How to Tell A Startup Story - Mike Troiano

A good story attracts customers, talent, and capital. Here’s how to write one that works.

If you need a better story for your startup, I promise you’ll know exactly how to create one by the end of this post.

Quick background… I spent my first act in big New York ad agencies, and my second in venture-funded startups. The startups needed better tools to tell their stories, and I adapted those from the agencies to help.

The framework evolved, getting simpler as I learned what worked. I’ve since helped hundreds with this approach, and while not all succeeded, none failed for the reason so many startups do: an inability to communicate their customer value hypothesis in a way that attracts customers, talent, and capital. I’ve used it at MassChallenge and TechStars for nearly a decade, and taught it at both Harvard and MIT in the past month.

It works. But you know what? I’m sick of doing the workshop.

Instead, I’ve written this. The rest is up to you (though I’ll even tell you toward the end how to get my help.)

Ready? Let’s go.

Why a story?

“The best arguments in the world won’t change someone’s mind. The only thing that can do that is a good story.” Richard Powers

To be human is to tell stories, and to want them.

What makes human beings special — the primary reason we stand astride the world, lording over the beasts of land, sea, and air — is our ability to tell stories.

If you think that’s wrong, read this (it’s a book.) If you’re just not sure about it, read this (it’s short:)

A good story of how your startup helps customers is fundamental to your success. The customers, employees, and investors you need to survive (let alone win) are busy, distracted human beings just like you; caught up in their responsibilities, ailments, grievances, wants, desires, obligations, and imagined victory narratives. To cut through all that you need a well honed machete, and the edge of that machete is a quick story that moves people from where they are to where you need them to be.

Most entrepreneurs figure this out eventually, but even those that do often struggle to create one. One reason is they don’t understand what makes a good startup story.

What makes a good startup story?

You need to tell the story of your startup in the form of a simple sentence — sometimes called a Positioning Statement — that explains why it matters in both rational and emotional terms.

Let me explain each of these criteria, so you can keep them in mind as we approach the exercise.

A good startup story starts with Why

Most startup positioning statement are crammed with all manner of marketing cliché (“robust technical platform…”), MBA jargon (“value-added blah blah blah…”), and Silicon Valley bullshit (“mission-driven paradigm shift.”) Product-focused founders like to lead with the “What,” and technology-focused founders tend to get lost in the “How.”

This despite the almost supernatural power of leading with “Why,” as explained below in the seminal TED Talk by the brilliant Simon Sinek.

If you’ve seen it (and if not, please watch it, it’s totally worth it) here’s my crude distillation for purposes of positioning:

Nobody cares what you’re doing, or how you’re doing it, until they know why it matters to them.

Again, it’s basic human nature. We’ve evolved to pay attention to what matters, and ignore what doesn’t. When two protohumans were walking the savannah 200,000 years ago, one was focused on a butterfly, and the other on a tiger with 14-inch fangs. The former died horribly, and the latter is your very distant relative.

Today, the people whose decisions matter to the survival of your startup are surrounded by butterflies. They’re drowning in marketing messages, confronted everywhere by suspect claims of transformative benefit, and buried in requests for what other people need. Relevance is the currency of the realm when it comes to capturing their attention. Leading with Why is like a life hack that makes you the tiger. It communicates that paying attention *is important to them — *not just to you *— *and it’s critically important to cutting through the noise being created by everyone else.

Leading with Why draws the attention of exactly the people you can help. Once you have that attention, the challenge is hanging on long enough for them to understand the What and the How as well, and the thing that will keep you from meeting that challenge is complexity.

A good startup story is simple

Complexity creates friction in the absorption of new ideas. To start the flywheel of startup success, you need to minimize that friction with a message simple enough to easily grasp, get excited about, and share. That’s harder in some startups than in others, and that’s ok. The secret is bringing people along step-by-step, building understanding and interest as you go by being thoughtful about which ideas you share when, and how deep you go at each stage.

Here’s a visual to help illustrate the point:

Moving from left to right on this wedge represents a single person’s journey in understanding your startup.

The tip is the briefest possible expression of your startup story, and it’s where great positioning begins. From there you can go a little deeper, expounding on the story, adding new ideas and information. It make take 15 minutes for your prospect to fully grasp what you’re doing, and what makes it so exciting. But you only get there from left to right… not by driving people into the wall of information from right to left.

How do you know if the tip is sharp, if your startup story is simple enough to succeed? One way is to limit yourself (and your team, eventually) to a story you can tell from memory in a few seconds, without notes or needing to refer to slide 17 on your pitch deck. Think of it this way:

You have more riding on your startup than anyone. If you can’t hold its story in your head, then no one else will be able to either.

For most people that means a sentence, or maybe even a few words. Doubt you can tell a story in just a few words? Ernest Hemingway was asked about this once at a table of reporters, and said he could tell a story that could make you cry in 6 words. “Nonsense!” they said, and bets were placed.

Hemingway stood, and said:

“Baby shoes for sale. Never used.”

Eyes welled, and he drank for free that night.

