Nail Your Startup Pitch: Use Pixar's Story Formula to Win Over Investors
A framework to make your pitch 10x more compelling in a few minutes
 |
đ Hello, Iâm Ashwin. Iâm a startup investor, founder, and software engineer. Iâve worked with hundreds of founders to help them craft the perfect pitch for fundraising. Iâll be writing articles like this weekly, so subscribe to stay in the loop!
As a startup founder, 90% of your job is storytelling.
Youâre telling your companyâs story all the time: when youâre fundraising, recruiting co-founders or employees, marketing to users, rallying your team, talking to the press, and communicating with your board. All these people are begging to hear a good story, one that inspires and moves them to act.
But most of us never learned how to tell great stories! Itâs the single highest leverage skill a founder can develop, and one that will elevate all aspects of the job.
Pitching = Storytelling
The most obvious arena where you tell stories is during fundraising. Given that you have some level of conviction about your company and why it should exist, your job during fundraising is to succinctly tell investors a compelling story of your startup, and why itâs a sufficiently good bet thatâs too promising to ignore.
We donât need to reinvent the wheel here! People have iterated on storytelling for eons, and we can shamelessly borrow those learnings to tell better stories. In fact, we can use a story formula from one of the worldâs best storytellers: Pixar.
The Pixar storytelling method
Pixar has been one of the most successful studios in the film industry, making movies grossing over $14 billion at the box office, and winning 23 Academy Awards.
How can one studio have so many straight hits? Pixar is famous for its rigorous and structured story creation process, and at the heart of every Pixar movie is a story so tightly sequenced and calculated that it consistently tugs at heartstrings worldwide.
Emma Coates from Pixar published a set of story guidelines, which includes a Story Spine (pictured above). This simple structure quickly conveys all the important pieces of a story: the initial conditions, inciting incident, resulting tension, and journey of the main character.
Applying the Pixar formula to your startup pitch
You can use that same structure to describe the most important points about your company in a radically short amount of words that are easy to understand and digest. Hereâs how the Story Spine maps to the essential components of a startup pitch:
1. âOnce upon a timeâ => The problem
These are the initial conditions of the world, regardless of your companyâs existence. Who are the people youâre helping (your customers) and what is the specific job they need to get done?
You could also mention trends happening in the world to set the context for your company. What economic forces, social behaviors, or technological progress have you noticed related to how this problem is being solved? What waves are you riding?
Deliver a strong insight here! Investors hear thousands of pitches from hundreds of domains. You know at least 10x as much as they do about your space, and the best pitches point out problems the investors might not have even known about, secrets that you know due to your unique background or experience.
đ Airbnb example
Traveling is growing at X% but booking a hotel is one of the biggest concerns for travelers.
đ° Coinbase example
Bitcoin usage is growing quickly among early adopters, but itâs complicated to buy and store it.
đ SpaceX example
As insurance against humanityâs existential risk, we need to develop rockets that can help us colonize Mars.
2. âAnd every dayâ => Why the current solutions suck
Here you want to explain how those people from step 1 are solving their problem right now:
Are there hacks theyâre using? Things theyâre piecing together to solve this problem since there isnât a good solution? Are there obvious incumbents in this space? Why donât they do a great job of solving the problem?
What are the biggest consequences of the current solutions? Time, money, energy? Complexity and headaches?
This point is setting up point 4 below, where youâll explain how your solution solves this problem so much better, so highlight the issues that current solutions have which directly correlate to your solutionâs primary value proposition.
đ Airbnb
Hotel booking is expensive and doesnât let you really experience living in a city.đ° Coinbase
The current tools are hard to piece together and limit Bitcoin adoption to engineers and hackers.đ SpaceX
Current rockets arenât powerful or affordable enough to get a critical mass of people to another planet.
3. âUntil one dayâ => Your solution
Now that youâve set up the customer, problem, current solutions, and why theyâre not good enough, you finally introduce your own solution.
The biggest mistake founders make here is using jargon, marketing speak, and ambiguous terms. Be specific and matter-of-fact. What is the exact solution youâre proposing? Is it an app? Hardware? A marketplace that connects two parties?
