Human Forces #1: The Power of Stories In Startups
A newsletter about the Human Forces that drive the fate of companies: Stories, Connection and Balance.
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“No one ever made a decision because of a number. They need a story.”
― Daniel Kahneman
A Startup is a Story
In the beginning, a startup is a story. It’s a story we tell ourselves: “In the future”, the story says, “In the future a thing will exist that I will build. It will be a change I make in the world, a change with real meaning, if only to me”.
The story is personal. The details (as we will learn, a story is nothing without the details) are yours. The center of your story may be a technology, a set of business rules, some combination of insight and timing, but the result is the same — this future (a scene, a collection of people, a new way of doing an old boring task) is now possible.
The energy of that story moves you to action. You find others who share it. You build a small version of it, discover people who believe the story enough to commit money, or time (or both), and it begins to grow.
And then you have a company. Now your task is to keep telling the story, but to a wider audience. To talented humans you want to recruit; to people you want to sell to; to a growing tribe of tens, then dozens, then hundreds of people who are now depending on the story for their livelyhood, their careers.
From the very beginning, stories fuel your startup. Stories provide the energy. The rest — the business plans, org charts, OKRs, deadlines, budgets — are mechanisms, containers for the energy of the people who make the company. The mechanisms have to be well made, skillfully done. But the goals get met, products get built, deals get done because of that energy.
“We are the only species with the ability to use language—not just to describe things we can see, taste, and touch, but also to invent stories about things that don’t exist.”
― Noah Yuval Harari
Stories as a Super Power
Individually, human beings are pretty unimpressive creatures. Yes, we can think, rationalize and build tools. Yes we have opposable thumbs. Those are not our superpowers. What makes us powerful is that we can cast a view of the world into another person.
I can tell you what I want to build, and, with luck and some skill, you can see it, feel it. It becomes a possibility transmitted from my consciousness to yours. We can cast a view of how the world should be into an entire group of people, have them understand it, refine it and act on it.
It doesn’t feel exceptional, but it’s what has pulled us away from competing with the animal kingdom on its own terms of brawn and endurance, and into the unfair fight of planning and coordination versus physical power.
“The human species thinks in metaphors and learns through stories.”
― Mary Catherine Bateson
What Stories Do
Stories existed long before we learned how to organize facts into rational models. We learned about the world through feeling the experience of others. Numbers, charts, calendars are evolutionary newcomers: we understand them, but they don’t connect to our deep, rooted motivations.
Not surprisingly, given how central they are to our evolutionary dominance, we are deeply drawn to these imagined realities. As soon as somebody begins to tell a story, our attention is immediately grabbed. We begin to imagine ourselves in the world that is being cast.
Stories entrance us with possibilities, with meaning, with who we could become.
This is a pretty great story:
"AI will make it possible for one person to build a billion dollar company very soon"
― Sam Altman
This is a story about a person. We immediately wonder about them — it could be us! And they’re being active, they are building. The stakes are high! It’s a story about transformation: this person will create something huge, by themselves. The story moves, even though it’s only sixteen words.
Compare it to a statement of more or less the same information (my summary):
“Within a few years, the efficiency of AI will increase such that a large fraction of the work of building a company will be available at marginal cost”
Not wrong. The same information. But flat, unmemorable.
“…the essence of bullshit is not that it is false but that it is phony"
― Harry Frankfurt, On Bullshit
Stories As Tools and The Danger of Bullshit
Stories are necessarily about making stuff up. Even if you’re recounting a trip to the dentist you’ll be selecting what was interesting, guiding the listener to some kind of “why”, a reason for telling the story (“it was a disaster”, “it was boring”, “the new doc is cute”).
If we consider a story as a tool — a tool for transmitting information in a way it will land — then we could say a “good” story would be one in which we use the tool skillfully, to guide the imagination of the listeners towards a useful view of the world. “The dentist called his therapist while he was drilling my filling out” is a good story, both because it’s vivid, funny (depending on the delivery) and it tells us not to visit that dentist.
