Monday, May 09, 2016
Startup Archetypes: what you’re trying to accomplish shapes your story
A compelling story is the most important element of your pitch to investors. Just like fictional stories, startup stories often fall into broad archetypal categories. These categories clarify your startup’s purpose to investors, customers, potential employees and other stakeholders.
Here are six of the most common startup characters and stories. Where does your start-up fit?
This is probably the most popular startup story. Disruptors seek to totally change industries. They do so by creating completely new business models to solve old problems.
Uber and Lyft are well known examples. Using the model of the “sharing economy,” they have turned the transportation industry on its ear by providing a unique solution to the age-old problem of getting from point A to point B. We worked with a company that was seeking funding to introduce a shopping app designed to “kill” the online shopping cart by enabling shoppers to upload a photo, send a message, or use their voice to find any good that could be bought online, for the very best price available — using human shopping assistants. In this case, we sought in our storytelling to demonstrate how disjointed and unsatisfying the currently online shopping experience is for most consumers to make a case for the need for disruption by this human shopping assistant app.
But not every startup is a disruptor, many jokes and memes to the contrary.
2. The Founder:
Many serial entrepreneurs with successful exits or with “brand names” in their industry come to us for assistance with their pitches. Investors are often attracted to these startups because the founder has a proven track record or name recognition. Jack Dorsey, who founded Twitter and went on to start Square, is a great example of the Founder as story archetype.
When we work on this type of pitch, the founder’s resume, experience, and brand name can seemingly give them instant credibility in ensuring the sustainability or fundability of a startup. We recently worked on a pitch for a new app that uses a person’s online behaviors, attitudes, and purchase history to recommend live event experiences wherever they happen to be in the moment. This particular company featured founders from a well-known music discovery company that’s getting lots of attention, so we led the storytelling with an introduction to this founder.
Demonstrating that the new company was founded by someone who has done something similar in another relevant industry (in this case – a close relationship between music and events, using a similar algorithm) can de-risk the investment for investors. With this particular entrepreneur’s brand name and industry track record, we positioned an introduction to him at the very beginning of the pitch to say, “Here’s another hit from this well-known guy who created this well-known, highly capitalized company you already know…”
3. The Dream Team:
The focus of a pitch based upon the Dream Team is to demonstrate the complimentary nature of the founders’ skill sets and experiences. Basically, the storytelling angle here is “this is the ONLY team that could ever bring this idea to market.”
We recently worked with a media company raising money to stream every soccer game from every team across the world, around the clock, to set top boxes and computers. The company was founded by someone from FIFA, another person with a background in digital media, and a person with a proven track record in international sales.
In telling this story, we focused on the fact that other companies have tried this and failed, because they didn’t have the team it will take to make it succeed.
The legendary “Paypal Mafia” of Elon Musk, Peter Thiel and others is perhaps the best known example of the Dream Team archetype.
4. The Detective:
Some companies have the goal of solving complex and mysterious business processes and answer vexing business questions, usually using data.
We recently worked with an online marketplace for consumers to be able to plan and purchase everything they could possibly need to make their outdoor dreams come true. Through gathering and assembling user data, they will be able to increase the outdoor equipment/experiences sellers’ abilities to accelerate the sales cycle by following up on more highly qualified sales leads.
This is a trending archetype, with so many startups using data as the key to unlocking a mystery.
5. The Emancipator:
The Emancipator is often called the Democratizer. These startups are trying to make an existing process easier or more fun.
An investor pitch client we worked with early on in our InvestorPitches.com business was in the gaming industry. Addressing the problem that 136 million hardcore gamers didn’t have an online home for connecting, sharing, and posting about the games they love (e.g. Facebook, Twitter, and LinkedIn certainly aren’t for this!) his company built and marketed an online social platform designed to let gamers live their gamer lives online. This company’s online platform basically gave gamers the freedom to express themselves to other gamers and connect with others based upon their love of their games. We fashioned this story by first demonstrating that hardcore gamers were shackled by their inability to share and post about their gaming lives on mainstream social media. We demonstrated first why this was a problem, and then illustrated how having an online home for living their “gamer lives” would solve the problem.
Instacart has an Emancipator story. By removing many of the inconveniences of grocery shopping, they free their customers up to take care of other things in their lives.
6. The Perfect World:
Many entrepreneurs and companies set out to make the world a better place. These companies often focus on what he world looks like when a massive problem is solved.
Startup founders that identify as social enterpreneurs fall into this category.
We recently worked with a company that’s building a massive online marketplace to help consumers gain access to solar power technologies designed to not only save them money on residential power but to also create opportunities for manufacturers, providers, and service vendors in the solar industry — all with the goal of reducing our reliance on non-renewable forms of energy.
In telling the story of this company, we focused the beginning of the pitch on telling the story of the economic and environmental downsides of non-renewable forms of energy and followed it up with a vision for what the world would look like with more solar power. Then we told the rest of the story, demonstrating how solving this problem for the WORLD would bring value to both consumers and the solar industry.
Khan Academy and everything associated with Ted Talks are examples of stories about “doing good.”
Use your archetype to guide your story and attract investors
Identify what type of story you’re telling so you can make your pitch more interesting, more memorable – and more likely to spark the interest of investors. As a great philosopher once said, “They can’t invest in you if they can’t remember you.”
Posted by Investor Pitches at 1:59 PM | Comments Off on Startup Archetypes: what you’re trying to accomplish shapes your story
Topics: Investor Pitches