Storytelling as a Strategy: What Entrepreneurs Can Gain from Crafting a Compelling Narrative
This article was originally published on NextBillion.
Screenwriters and journalists can offer valuable lessons for entrepreneurs in how to draw an audience. As Steven Spielberg once said, cinema’s power of persuasion is illustrated in getting “everybody to clap at the same time.” Likewise, journalists prove that where, why and how a story unfolds is as important as the story itself. In our experience, successful entrepreneurs tell stories with persuasion, purpose and context. They show how an invention or business model disruption can foster more inclusive markets, and why their time is now—and then they must arouse varied stakeholder audiences to clap in unison.
After developing a credible product or service, entrepreneurs must create a compelling narrative in complex markets to attract investors, customers and talent. Building these narratives goes well beyond “pitching”: It is a deliberate process of describing how an idea works, how it creates value, and how it catalyzes change – with storytelling at its heart. While storytelling is rightly emphasized as an important part of the entrepreneur-investor conversation, it’s also critical for entrepreneurs beyond the investment raise: Growing a company requires ongoing investment in brand building, and brands are forged through promises and stories.
At FINCA Ventures, I work with small and growing businesses to find the narratives that will attract financial capital, customers and talent for growth. These narratives help young brands create the organizational underpinning to bring together investors, consumers and employees alike. In working with social entrepreneurs as they seek new rounds of capital, I have observed two essential best-practice approaches to help early-stage companies craft compelling narratives as they build market traction and proof points. Let’s take a look at how two innovative businesses put them into action.
Changing the Narrative from Within in the Face of Daunting Market Conditions
From 2018 to early 2019, the investment landscape for distributed solar energy looked grim. Mobisol, a large player in the market, had just filed for bankruptcy, with several influential investors suggesting an impending market correction. Against this backdrop, Amped Innovation—a new solar energy company—was looking for term sheets for Series A funding. How was Amped going to raise capital when its more established peers in the marketplace were facing financial challenges and fueling doubt among investors?
To answer this question, Amped returned to first principles: the customer value proposition. Amped theorized that part of the reason energy companies had been struggling was because the brand promises of productivity gains through energy access were not being realized—hence latent demand was not being converted to actual demand. To build customer trust and win investor confidence, Amped realized it must flip this prevailing market narrative. The team began to develop a new story by asking customers, “What do you want to do with your power?” This question reinvigorated customer excitement in a sector with unrealized potential by galvanizing customer demand—a critical proof point for investors.
Amped then built a vision of a solar-powered ecosystem of products designed to replace diesel fossil fuels and power business activity in emerging markets. The team developed an innovative product roadmap that could deliver greater and more affordable productive-use power. By providing this pathway for a market focused on moving towards productive-use power, Amped gave “renewed energy” to the renewable energy market story, changing the mainstream narrative from within. Amped went on to secure Series A funding, and the messaging around empowering business became a focal point for management, guiding their efforts to build their product, their team and, critically, their brand in current and future markets.
Simplifying the Complex by Joining a Larger Narrative
Today, in Kenya, less than 5% of human waste is properly treated before disposal. While other sectors have witnessed system-transformative innovation, sanitation has remained relatively stagnant for years, in areas where replicable business models seemed out of reach. Sanivation developed a way to make waste treatment a revenue center rather than a cost center, and recognized that their innovation could offer a sustainable approach even in challenging markets. They realized, however, that their narrative had to go beyond “invention” in order to gain investor traction and spark the necessary systems-level change.
Sanivation needed to identify a storytelling framework that captured the three main components of their business. First, they were turning a cost center into a profit generator by converting human waste into a biomass fuel source. Second, their solution would work with existing municipal infrastructure—pit latrines and vacuum trucks—making it readily adaptable by emerging-market governments. Third, the biomass fuel source would help solve a larger industry challenge around the environment and deforestation. But while it was powerfully holistic, Sanivation’s business was also complex. Unlike Amped, which had to upend a single assumption in a challenged ecosystem, Sanivation needed to counter the complexity of its business with a familiar tale. In short, Sanivation needed to fit into an existing narrative while conveying its disruptive strategy.
In formulating these insights, Sanivation was able to identify one unifying narrative that was already familiar to investors, partners and companies: the “circular economy” concept. Armed with a familiar format for their new story, Sanivation approached local governments and industries with one cohesive vision—a commitment to addressing pressing health and environmental challenges through a best-in-class biomass fuel product. This brand messaging immediately sparked partnerships with key agents in local economies. In turn, Sanivation catalyzed interest from corporate, strategic and infrastructure investors across the globe. Today, as they build on these partnerships, their brand stands to become a unifying symbol of community collaboration.
An entrepreneur’s narrative, grounded in a customer value proposition, must be refined to attract capital, build assets and drive company growth. But narratives also serve to build brands and grow business value. Brand and storytelling work in concert, helping to upend established narratives or more clearly articulate a series of complex ones. When leveraged strategically, storytelling is a powerful mechanism for bringing together investors, customers, employees and promises that, hopefully, create meaningful—even transformational—economic and social value.