Study: The One Most Important Skill Every Entrepreneur Needs to Know

 

An entrepreneur has to be a lot of things: determined, creative, sharp and innovative. But which skill is the most important for any entrepreneur? A study out of Penn State and Aalto University in Helsinki, Finland reveals that if there is one skill you should focus on, it’s storytelling.

Think about it. A master storyteller can sell anything. They can smooth talk their way into any situation, excite a bored audience, interest investors, and if they really wanted to, convince someone a piece of garbage is actually worth a fortune.

Let’s take a lesson from Steve Jobs, who according to Forbes is the “world’s greatest corporate storyteller.” The fact that everyone would hang on his every word and accept it as truth is partly responsible for the blind devotion stereotypical Apple consumers are known for. That, and his genius ability to create usable pieces of technological art ahead of his time.

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But presentation is just a small part of entrepreneurial storytelling, as the study reveals. Here are a few other crucial aspects to storytelling that most entrepreneurs have never considered.

Storytelling makes an entrepreneur more legitimate.

It goes back to the point about selling, but there is an actual science behind entrepreneurial storytelling. According to the study, previous research shows that telling a story plays a key factor in making you look more legitimate to stakeholders. A good story describes a vivid future of several possibilities that are widely expected, but most importantly sets an exciting expectation for your company. The study can’t stress enough the importance of communication in this process.

Having a great product alone is one thing, but if you can map out a future to stakeholders where your product has uses beyond the obvious based on things you expect to happen, you basically gain the power of foresight.

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Storytelling always gives you a plan when you fail.

Okay, sometimes things don’t always go as planned. Entrepreneurs fail all the time and it makes them feel like shit … until they remember they have two things that can get them out of any bad situation — a plan and a skill. You’ve already vividly mapped out the future of your business, now you just have to tweak it.

“ … ventures are likely to confront many unforeseeable obstacles as their entrepreneurial journeys unfold. Consequently, entrepreneurs must constantly formulate, revise, and communicate expectations in order to respond to and actively prevent loss of legitimacy in the eyes of various stakeholders, or to regain it if it is lost.”

When you hit a wall, and ALL ventures hit walls, you don’t stay wrecked, you just go around them. Failure is just another word for a new story. A venture’s story can and must always be updated.

You win back stakeholders by “pivoting.”

So you’ve experienced a few setbacks and maybe your stakeholders are getting worried, so you hit them with your new story to sell them like last time. But what can you possibly tell them this time? Your company didn’t fail — circumstances have just changed, so you “pivot” your company, as the study suggests.

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“ … the perspective we have outlined here suggests a mid-ground, one where entrepreneurs ‘pivot’ (Ries, 2011) to rearrange a venture’s resource and institutional capital through revised storytelling.”

How do you pivot? It’s all just marketing, and chances are you’ve seen it everywhere in society. Take firms that specialize in artificial intelligence, for example. Either because of setbacks or fear of robots destroying humanity, the AI industry is like a roller coaster — when stakeholders get cold feet, it’s time to rebrand things. The study found that:

“Subsequently, ventures stopped identifying themselves with the label ‘artificial intelligence.’ However, they continued exploiting the technologies they had developed, but now used new terms such as ‘expert systems.’ ”

If the study proves anything, nearly all things can be accomplished with the use of storytelling. It sets a solid, failure-resistant plan for the company’s future, but it’s the kind of plan that investors, customers and employees love to hear. Anyone who can really sell that story is going to be a huge deal one day.

So if you are putting together a startup team and you already have your engineers, you know it’s time to find a damn good storyteller.

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