Think Fast Talk Smart: Communication Techniques - 47. Quick Thinks: How to Use Storytelling to Be a Better Founder

Episode Date: December 14, 2021

“Great founders are great storytellers,” says Stanford Graduate School of Business professor Stephanos Zenios in this “Quick Thinks” episode. Zenios is the director of the Center for Entrepreneurial Studies and heads Startup Garage, a project-based course where teams design and test business concepts that address real-world problems. “Founders have to tell a story to their customer so that they can inspire them to test and use their new product. They have to tell a story to their employees to inspire them to take some risk. And then, they have to tell a story to investors and their board.” Connect:Premium Signup >>>> Think Fast Talk Smart PremiumEmail Questions & Feedback >>> [e-mail] Transcripts >>> Think Fast Talk Smart WebsiteNewsletter Signup + English Language Learning >>> FasterSmarter.ioThink Fast Talk Smart >>> LinkedIn,  Instagram, YouTubeMatt Abrahams >>> LinkedIn ********Thank you to our sponsors.  These partnerships support the ongoing production of the podcast, allowing us to bring it to you at no cost.Strawberry.me. Get 50% off your first coaching session today at Strawberry.me/smartJoin our Think Fast Talk Smart Learning Community and become the communicator you want to be. 

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This is not therapy. It's not consulting. It's a thought partnership designed to help you take action with more clarity and purpose. I strongly believe in the value of coaching. All of us can benefit from the help of a coach. Visit strawberry.comme slash smart to get matched up with your coach today. That's strawberry.me slash smart and get 50% off your first coaching session. It's the most affordable time ever to see if coaching is right for you. Hello, I'm Matt Abraham's and welcome to a special quick think's episode of Think Fast, Talk Smart, the podcast. Our recent episode on entrepreneurship received such positive feedback, not just from Think Fast Talk Smart listeners, but also from listeners of the GSB's Grit and Growth podcast, that we wanted to share

even more from my interview with Stephanos Zenios, who is not only a GSB professor, but also the faculty director of the Center for Entrepreneurial Studies and the main architect of the GSB's startup garage program. Enjoy this quick-thinks episode where Stephanos describes the steps involved in bringing a successful entrepreneurial venture into being. So we begin with the premise that I explained earlier that a new venture is a set of hypotheses. And every founder and every founding team needs to do two things. Formulate those hypotheses and then test them with real data. It's only then when you can go to investors and can credibly seek funding.

So we structure the course around two methodologies. One is design thinking that has been introduced by my colleagues here at the design school, and the other one is a lean startup. And what we recognize is that you need the design thinking methodology to help you formulate your hypothesis. And then you need the lead startup methodology to test the hypothesis. So first of all, what is a hypothesis for a new venture? A hypothesis for a new venture is who is your customer? What is the pain point you're going to solve?

How are you going to solve it? What is your solution? How are you going to go to the market? And how are you going to make money? So you need to be able to answer those five questions. So first, you need to come up with a hypothesis of what your answers to those five questions are. So we begin by having our students immerse themselves in the environment of who they think their potential customer is going to be. We give them an assignment that lasts for four weeks.

Talk to as many future customers as possible. Ask them for what their pain points are. And then at the end of this four week period, come up with a summary description of who is your customer and what is the pain point that you want to address. And on a weekly basis, we ask our teams to tell us how many interviews they have done, but more importantly, what have they learned from those interviews?

At the end of the four-week period, the students have an answer to the question, who is the potential customer and what is the problem they have? Then we teach them how to use brainstorming to generate alternative ways of addressing that problem, to develop low-resolution prototypes that they bring back to their customer and get feedback, but also to develop the business model for the venture, how you will make money. What is your go-to-market strategy? For that, we use a widely popular tool called the business model canvas. We also asked them at that point to come up with an estimate of what is the total market size

and to figure out whether the market is big enough to justify the capital necessary to build a venture. By the end of the four quarter, this is a two-quarter class, by the end of the four quarter, the teams are ready to make a presentation in which, which we ask them to answer the following question. Have you found a need that is worth addressing? And do you see a viable path forward? Do you believe you can build a venture around solving that need? The teams that decide to continue winter quarter,

the winter quarter, they end up designing experiments, experiments for their go-to-market strategy, experiments for their unit economics, experiments for product market fit. We asked them to develop minimum viable products and test them with customers and get feedback and iterate based on that feedback. We also teach them how to evaluate term sheets

that they would get from early stage investors. And then finally, we prepare them for a pitch presentation that they would give in front of investors. And we give them, some of the nuts and bolts of how you pitch in front of investors. But more importantly, we tell them that what they did fall and winter quarter was gathering the evidence to put together the story that they would share with investors. And that brings them to the end of the quarter with an investor pitch in front of a group of investors. Wow.

So everybody, you just heard in a few minutes what takes two academic quarters to get to launch a new venture. I find it really interesting and should resonate with people who listen to this podcast frequently that a lot of time, a lot of time in your model is spent really understanding the potential customer. And we talk a lot here in communication that it's critical to really understand who your audience is. And so it's nice to see that that's super important in launching a new venture. And I liked how you ended as well with something that we often talk about, which is you have to be able to tell a good story. It's not just to have the evidence, but you're not just to have the evidence. You have to put that evidence and do a good story.

Yeah. Great founders are great storytellers. They have to tell different stories. They have to tell a story to their customer so that they can inspire them to test and use their new product. They have to tell a story to their employees to inspire them to take some risk. And then they have to tell a story to investors and they are bored. And what I found from my experience teaching startup garage is the closer you can get to your customer, the deeper you can understand your customer.

And the more authentic as an entrepreneur you are about addressing the need, the more compelling your store is going to be, both for customers, investors, and employees. So that relevance can really help make it resonate. Thank you. Thanks for joining us for another episode of Think Fast Talk Smart, the podcast. For more information in episodes, visit gsb.stamford.edu. Thanks for joining me for this quick thanks episode. If these takeaways were helpful, I'd love for you to listen to the full episode that started this conversation.

There's more context, more stories, and more tools to support your communication. Give it a listen. And as always, thanks for your support. Before we wrap up, I just want to say thank you for listening. It really means a lot to hear how people all over the world are using these ideas in their own lives. It inspires me and the whole team that brings you this show. If you want more episodes and resources, feel free to follow, subscribe, and explore past conversations. We're grateful for your support of Think Fast Talk Smart.