My mission in my new role at TechSquare Labs in Atlanta involves not only evaluating startups as potential investment candidates but also curating them for inclusion in our workspace. In the latter case, we’re primarily looking for teams working on ideas of technical consequence. The goal is to have our small factory brimming with several dozen teams toiling away on worthy projects. We’re more about building companies than providing general startup educational programming. Others locally do the programming very well; we have different dynamics in our facility. Our ideal candidates will infect each other with enthusiasm and energy and will undoubtedly share in problem solving. We’re going to pay close attention to all the startups in our midst and find them whatever additional help they need or in some cases provide them services using our own in-house design/code/marketing/finance/advisory expertise. Our fund will invest in some of them. We’ll be measured on the wins that come through this process.
We’re offering similar services to corporate design/invention studios that are tackling interesting challenges. They add to the intellectual capital of our community and also feed on its vitality.
This is not intended to be a commercial for TechSquare Labs, but it does set the stage for the topic of the day. I observed founder Allen Nance give a presentation to a corporate client, and it was a superb example of telling a good story. He drew in the audience and got them excited about the potential for the project. It’s now under way. Allen mentioned afterward that he learned early on in his career that he had a gift for storytelling, winning the empathy of a potential customer, and closing the sale. He was working in my company at that tender age, and I can attest personally to his success with that method.
This recent column by David Leonhardt in the NYT talked about how people can misunderstand things presented as numbers or probabilities. He quotes the noted psychologist Daniel Kahneman, who said: “No one ever made a decision because of a number. They need a story.” He’s on point with that. In an age of unstable geopolitics, hearing that the chance of nuclear war with North Korea is 30% is far less alarming than hearing a story about the projected fatalities and damages to that country’s neighbors and perhaps even to the U.S. The story of what could happen is meaningful. A percentage is just a number.
When I listen to startup pitches I’m expecting some numbers, but I’m expecting them only after I understand the story and believe that it’s one that can be told succinctly and convincingly to potential customers or investors. Sometimes it’s surprisingly hard to draw that out of a presenter. I’ve been subjected to the drip method of disclosure where I keep having to ask questions to gradually arrive at the full story. What is the current state of your company? How did you get to this point? Who is on the team? What is the plan going forward? Talk to me about the problem you are solving and about your customers, if any. In what space are you playing? How can you build something big on the path you’re on? Who is your competition, and how do you better them? If it takes a half-dozen email exchanges to get the basics, my interest wanes quickly. I can’t make a forward introduction by sending someone a long thread of Q&A emails. I need a concise but comprehensive story-telling pitch in whatever format covers the subject.
The story needs to be specific to your business. That may seem obvious, but I am quite often being pitched along the lines of “invest in me because I’m doing something in AR, or VR, or any other R of your choosing.” I can’t assess something that is a nonspecific bet on the hot technology of the moment. Everybody now seems to insert AI, or Machine Learning, or Blockchain, even into a plan to open a donut shop. “Honey, I invested our entire 401(k) in an AI company, but it looks like someone ate all the profits.”
The surgical oncologist I advised for a couple of years began every presentation with this: “I’m tired of going to funerals.” He never failed to get everyone’s attention. Every family has been affected by cancer at some level, and people immediately understand the gravity of any business plan that proposes to improve cancer treatment outcomes. That was a very sellable story. It was long and complicated, but listeners could tolerate that because in the back of their minds I bet all of them were remembering someone they had lost to that disease.
The more you can make your story relate personally to your audience, the more likely you are to hold their attention and to get them to respond positively. You lose that advantage when your story is delivered via a medium like paper or a PPT file and has to be self-explanatory. Or, if you’re pitching a big room in a competition, you are limited in your ability to affect all the individuals in front of you. But, an alternative is to make your presentation itself a story of someone’s personal journey with your product. Let your targets imagine themselves in the role of a customer and form some feeling associated with that. It might get you to the next meeting or the next step.
My story in recent years has led me to the foregoing conclusions. I’ve been involved in the Longhorn Startup program for U Texas undergraduates. In that context I’ve seen how much more effective teams have been than loners trying to hitch a ride with folks they don’t know and with an idea not of their own devising. My curation today is influenced by that notion. I firmly believe our space will produce more success if it is populated by groups on the way up and not primarily by individual workers looking for a gig or maybe just for companionship. Those folks have many other fine choices in Atlanta or any other tech city.
My recent advisory roles with entrepreneurs aged 55, 60, and 68 have also influenced my thinking that sometimes it’s far better for them to have their companies built for them than to teach them the startup world from scratch. We’ve saved a lot of time and money by keeping founders on track with what truly compels them and preventing the distractions of all the nuances of startup formation, planning, and technical and financial execution. Age is not just a number, as the saying goes; it represents a whole different outlook on life and set of responsibilities that would hardly be imaginable to the prototypical 20-something incubator resident. The things that need to be taught and coached are entirely different. And, these more mature entrepreneurs are generally working on big ideas that require fat startups, not lean ones. They have deep wells of stories to draw upon when making their case to investors or customers, and they’re generally good at telling those. They need to spend 100% of their energy on backing up those stories by delivering on their promise.
And, that’s my story for the week. Stay tuned.