Why Your Startup’s Story Matters

I was recently invited to speak at the 4th MaGIC Academy Symposium on Disruptive Entrepreneurship. Staying true to the day’s theme of Growth and Opportunities, I spoke on the topic, ‘Why your Startup’s Story Matters. I wanted to highlight the importance of empathy in growth and marketing – how understanding the customer’s story helps us identify areas of improvement and growth. I wanted to share the slides and some key points I made to tell my own Startup’s story.

There is a big difference between story and story-telling. ‘Telling’ implies that there is a giver and a taker. Telling is pedantic and rather transactional – it shuts down true communication. Modern effective communication is about engagement and resonance, and stories have the ability to create a special connection between people.

Story telling is reserved for the experts – it is a buzzword we hear in business and marketing to explain the ‘what’ and the ‘how’ of companies, where as stories explore the ‘why’. And every single person has a story to tell.

As marketers it is easy to get fumbled in the unit-economics game – to care more about growth than retention. While paid marketing tools are great at acquiring new customers, they often aren’t the best means of motivating customers to repeat usage. Additionally spending on ad campaigns to encourage customers to spend money on our product/services risks on-setting a zero-sum game.

Understanding what customers are looking for helps brands create customised services, one that talks specifically to what the customer is looking for. When a customer feels like they are in the centre of the brand’s attention – they feel special and heard, and are more likely to become loyal customers. In order to understand what customers truly need – companies need to speak to every single customer.

But that is neither pragmatic nor possible for most startups.

Alternatively, to induce repeat use we could build addictive products. As much as every founder would love to build products that elicit the same kind of responses as a recreational drug, the real question here is HOW do we build addictive apps.

There was a time when I thought I understood how this works. When I was a student of Neuroscience at Brown University, I was particularly interested in studying and researching human motivation – especially the changes that occurred in the human brain and its related structures when we perform certain tasks.

In an experiment where participants tinkered with a slot machine  – I found high concentration of dopamine and serotonin (the neurotransmitters released by the amygdala) in players who had a variation of wins and losses, rather than players who had all wins or all loses. This showed that the players who had a variation of outcomes were more likely to be more motivated to keep continuing the process.

Another example features an experiment with a switch connected to a food dispenser and a rat named Fernando. In it a food pellet was dispensed into the box every time Fernando pressed the switch. We found that Fernando pressed the switch just enough times till he satisfied his hunger. In another session, where we varied the types and amount of food, we observed very quickly that there was a pile of food accumulating in the box as Fernando kept pressing the switch incessantly. At this point even though he was no longer hunger, he was curious to know what new reward came next.

This behaviour touches on the principle of variation of rewards – a term coined in 1948 by a Harvard Psychologist, B.F Skinner. And it explains how once human beings satisfy their primary needs, no amount of rewards will be big enough to encourage people to carry out a routined task if it did not add an element of delight and surprise.

Along the same vein, if there is a genuine need for a product in the market today – you can rest assured that you will find users. The bigger question here is how do you keep users coming back to you once you have serviced their needs. How do you make your product delightful? How do you incorporate a variation of rewards?

Nir Eyal touches upon this subject matter in his book, Hooked. He highlights how some of today’s most popular digital products (e.g Facebook, Snapchat, Tinder) tap into a basic human need for acceptance, adoration and connection. Every time we log onto these platforms, we want to know if someone has liked a photo, matched with us, or left a funny comment – that is why we keep hitting the red button, we keep scrolling down, we keep swiping right.

Another way to understanding what the customer needs, is by putting ourselves in the shoes of the customer. The Thought Leadership team at The Economist segments their work by first identifying who the readers are – and then work their way backwards to figure out the tone and language of the article based on the reader’s level of understanding for that particular subject matter. The focus was less on educating the reader on the ‘what’ and the ‘how’ of a subject matter, and more on the ‘why’ and how it could potentially affect the reader.

This idea of writing for the reader’s habits could be translated into any startup’s journey by designing for the user’s habits (rather than ‘disrupting’ how things are already done). Just as founders are constantly engrossed in their own origin story, users too, only care about their own customer journey, and ultimately determine what the company or the product stands for.

Apple is a prime example of a company that taps into this notion of ‘speaking the customer’s language’ and enveloping themselves within the customer journey. In their message to customers, they focus on specific customer experiences and highlight how their products can enhance that, rather than changing the course of the customer’s routine or specifying the details of what it does and how it works.

But that’s not enough – sometimes we need to nudge the customer slightly to get them to tip off the edge of the cliff. Building addictive products that cater to human motivation, and aligning with the customer’s lifestyle are great ways to place the product along the customer’s story – but ultimately we need to remind customers of our existence. External triggers in the form of push notifications and emails do a great job at prompting the customers.  Sticky interfaces such as micro animations are great psychological tools that keep the customer from logging off.

Our initial instinct when it comes to motivating people is always to persuade them – but it could be more effective if we helped make their behaviour easier.

When Netflix starts looping the next episode at the end of every episode – they understand that human motivation is high because people want to know what happens next – at the same time the difficulty of watching the next episode is low since it starts playing unless we actively stop it.

This makes people feel like they have superpowers – because suddenly brands seem to be reading their minds. That act of seamlessly incorporating a user experience around human motivation is a magical feeling. Think of Uber or Grab where the customer gets from point A to point B without exchanging cash with the driver – to pay without actually paying is a magical and addictive experience.

But ultimately human beings are a fickle sort and shy away from marketing stunts that appear in apparent (triggers like notifications) and unapparent (ease of use) ways. Ultimately we want to be able to justify why we buy the things we buy or do the things we do. And this innate need gives brands the opportunity to create a story around positive association. These can be based on a competitive advantage (e.g. Zappos on excellent customer service), social pressure (e.g. Snapchat users and positive social externality) or even something completely unrelated to the product (e.g Starbucks and it’s connotation as the 3rd place).

When we are uncertain we Google, when we are lonely we Facebook – these brands were not associated with these internal triggers from day 1 – it took years of trial and errors, and several customer stories for these companies to become a verb in their own right. Founder need to take a step back and really understand why they started, and speak to their first 100 customers to understand why they used the product. This can help create a story that matters to your startup.

Ultimately, people don’t buy what you do, they buy why you do it. Every single person I know wants to own a Tesla or wants to work there. This is because Tesla is not simply a automobile company, in fact it is not even a brand in the sense that every single for-profit company is a brand. Tesla is the mission of all missions – the mission to ween our planet off its addiction of fossil fuels and ensure that our grand children live in a sustainable society. When you combine a powerful story like that with a great product – you have true promise to appeal to customers.

While a massive part of marketing depends on hard data and empirical analysis – today’s customer’s crave personal connection. It is easy to get muffled in the unit-economics game, but the real race begins at the start of a customer’s story. Every single company is bigger than the product and the services they offer. We need to listen to what our customers are saying and really tap into a story that not only caters to what they want, but also services what they truly need.

 

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