While you’re not going to come up with anything that good, you don’t need to. You just need to find a sentence that works to get the right people interested, and Papa already shared the another secret to doing so.

A good startup story is emotional

The third and last thing good startup stories have in common is they operate on the listener in both an emotional and a rational way.

Startup positioning is not an academic exercise. For your story to be effective, it needs to drive the listener to action, to change what they do and not merely what they think. The key to that is changing what they feel, for reasons that are — once again — entirely biological:

Consider reading that one again. I promise it will help.

Back? OK, let’s recap…

You need to tell the story of your startup in the form of a simple sentence — sometimes called a Positioning Statement — that explains why it matters in both rational and emotional terms.

If you’ve tried to write that sentence from a blank page, you’ve probably failed. Even I can’t do that, and I’ve been doing this a long time.

There has to be a better way. And there is.

How do you write your startup story?

The secret to producing a positioning statement that works is breaking it down to its essential elements first. Once you know what those are, you can haggle over each in your own head (or with your own team,) put them down on paper, and then focus on putting the puzzle together from pieces already on the table.

There are other frameworks out there, but this is the one I use, and it’s easy. The 6 essential elements of positioning are as follows:

TARGET — actionable universe of buyers
SEGMENT — key, predisposing attribute
BRAND — the name of your company
CATEGORY — a competitive frame for the buyer
DISTINCTION — what makes you unique
PROOF — perceived evidence of truth

Pro Tip #1: If you’re doing this exercise as a team, tackle these separately at first, then come together to compare notes. It will surface differences of opinion you can discuss and get aligned on, saving you frustration and grief down the line.

Here’s an explanation of each element, and my “Top Ten” tips on how to get them right:

TARGET — An actionable universe of buyers. “Actionable” here means possessing of some externally observable attribute, something that can be identified and targeted by your marketing demand gen program. Examples: Small business owners, C-level executives, Boat owners, Busy women, Students, Travelers.

Pro Tip #2: We’re looking for one or two words MAX here. Remember this whole thing needs to be sentence you can hold in your head. If it’s hard to do that with just the first step, you’re not going to make it.

SEGMENT — A subset of your target possessing of some key, predisposing attribute. Not everyone in the customer target is equally likely to buy what you’re selling. What separates those that are from those that aren’t? Examples: …focused on saving money, …concerned about growth, …looking to upgrade, …trying to be healthier, …unsure about their major, …afraid of motion sickness.

Pro Tip #3: If you’re struggling with this, imagine you were in sales mode, working a cocktail party full of people in your target audience. What question would you be asking guests to determine who was the best person to spend time with, the one most likely to buy? The answer to that question usually points the way to the segment you should focus on, and often evolves to become the focus of the “Discovery” phase in the sales qualification effort.

Pro Tip #4: Remember to think in emotional and not merely rational terms here. Does a likely buyer feel something an unlikely one doesn’t? If so, that’s PURE GOLD when it comes to positioning.

BRAND — The name of your company. Don’t have a name? That’s fine. It’s rarely a value driver, and always better to come up with one based on the positioning you’re working on right now. Example of a great name: Pets.com (epic fail.) Example of a shitty name: Chewy (triple deca-corn.)
CATEGORY — A competitive frame that makes it easier for a buyer to understand what you do. You should pick a category people already understand, then use the same language they use to describe it. Examples: direct-to-consumer clothing brand, online pet supple store, disaster recovery solution, sourcing automation tool.

Pro Tip #5: “But I’m creating a totally new category!” said the first time entrepreneur. “Sucks for you,” said smart money.

The role of Category in the flow of positioning is to attach to something the customer already understands, to shortcut the time, effort, and money it takes to put something entirely new in someone else’s head. Faster, easier and cheaper to just take something already in there and start with that, THEN focus on how, exactly, you’re different (stay tuned.)

Sometimes you need to create a whole new category, and you can. But it’s really, really hard:

DISTINCTION — What makes you unique in the eyes of the customer. What sets you apart from category alternatives? If you’re doing something fundamentally new, here’s the place to claim it. Examples: …lets you recover instantly, …saves you time and money, …that delivers every time.

Pro Tip #6: If there are many customer-relevant things that set you apart from the competition, good for you. If you’re selling to a human being and not a housefly, you’re going to need to communicate those things one at time, and it’s best to do so sequentially from the most important to the least. So which one goes first? That’s what you want here, the rest can come once we’ve secured the target’s attention, and (most likely) know more about how they might be relevant (or not) to them. Great positioning is often an exercise in prioritization, more than invention.

Pro Tip #7: Check the web sites of competitors and category alternatives before you pick something as your distinction. If anyone claims the same, keep thinking. If more than one claim some version of it, it’s probably table stakes, and customers will discount it immediately.

Remember you can’t launch a laundry detergent with “stain fighting power.” Everybody claims that, which makes it invisible to people standing in the grocery aisle, trying to figure out which detergent to buy.