Itâs much better to be narrow and focused than broad and vague. Investors need an anchor of what your solution looks like so they can easily see why itâs better than what exists.
đ Airbnb
Weâre building a marketplace that lets travelers book rooms with local hosts.đ° Coinbase
Weâre making a hosted Bitcoin wallet.đ SpaceX
Weâre making rockets that are reusable and powerful enough to reliably get people to Mars.
4. âAnd because of thatâ => Why your solution is 10x better
Now that I know what your solution is, I need to know why itâs 10x better. What is the primary value proposition for your product?
Remember the âbiggest issue with current solutionsâ you brought up in step 2? The value proposition you present here needs to directly correlate with that big issue:
The current solutions are too expensive -> your solution is affordable
The current solutions are complex and for experts -> your solution simplifies the process
The current solutions are too slow -> your solution is much faster
đ Airbnb
This means travelers book cheaper accomodations, and hosts can make money off their spare rooms.đ° Coinbase
It makes it simple for ANYONE to buy, sell, and store their Bitcoin just by connecting their bank account.đ SpaceX
Since our rockets are reusable, we drastically reduce the cost of launch, and weâll use our launches to develop rockets powerful enough to transport humans to Mars.
5. âAnd because of thatâ => Your traction
Now I know what your solution is and why itâs so much better. Letâs see the proof that you might be right. Do you have any traction with your product?
Traction can mean a lot of things, depending on your stage and industry. You have to show where you are on the ladder of proof, and especially how fast youâre growing.
If you havenât launched your product, you can talk about why youâre so confident in your solution: clear interest from big-name customers, deep and relevant customer interviews, or a large waiting list.
đ Airbnb
Weâve already had X bookings on the platform, and weâre growing at X% each month.đ° Coinbase
Thatâs why our user base has been growing at X% monthly, and weâre managing over $B in Bitcoin already.đ SpaceX
Our first step is making revenue by using our initial rockets to deliver satellites to orbit for paying customers. Weâve already booked $B in launches since we started.
6. âUntil finallyâ => The market youâre capturing
If youâre solving a real problem for desperate customers in a way that is so much better than what exists out there, and youâre proving it out with your traction, seal the deal by telling me how big this can get.
Due to the economics of early-stage startup investing, investors need to invest in companies that can become massively valuable. You want to take a bottomâs up approach: the amount you can charge each customer multiplied by how many customers fit into your market.
If the pitch up to this point is concise, you can add in a quick line here about any adjacent markets you can get into after your current one, and how big those markets are too.
đ Airbnb
With the % fee we take on each transaction and _ million trips each year that would make sense to use our product for, weâre looking into a $_B market.đ° Coinbase
With the Bitcoin market at $B and % of new Bitcoin buyers fitting into our user profile, weâre going after a market worth $B.đ SpaceX
The commercial satellite launch industry is $B but we expect our lower cost of launch to grow it to $B in the next 10 years.
More Examples
Here are a few examples of other companies and how they might use this way of telling their story. Note that these are just one way of telling their story and that this structure can apply to any company in any space.
Fix your story and win
Just like Pixar, you wonât nail the story with the very first version. The best approach here is to try out one version of this story, see what works, and iterate.
One good approach is to use the email test: write up a version of the story in an email and send it to a few people that you know and trust to give good feedback. Ask them to reply back with some answers to see if that story sticks, and iterate based on whatever clarifying questions they have.
đ¨ Hereâs an email template to use:
Subject: Feedback on my startup elevator pitch
Hi ____,
Iâm trying to get my startup elevator pitch to be as compelling as possible. Hereâs what I have right now. Could you take a quick read and reply back with answers to some of the questions I have below the pitch? I really appreciate it!
[insert the story based on the Pixar template here]
Based on this, could you tell me:
1. Who my target customer is and what problem Iâm solving for them?
2. Why the current solutions arenât great?
3. What makes my product so much better?
4. If thereâs anything unclear about what Iâm building and why?
Thanks so much,
[your name]
Feel free to email me your pitch with this template and Iâll give you some feedback.
Super helpful. Can't wait to see more!
Awesome writeup. I feel there is some resemblance between the STAR approach and Pixar's story-telling formula. It's just that Pixar's methodology is more compelling and informal while STAR framework is a formal.