person from an initial state to something new right because the beginning there's an end there's a once upon a time and then happily ever after but what happens in the middle is the narrative right and and that is how you tell the story so now you know who the characters are in your story right um and by the way when you think about the antagonist i get that question a lot it's not always the competitor because your customer is not fighting your competitor right he's finding something that is changing in his life or in her life right so that's an important um um that's an important thing to think about now how every movie starts and how your story starts is with a stage a movie starts there's a stage right and in your case like have a white piece of paper and your story can evolve now what happens in the beginning of a movie it's literally scene setting as they call it right they'll introduce the people they introduce uh sorry the characters i should say the places they introduce some basic situation uh some basic uh life now let me give you an example scene setting first first first scene or first two scenes in harry potter who's introduced harry is introduced his family is introduced his circumstances are introduced right circumstance he lives under the staircase right he's being bullied like crazy uh the parents love their their son who is this this chubby little bully who keeps bullying uh a harry potter and he's a nerd and he's a loser and that's kind of like how they depict it right but then in every movie something happens it's called the inciting incident this letter is the is the is the start of a shift right we're now suddenly saying like hey holy we're opening up this letter and and i'm not a nerd i might actually be a wizard i might actually be a hero i might be something different and it's indeed the start of a journey so when you think about when you think about your protagonist your customer he or she is going through a shift there is change going on right and and so the first the first step in in developing your your story is answering this first question like what is the shift that is happening in the market and again in the market for your customers so you can change it to what is the shift is happening to your customer or in the market at large macroeconomically or microeconomically or behaviorally or regulatory or whatever right but there is an old way or a new way um and sometimes there's just three steps right like for example i've seen people that pitch something around video and they say guys the web started with works then everything became pictures now everything is video and and here's some sort of impact and problem that they're solving right you want to be able to think about about that shift and somehow introduce that shift because again you are solving things in a different way you are providing a solution to make people successful in this new way um or in this new world but that new world is not easy if you think about that shift right um and why i'm showing this by the way because some people think that they have that they can answer it in bullets that's not good you should be able to write it in prose it's storytelling it's not like bullets on a powerpoint slide um also it's not like i need one page it's it's about because again think about this you want to be able to do this almost as a two-minute to someone um and so the way they they talked about it is you know asia's middle class is rising in the next six years 300 million asians below 35 of age will have significant disposable income often for the first time in their lives so the first shift that they're depicting here is you know asia back in the days maybe didn't have that much disposable income that's changing now there will be a lot of millennials that will have significant disposable income that's one then there's a second shift these consumers are different they don't want to buy cars or houses so old way buy assets right buy cars or houses kitchens or furniture new way they're investing into experiences into friends um into uh into activities and into what you could call their social graph so the second question you ask yourself is is what is the impact of that shift right the problem uh the problem it leads to okay um and again that could be the problem it leads to or it could be the opportunity that you can that you can grab and it needs to be tied together in that first question we've not spoken you've not spoken about yourself right around the mentor around the stuff that you're providing here also you haven't talked about it so you start very broad first part of the story you want people to be nodding and agreeing with you you get them in the mindset of agreeing with you so that when you start talking about yourself they also agree with you right um and here with the problem as well they want to be able to understand that problem so if you look at what uh xenium then does is again it goes from that large to a bit closer to what they're doing so the way they describe their impact of that market shift is that with every experience being shared and broadcast it's generation instagram right the millennials that they target terminally cares more than ever about how they look and how they appear right they want to be the best version of themselves they want to look fantastic and feel fantastic they want to be positive and confident have this strong personal brand and guess what one of the most important aspects of that featured in every selfie is a beautiful smile right and so this all starts coming together right but they're going from this macro economic thing to something that is more to do with maybe cosmetics with smiling etc right and so that's how they're building it up it's describing something that people will relate to and specifically when you when you when you say this to a a millennial or to someone who's active on instagram it should resonate [Music]
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