Every week several million viewers tune into the ABC show Shark Tank. And every week hopeful entrepreneurs stand before a panel of intimidating judges and pitch their idea or business or product or service in the hopes that one of the sharks will invest.
The pitches often start the same.
The entrepreneurs introduce themselves and state the terms of the investment they seek.
They briefly describe their product or business.
Then, well, there are a couple of options. An obvious choice is to talk math. Armed with the knowledge that investors want to make money (and often nothing else), entrepreneurs seek ways to convince investors that saying yes to this risk is a great idea. What better way to persuade someone than with cold, hard facts? Logic is always the best policy. Rely on numbers. Things like market size and conversion rates and ROI and marginal cost. It’s reassuring for the entrepreneur and sounds really official to the decision makers.
I will stop there to say it’s important to have your numbers straight, but as we learned in an earlier chapter, straight numbers are almost never enough. What is the secret formula for getting a life-changing deal?
Telling a founder story seems to be at least a part of it. In fact, in an analysis of season six of Shark Tank (smack-dab in the middle of the show’s run), my team coded all 116 pitches based on our story criteria and determined that 76.7 percent of the aired pitches told a story. Of those who did, more received a deal than didn’t. Perhaps part of the reason is, when it comes to a new product or idea, you’re selling yourself as much as anything else.
Skeptic to Believer in One Story Flat
Although his pitch wasn’t broadcast on national television, Brian Chesky and Airbnb were swimming with their own sharks as they searched for someone to grant them the funding they needed to launch what they suspected, what they knew in their bones was an incredible company.
But no amount of math in the world was going to bridge the entrepreneur-investor gap. There was an overwhelming lack of confidence in the idea, and investors just couldn’t see how it would all come together. With logic leading to nothing but dead ends, the young company had no option but to turn to the power of story to convince the investors they approached. The only person who could tell that story was the founder. And the only story he had was himself.
Remember Jeff Jordan, the venture capitalist who was convinced Airbnb was the worst idea he’d ever heard? He’ll stand by that claim but then add that after hearing Chesky speak, he was sold. When Jordan met with Chesky, he said, “I went from complete skeptic to complete believer in twenty-nine minutes.” Why? Because Chesky is a storyteller. “Every great founder can really tell a great story,” Jordan told Business Insider. “It’s one of the key things in a founder, that you can convince people to believe.”
With one simple story, his founder story, Chesky demonstrated what Jordan calls a founder/product fit. A story that illustrates the birth of an idea. A story that inherently says no other guy could have come across this idea at this time and in this way.
That fateful day, Brian Chesky faced one of the most intense experiences for an entrepreneur, and the thing that turned skeptics into believers was his story. It was enough to overcome any objections, create faith, and ultimately get a yes. A $112 million yes.
Excerpted with permission from Stories that Stick by Kindra Hall, copyright Kindra Hall.