Justin Floyd
When you consider what the most crucial skill for an entrepreneur is, you’ll probably say creative thinking or problem-solving. By far the most crucial skill an entrepreneur needs to have is the ability to sell. It doesn’t matter how good your idea, product, or service is. If you can’t sell, then you have some big challenges ahead.
When storytelling is done right, it brings an emotional connection with your audience, and no one did that better than Steve Jobs of Apple. He was famous for his keynote speeches and making every Apple product relatable to the customer. Apple legend has it that Jobs told the team that designed the iPod to make it fit into the pocket of his jeans. Even at the ideation stage, he was already creating the “1000 songs in your pocket” story that the iPod became famous for.
Here are four things that storytelling will do for you as an entrepreneur.
Stories Sell
Sales are integral to the continued existence of your business and when it comes to sales, stories sell whilst products tell.
James Heskett and John Kotter demonstrated this fact in their book Corporate Culture & Performance. They found that companies that convey value and purpose have stock prices that outperform their competitors by a factor of 12 and also have a profit performance ratio that’s 750 times higher than companies without shared values.
Brands like TedX, Kickstarter, and Humans of New York are practical proof that stories sell. Ask any copywriter worth their salt, and they’ll tell you the same thing; the key to getting anybody to read a copy and buy the product is to find a story that connects with your reader. If you get the story right, the sale is all but assured.
Here’s another scenario. Suppose you’re creating an annual report for your business to submit to your investors. What do you start with? Text or data? Obviously, you start with text. This is because, in part, it allows you to write your own story, rather than waiting for others to interpret your data for you.
Many seasoned investors skip over the text and go to the data because they know that the story can influence them to take a certain action. Now, why wouldn’t you want to leverage that?
As humans, we are wired to create stories around data. And if you don’t purposefully craft a narrative around your data, you’re allowing someone else to write the script.
Stories make you relevant.
Many founders introduce their teams and themselves long before they eventually explain their service or products. Whether it’s a conscious decision or not, this act is grounded in the fact that stories connect us.
Founders that pitch their startups at Kickstarter, for example, put a person at the forefront of each startup. This allows both investors and customers to trust and support a human, rather than a company.
Stories provide context
Starting with a story can seem counter-intuitive, especially if you’re not used to storytelling, but because stories are memorable and relatable, they help ground any business strategy. This is a powerful tool at any stage of innovation.
Telling a story is invaluable when understanding the context of a challenge that your business is facing. And this applies to every industry and category. For example, let’s say your business is looking to innovate and build a product to optimize sales for SaaS startups. Many entrepreneurs, especially those technically inclined, are likely to start the innovation process with their product USPs or the latest technological advantage. And that’s not necessarily a wrong approach. However, by creating a story in the form of personas, the design becomes more human-focused. Once you start to look at your product and how it fits into your potential customer’s life and business, you can push your company’s thinking forward and create a better product than would have been made if you focused purely on the available tech.
Stories drive action
Are you looking to drive specific actions or influence an audience to act in a certain way? Tell stories. Stories resonate with people more than hard data, and yes, that includes investors and your board members. One mistake many entrepreneurs make is thinking that most business decisions are made on cold hard logic. In most cases, actions and decisions are made emotionally and then justified logically.
You won’t believe the number of times investors and VC’s say “yes” to a pitch because they “felt it”. And it’s not a bad strategy. After all, most of your customers will make buying decisions based on how they feel. So, if you can make a room full of investors “feel it”, your chances of getting an average Joe to buy from you is pretty high.
A study conducted in 2007 by the Wharton School of Business split participants collecting donations into two groups. One group was told how the money collected would benefit their own lives, the other group were told stories of how the money they made would help the lives of others. The stories told to the second group instilled a sense of purpose in those participants, and they earned more than double the average of the participants in the first group.
With a well-told story, you can inspire your team to be more productive, get investors and board members to support your vision, and get your customers to buy from you. Imagine you’re presenting as a CEO, and you’re explaining that moving forward, the company strategy would be to improve customer experience. This is a noble strategy, but it might not generate the response you want. Instead, by creating and sharing a story of how an improved CX will make Mike’s (your customer’s) life better and lead your company into the future, you can drive the action you want.
Conclusion
The most successful companies worldwide have profound stories behind them that instill a sense of a bigger purpose and meaning into what they do. These stories are often connected intimately to their founders. For instance, Google, Tesla, and Apple are much more than just companies, they are legacy brands created by visionaries that dreamt they could change the world. And they did.
It’s not surprising that these brands have been ranked among the 10 most empathetic companies by the Global Empathy Index and are among the fastest-growing and profitable companies in the world. Additionally, the top 10 companies on this index generated 50% more earnings and increased their value more than 2X than those in the bottom 10. This shows that there’s a strong link between purpose, empathy, storytelling, and commercial success.
Even if you’re not trying to be Steve Jobs or build the next Apple, you need to ask yourself: Do you want your business to be just a product or service provider, or a vision that an audience believes in and aspires to?