But stories are made up, remember. They are, in a way, proposals. The teller suggests “how about this?” and depending on the story and the skill of the telling, we may or may not accept it. So some stories are, regretably, bullshit. (Silicon Valley splendidly nailed this with the scene of startups pitching nonsense and ending with "and we're going to make the world a better place”).
It’s worth considering Sam Altman’s story above ("AI will make it possible for one person to build a billion dollar company very soon”). Is this bullshit? Is it a good story? How do we tell?
I'm going with it's not quite bullshit: we can see how it might happen. And, yes, it's a good story. It’s inspiring thousands of coders, builders and entrepreneurs as we speak. Should we be aware that it's made up, even as it gets our attention? Definitely. Should you be careful about the Bullshit Line when you're telling your own stories? Yep. (We'll come back to it in a later post. Among other things, the Bullshit Line depends on your audience).
"You can have the best strategy and the best building in the world, but if you don’t have the hearts and minds of the people who work with you, none of it comes to life."
― Renee West, Former President of Luxor and Excalibur Hotels
Stories You Need to Tell
Every startup has at least these stories, and usually many more. They will exist whether or not you decide to refine them and tell them. They have real power. The more you pay attention to these stories and tell them well, the more you are building the core energy of the company itself.
The Origin Story: this is about values. It’s the essential “why”: the reasons you started this whole adventure in the first place and therefore the reasons you keep building.
The Vision Story: the world you think is possible. The transformations you are looking to make happen in the world.
The Culture Story: This is about identity. Who are you? At some point in this story the phrase "we are…” should show up. And, yes, a company is a social unit that provides all kinds of identities.
The Strategy Story: be careful here. There's a difference between the Strategy and the Strategy Story. A Strategy is a mechanism: dates, spreadsheets, numbers. The Strategy Story is a set of assumptions about the future.
The “We Are Here” Story: makes it clear where the company, the collective "we" are in terms of business dynamics, and how we want the collective to feel about it. (This tends to be where we get into precipices, war-time, struggles and other tricky metaphors. Try and avoid cliche!)
The “This Is What Happened” Story: a great quarter, a great deal close, a strange product launch, a competitor goes out of business. All of these are fuel for stories, which, of course, ideally tie back to Strategy, Culture and/or Vision.
The “This Is What We Did” Story: a merger, a layoff, a strategic decision. How did you get there? How does it tie back to Culture, to Vision?
There are, of course, many others. Every day is a chance to build the creative energies of the people that form your company.
“Scratch the surface in a typical boardroom and we're all just cavemen with briefcases, hungry for a wise person to tell us stories.”
― Alan Kay
A Career Changing Story
At some point in the 80’s, I decided that the tech world had gotten boring. Operating systems were settled, window systems were figure out, I’d been through one startup boom, one IPO and crash — what more was there to do? (You may think this represents a tremendous failure of the imagination. But there was a lull there).
Then I went to see Alan Kay give a talk. Towards the end, he showed a video of recent work in CGI. It was a scene in a Startrek movie in which the Genesis Device is dropped on a dead planet. It showed a wave of life rushing across the grey ground, flames bringing it to life. It was, at the time, incredible. (it looks so tame now!)
“In two years”, he said, “you’ll be able to do that on your desktop”.
I was back in. Stories are powerful.
What’s Next?
Stories are a huge force driving startups and there’s a lot to them. In the next issue we’ll talk about How to Tell a Story (a short version is here).
Then we’ll move to Connection and how an organization is a much more organic and complex thing than and org chart.
And then to Balance and how we are constantly balancing Emotion and Reason, Narrative and Analysis.
In Person
I will be leading an in-person workshop on storytelling for Founders, CEOs and execs at Shack15 in San Francisco in Q1. Take a look, and use code EARLY to get 50% off!