In a Financial Times article earlier this year, Luke Johnson discussed the importance of storytelling for an entrepreneur. In his experience, people undertaking ventures often focus on obvious traits such as intelligence or willpower. But this focus on such traits overlooks the fact that people’s decisions are heavily influenced by emotions. An entrepreneur making a pitch to investors for startup funding can show them informative spreadsheets, annual statements, and PowerPoint presentations, but people relate better to someone with a well-crafted, inspiring story. Investors often feel more comfortable with entrepreneurs who seek funding if they can hear tales that make them feel closer to the entrepreneurs and let them know what makes the entrepreneurs “tick.”
Johnson points out that those entrepreneurs who overlook the importance of storytelling can learn it by examining effective politicians. Politicians face skeptical voters and must strive to distinguish themselves from their rivals; these challenges are similar to those faced by entrepreneurs who must seek funding from sophisticated parties with other investment options. It is no accident that many prominent politicians over the last few decades- including Ronald Regan, Bill Clinton, and Barack Obama- had a gift of relating to their listeners and inspiring optimism in them.