The Power of Pull for Startups
John Hagel has a compelling post The Untapped Potential of Corporate Narratives, where he explains the importance of narratives, and why they can make the difference between institutions that either crumble or grow stronger.
If you replaced the context of the institution by the startup, the same concept applies, and even more forcefully. First, let’s review the difference. For background, you might be familiar with story-telling, but there are fundamental differences, as John Hagel explains it:
Stories are self-contained – they have a beginning, a middle and an end. Narratives on the other hand are open-ended – the outcome is unresolved, yet to be determined. Second, stories are about me, the story-teller, or other people; they are not about you. In contrast, the resolution of narratives depends on the choice you make and the actions you take – you will determine the outcome.
A dumbed down interpretation of the power of the narrative, is to substitute it by another familiar expression: capturing our imagination. When a startup or company begins to capture our imagination, we start to complete our own narrative, taking action choices of our own, therefore using the product more, being more engaged and more loyal to it. We become emotionally attached to it, and that bond is very strong. And it “drives us to do amazing things.”
According to Hagel, the specific benefits of a strong narrative are very real because it’s about “connecting with and mobilizing others beyond the boundaries of the institution.” (replace institution by “startup”) He lists the following benefits that I’ve summarized here:
- Differentiation – it helps you to stand out from the crowd
- Leverage – it mobilizes people outside your company
- Distributed innovation – it spurs innovation in unexpected directions
- Attraction – it draws people by the opportunity and the challenge you have laid out
- Relationships – it spurs sustained relationships with others that have fallen under the spell of your narrative
John Hagel gives the example of Apple and Nike, two companies that have very powerful narratives. Let’s bring it to the context of startups (although some are now grownups).
Twitter is the quintessential new company with a very strong narrative.
Twitter’s narrative has been well depicted in their recent S1 filing, as “a global platform for public self-expression and conversation in real time…unique in its simplicity… public, real-time, conversational, and distributed.” If you unpack that narrative, it’s full of benefits for the users. It connects with you. It empowers you. It’s about you (the user), not them (the company).
So, what other startups and up and coming companies have great narratives?
I haven’t gone to the length of extracting their particular narratives, but these companies strike me as having strong narratives that fit the (stringent) criteria laid out by John Hagel.
AirBnB . Kickstarter . Tesla . Dropbox . Foursquare
These companies engender leverage, distributed innovation, attraction, and relationship. These aren’t product features. These are powerful benefits that come out when you use their product. Coincidentally, there is a BIG idea behind each one of them.
Also, these companies capture our imagination, and make us do things we didn’t or couldn’t do before, each in their own way.
If you are a startup, what is your narrative? Is it powerful? Does it capture the imagination of your users, or does it have the potential to? Does it produce leverage, distributed innovation, attraction, and relationship?
If you’re an investor looking at a startup, you’ve probably played in your mind this question “Does this company have a higher purpose that goes beyond having a great product.?” That’s when you start to think about billion dollar markets, of course. You know in your mind if a company has the potential of becoming a breakaway. The narrative test might be a good test to run against it. Imagine it, and see if it will stick.
What do you think of applying the concept of narratives to startups? Is it possible that a small startup could posses a strong narrative, or is the narrative acquired over time, as the company matures and spreads their footprint further?
That was complicated.
Great article. Caught it on the HBR blog a while back. The narrative is essential to the start up, a defining of the vision both inside and the beyond the enterprise’s walls. I think it is essential for start ups as you articulate so well.
The problem with many startups is their narratives are focused on them and the product features as opposed to how their products benefit consumers. I’m always puzzled why startups struggle with this difference because it seems so obvious that meeting the needs of consumers is the fundamental goal.
I suspect part of the problem is startups are so intently focused on what they’re doing, they don’t spend enough time understanding target audiences and what they need. How many startups, for example, have never talked to potential or existing customers? I wouldn’t suspects lots and lots and lots.
As someone who helps startups create stories, I tell you it can be a battle and a challenge to get them to accept a new approach to how they talk about their products to the world. Once you get them to a new way of thinking, however, it is interesting to see how dramatically their perspective changes.
Another good post, William!
Yup. It is powerful when that happens.
Thanks Mark. I agree that’s it’s not always easy to do that, but when the narratives start to flow well, then the magic happens.
William – Yet another thought inspiring post.
Startups often engage in a bigger ecosystem or marketplace, where the narrative is clear, but tend to focus on “doing”
They then often enable some capability. A big mistake is to start with “look what we can do”
The implicit question is, “what could you do with what we can do in bigger context”.
Narrative develops with imagination, so perhaps a useful question, where startups must fill the blanks, is:
Imagine how (benefit) with (capability) you could change your life in the realm of (narrative), for example x at client (credibility) succeeded (story)?
Lets substitute for Twitter
(benefit) – you would stay in touch
(capability) – tool to get terse, informative references
(narrative) – where the whole world needs to tap into fast moving information
(credibility) – Anne at corp X,
(story) by mobilising a rapid response team in 20 seconds when she witnessed natural disaster X
For our startup
(benefit) – you would stay on top of energy management
(capability) – with distilled actionable insights
(narrative) – where the whole world needs to process the firehose of data from smartmeters
(credibility) – Energy Manager at Big Corp,
(story) cut response time to two days from one month when people leave heating enabled overnight saving X gazillion kilowatt-hours for a win of Y dollars and carbon reduction of Z tonnes, which lead to her early promotion
The result is that product vision starts forming tangible benefit in the imagination.
I spent two decades in the large Wall Street Wealth Management environment. I am in start up land, year three, traction year in my business. Moved from San Francisco to South Florida. Independant migration has been the trend as I am sure you know. Your blog is truly quite helpful. I have interacted before with you on AVC.
Indeed. When your product transforms something inside the customer and they talk about that, instead of the product itself, then you’ve got the start of something. Thanks for stopping by again.
Who could say no to a free education ?
Thanks. We should connect! I’m wmougayar AT gmail.
Will do. On the priority list. Thanks!
Lots to think on here…thanks for sharing.
🙂 It prob applies further into the life of a startup, but it gives you some things to think about.