Use Pixar's story formula to win over investors
&gt; As a startup founder, 90% of your job is storytelling.<p>How can we fix that?<p>To the extent that this is true, startup funding will go to the best storytellers, like Stephen King or John Lasseter (or, perhaps, Elizabeth Holmes), instead of the people working on the most important breakthrough technology they could most easily bring to market.  How could you run a VC firm that funds the best hackers instead of the best storytellers?  Or a company that works on the best ideas instead of the ones advocated by the best internal storytellers?  Or a trade publication that touts the best ideas instead of the ideas with the best storytellers?<p>One way to think of this is that storytelling is an attempt to hack investors&#x27; evaluation function; as pg says in <a href="http:&#x2F;&#x2F;www.paulgraham.com&#x2F;lesson.html" rel="nofollow">http:&#x2F;&#x2F;www.paulgraham.com&#x2F;lesson.html</a>:<p>&gt; <i>But wasting your time is not the worst thing the educational system does to you. The worst thing it does is to train you that the way to win is by hacking bad tests. This is a much subtler problem that I didn&#x27;t recognize until I saw it happening to other people.</i><p>&gt; <i>When I started advising startup founders at Y Combinator, especially young ones, I was puzzled by the way they always seemed to make things overcomplicated. How, they would ask, do you raise money? What&#x27;s the trick for making venture capitalists want to invest in you? The best way to make VCs want to invest in you, I would explain, is to actually be a good investment. Even if you could trick VCs into investing in a bad startup, you&#x27;d be tricking yourselves too. You&#x27;re investing time in the same company you&#x27;re asking them to invest money in. If it&#x27;s not a good investment, why are you even doing it?</i><p>Investors want to invest in the companies that will make the most money.  As Ashwin points out, the founders&#x27; storytelling ability is a component in making money, because it affects company morale and public relations, as well as future funding rounds.  But there are a lot of other components to making money, as Theranos found out.  If Ashwin is correct that 90% of a startup founder&#x27;s job is storytelling, then investors are vastly overvaluing storytelling ability when they make their investment decisions, and there should be a lot of startups out there with mediocre storytelling and genuinely great technology that investors could get exposure to for a much lower price.<p>The information asymmetry here is a real problem, though, because how do the investors find out about the great technology?  The people who are working on it have to tell them about it, and if they&#x27;re bad at communicating, it&#x27;s going to be hard to understand what they&#x27;re saying.  Maybe &quot;due diligence&quot; should start earlier on, with proactive due-diligence teams going out and scouting out ideas that could turn out to be big.  Linux Weekly News, of all things, is the closest approach to this I&#x27;ve seen in the real world.<p>Sounds pretty hard.  But better than investing in Theranos and passing on Dropbox.