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
👋 Hello, I’m Ashwin. I’m a startup investor, founder, and software engineer. I’ve worked with hundreds of founders to help them craft the perfect pitch for fundraising. I’ll be writing articles like this weekly, so subscribe to stay in the loop!
As a startup founder, 90% of your job is storytelling.
You’re telling your company’s story all the time: when you’re 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! It’s 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 it’s a sufficiently good bet that’s too promising to ignore.
We don’t 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 world’s 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. Here’s how the Story Spine maps to the essential components of a startup pitch:
1. “Once upon a time” => The problem
These are the initial conditions of the world, regardless of your company’s existence. Who are the people you’re 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.
🏠 Airbnb example
Traveling is growing at X% but booking a hotel is one of the biggest concerns for travelers.
💰 Coinbase example
Bitcoin usage is growing quickly among early adopters, but it’s complicated to buy and store it.
🚀 SpaceX example
As insurance against humanity’s existential risk, we need to develop rockets that can help us colonize Mars.
2. “And every day” => 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 they’re using? Things they’re piecing together to solve this problem since there isn’t a good solution? Are there obvious incumbents in this space? Why don’t 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 you’ll explain how your solution solves this problem so much better, so highlight the issues that current solutions have which directly correlate to your solution’s primary value proposition.
Hotel booking is expensive and doesn’t let you really experience living in a city.
The current tools are hard to piece together and limit Bitcoin adoption to engineers and hackers.
Current rockets aren’t powerful or affordable enough to get a critical mass of people to another planet.
3. “Until one day” => Your solution
Now that you’ve set up the customer, problem, current solutions, and why they’re 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 you’re proposing? Is it an app? Hardware? A marketplace that connects two parties?
It’s 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 it’s better than what exists.
We’re building a marketplace that lets travelers book rooms with local hosts.
We’re making a hosted Bitcoin wallet.
We’re making rockets that are reusable and powerful enough to reliably get people to Mars.
4. “And because of that” => Why your solution is 10x better
Now that I know what your solution is, I need to know why it’s 10x better. What is the primary value proposition for your product?
Remember the “biggest issue with current solutions” 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
This means travelers book cheaper accomodations, and hosts can make money off their spare rooms.
It makes it simple for ANYONE to buy, sell, and store their Bitcoin just by connecting their bank account.
Since our rockets are reusable, we drastically reduce the cost of launch, and we’ll use our launches to develop rockets powerful enough to transport humans to Mars.
5. “And because of that” => Your traction
Now I know what your solution is and why it’s so much better. Let’s 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 you’re growing.
If you haven’t launched your product, you can talk about why you’re so confident in your solution: clear interest from big-name customers, deep and relevant customer interviews, or a large waiting list.
We’ve already had X bookings on the platform, and we’re growing at X% each month.
That’s why our user base has been growing at X% monthly, and we’re managing over $B in Bitcoin already.
Our first step is making revenue by using our initial rockets to deliver satellites to orbit for paying customers. We’ve already booked $B in launches since we started.
6. “Until finally” => The market you’re capturing
If you’re solving a real problem for desperate customers in a way that is so much better than what exists out there, and you’re 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 bottom’s 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.
With the % fee we take on each transaction and _ million trips each year that would make sense to use our product for, we’re looking into a $_B market.
With the Bitcoin market at $B and % of new Bitcoin buyers fitting into our user profile, we’re going after a market worth $B.
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.
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 won’t 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.
📨 Here’s an email template to use:
Subject: Feedback on my startup elevator pitch
I’m trying to get my startup elevator pitch to be as compelling as possible. Here’s 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 I’m solving for them?
2. Why the current solutions aren’t great?
3. What makes my product so much better?
4. If there’s anything unclear about what I’m building and why?
Thanks so much,
Feel free to email me your pitch with this template and I’ll give you some feedback.