PROOF — Last up is proof, which I’ll define as perceived evidence of truth your claim of distinction is legitimate. What should you say first to the key segment of your target to get the benefit of the doubt about your distinction in the category they already understand? That’s probably the right place to start. Examples: …uses proprietary AI technology, …based on next generation neuroscience, …driven by data and not intuition.

Pro Tip #8: The key word here is “perceived,” not “empirical.” If likely buyers are convinced enough to keep going, then it’s proof for purposes of positioning. If they’re not — no matter how big the White Paper you can deliver to prove them wrong — then it’s not.

So… the first step in building a good positioning statement is getting agreement on its 6 essential elements:

TARGET — actionable universe of buyers
SEGMENT — key, predisposing attribute
BRAND — a name you call yourself
CATEGORY — a competitive frame for the buyer
DISTINCTION — what makes you unique
PROOF — perceived evidence of truth

Worth noting here that effective positioning is built from the target, back rather than from the product, forward. If you have a product and you’re not sure who’s going to buy it and why, then you have a science fair project, not a startup.

The cold draft positioning statement

Once you’re at this point, it’s time to combine the elements, into a sentence that looks like this:

For [TARGET] who are [SEGMENT], [BRAND] provides the [CATEGORY] with [DISTINCTION] because of [PROOF].

You can communicate the value proposition of anything that has one using this simple formula. Example:

For [DRIVERS] [WHO VALUE PERFORMANCE], [BMW] provides [LUXURY VEHICLES] that [DELIVER JOY] through [GERMAN ENGINEERING].

BMW is talking to drivers. The drivers they’re interested in are those who rate automotive performance as more important than other qualities (like quality, value, safety, sustainability…) The brand is BMW (shitty name, made powerful through decades of consistent product execution and messaging), and the category is luxury vehicles, meaning cars and SUVs that have stuff you want but don’t really need. What separates a BMW from the “luxury vehicles” from Mercedes and Lexus? JOY, actually, specifically the joy of driving, and what makes that possible is German engineering.

Really? German engineering, as the source of joy? In the mind of the marketplace, you bet. Say what you want about those Germans, but people see them as precise people who show up on time and make very good machines (all true,) and that’s what makes this proof.

Pro Tip #9: Great positioning doesn’t just shape your marketing, it shapes your product. Every aspect of the BMW driving experience is about putting the driver in control, from the buttons on the steering wheel to the sound of the engine. A BMW does whatever its driver tells it do, period. In a Lexus, you can’t change the destination on the nav without being in park, or turn off the traction control when you want to. Some people see that as a safety feature, but BMW drivers (like me) see it as a joy bug.

Another example:

For people around the world, Coca-Cola is the soft drink that is the real thing since 1886.

Coke is talking to pretty much everyone, so the core of their positioning is really just two words: real thing. Coke is the real thing, the Mack Daddy, the OG. Pepsi is black sugar water too, almost chemically identical, but it’s the choice of a new generation. Totally different.

That’s how Coke and Pepsi do battle, decade after decade, in the brand marketplace… as The Real Thing, and The Choice of a New Generation. If you think it’s bullshit, I would remind you it’s the basis of hundreds of billions in hard dollar market cap, and the reason people around the world decide every day to pay more for Coke than any other soft drink. Who are we to judge?

It’s not just consumer brands, it works for “business-to-business” too:

For industrial manufacturers who are challenged to differentiate, BASF is the raw materials supplier that makes products better through engineering depth.

BASF (another terrible name, another massive business) was a chemical company that sold the same molecules and compounds as everyone else, and was facing down big pricing pressure as a result. To differentiate themselves they decided to focus on talking to manufacturers who were also struggling to stand out from competition, those “challenged to differentiate.” BASF built a stable of some of the best chemical engineers on the planet, and then set out to help those customers create a sustainable advantage. In time they built a reputation for doing exactly that, and a global behemoth was born.

Pro Tip #10: I hate the “B2C / B2B” distinction. Remember companies don’t buy anything. People inside companies decide to buy things, and those people are influenced by the same biological forces at work as they are when they get home.

Here again, BASF’s positioning came to life in decades of brilliant and consistent creative execution, some of which you‘ve likely seen:

What’s important to understand here is you don’t come up with “the creative” (the ad, the tagline, the clever turn of phrase…) first. You start with thinking hard about the elements, THEN assemble a cold draft positioning statement, THEN refine, polish, test, adjust, learn, refine again… executing consistently over time until you find something that really works hard for you.

Sound like a lot of work?

It is. The good news is you’ll get value from the effort all along that journey. Creating it will surface important strategic questions, and get your team on the same page. Using it consistently will make your marketing more effective and shape the priorities of your product, reducing friction in attracting capital, talent, and customers. Refining it will mark your progress from what you think you’re selling today to what the world actually wants to buy.

In my experience, those are often very different things. Steve Blank sometimes talks about the startup journey as “a process of corrupting your vision with external reality.” You can’t do that without getting other people to pay attention. And you can’t do that without a good story.

Now you know how to tell one. Follow this model, do the work, make your best effort. If you get stuck, ping me for help here, and I’ll do my best to get back to you.