One such Power of B, as in B for Building a Story, that start-middle-end of a telling that evokes the desired response from the listener, is clearly of the utmost importance for an entrepreneur. If you are not totally convinced, I am sure Kirby Ferguson’srecently added piece on the Future of Storytelling with Paul Zak (scroll to the bottom of the page for the second clip), will make you think twice. The clip is evocative and telling… and highlights how essential the structure of a story is to the art of story telling. The clip revisits Gustav Freytag’s Dramatic Arc of narrative, beginning with exposition (or background), then rising action, climax, falling action and denouement (French for final action). It builds on this Dramatic Arc as the essential framework which makes for powerful storytelling. Freytag’s anti-semitic leanings aside, he clearly tapped into something that neuroscience is beginning to be able to explain today, ergo: That we are somehow wired to hear out a story when a certain dramatic sequence is followed.
True for the entrepreneurial pitch in much the same way: First, exposition, or some back ground to lay the foundation of the story –what you do, the team with the qualifications to pull it off; then rising action, the need or pain in the market, the incredible opportunity based on research done and minimal viable product tested; then climax, the solution and secret sauce to make it work and why this is going to be a game changer; then falling action, who and what is already out there, how the problem is being solved today, competitive landscape, differentiation; and then the dramatic conclusion, or denouement, the business model and how this idea, once executed by your team, will tap into this amazing opportunity in the market, make loads of money and change the world.
Undoubtedly powerful, but not the only Power of B. Speaking of Business Model, that other Power of B, of no less importance, and arguably without it, there is no story to tell… is the power of the business model. Often ignored, or offered as a laundry list, a generic slide that could work for any venture…the business model is in my view the essence of the whole thing. It does not mean the business model will work from day one, it does not mean it will not change as reality kicks in when a venture gets off the ground and runs inadvertently into its actual users, it does not mean it is full proof; but from my experience, when you consider the business end of your business and it doesn’t make sense (or ‘cents’ and many of them), there will be fundamental problems with the viability of the venture that no amount of story telling will be able to overcome in the end. I don’t just mean revenue model. One of our Zellumni, Dror Cederrecently shared with me a page from hackpad.com, the ‘smart collaborative documents’ site. I found the collaborative page, started and moderated by Fred Wilson on Web and Mobile Revenue Models,truly instructive and thorough. Great place to get analog ideas for different web revenue models. But I don’t mean only that. Those are more the means to the end, rather the essence of that end. Though sometimes confused, raising money is not a business model either… I mean the business reasoning behind the idea of the venture in the first place, the synergy or combination of need, solution, opportunity with an underlying economic rationale, that if it works, will yield an optimal use of resources for optimal economic benefit (ideally happy customers, fairly compensated employees, a good rate of return for investors, economic reward for founders).
I’ll give an example, removed from time and place, but the analogy is clear: I recently got an informational booklet circulated by our village municipality in honor of the 80 year anniversary of the founding of Ramot Hashavim.The circular includes minutes of meetings from the first board meetings and other related documents, like the call to action published by the founders of the village to enlist investors and the first settlers to the village (users and investors all in one). Translated from the German, the documents include the underlying business model for the whole endeavor. There were many villages founded at the time, but the founders clearly found a business model with differentiation: The founders learned that 100 million eggs were being imported per annum, consumed almost entirely by the then Jewish population at the time of 600,000 persons. The local supply produced only 1% of the demand. Eureka! an economic opportunity and one that solves a real problem for the German immigrant population arriving in Palestine…the ensuing business model was as follows: German immigrants to Israel at the time were professionals and merchants, unfit for most agricultural work, but in need of homes and occupations; raising chickens was agricultural work with relatively little need for training and physical ability; there was a growing population of egg consumers and very mitigated local supply of a product with limited shelf life and relatively high fragility…in a nutshell (or eggshell rather), the underpinnings of a successful entrepreneurial venture.
As the circular notes though, with the first egg came the problem of how to market it…which leads to a whole other topic and a separate issue beyond the Powers that B, which I could call the Power of D (as in distribution… and go-to-market)…