The Importance of Storytelling

This is the Chapter 7 of my e-book Silicon Valley for Foreigners, that can be downloaded for free on or purchased for $2.99 on the iBookStore and Kindle. A new chapter will be posted on this blog every week.


Raymond Chandler, the late American novelist and screenwriter, once said that a good story cannot be devised; it has to be distilled. Sixty years after his death, the advice seems to be followed by many Silicon Valley startups.

Storytelling is one of those things that we relate to Hollywood or great authors but, as I have learned from Silicon Valley, the capacity of telling a good story is a must have trait for aspiring entrepreneurs. The reasons are manifold.

First and foremost, being able to tell a good story is a talent that just a few entrepreneurs have. It involves many abilities such as prioritizing the most impactful and important pieces, understanding your target audience well, expressing yourself concisely, and using imagination and charisma to get the attention of people who have never heard about you or your company.

Second, good stories create an emotional connection with people. Everyone loves a hero’s journey, the common template that involves a hero who goes on an adventure, faces many crises, is able to win, and then comes home changed or transformed. I would argue that entrepreneurs, contrary to fictional characters, are the true heroes due to the real struggles they face.

Emotional stories tend to get more attention from media outlets and are more likely to go viral on social networks, helping startups to lower their customer acquisition costs.

One great example is Elon Musk’s struggles in 2008, where his companies were falling apart. Against all odds, he figured out a way to make a comeback in the most spectacular fashion, creating world-changing companies (Tesla, SpaceX, Solar City, Neuralink, OpenAI, The Boring company) and becoming the most revered entrepreneur of the XXI century.

Third, in a world where people have limited time and attention spam, a good story will always help entrepreneurs to stand out and be remembered. For instance, if a venture capitalist, on average, hears a hundred pitches a year, he or she will probably recall the ones that were unique and able to get their attention until the end.

Last but not least, the entrepreneurs who are able to galvanize customers’ trust and sense of purpose create a huge differentiator against competitors. In mature markets, any given category is inundated by commoditized products whose only differentiator is pricing. Customers may choose the company with the better story or purpose behind it.

One good example is Sprig, a food delivery startup in which the main differentiator is to serve organic and balanced meals with the best ingredients they can find (preferably from local farms). Sprig competes in a commoditized category that has seen many startups shutting down in the last years. Sprig is still alive due to the great positioning that it is selling health and not food.

Storytelling works and fits perfectly in a culture built on trust and based on reputation. In Silicon Valley, the ecosystem believes in entrepreneurs until proven otherwise. If you lie and someone finds out later, you lose all your credibility.

Of course, it is well-known in startup circles that most entrepreneurs exaggerate when pitching their companies. It is OK if they are overly optimistic, miss some deadlines, but are able to deliver on their promises later. Lying or cheating is not OK and must not be tolerated by serious ecosystems. Real entrepreneurs always rely on facts, evidence, and flawless execution to back up their stories.

Sometimes, however, many Silicon Valley entrepreneurs try to cut corners and abuse this natural goodwill by telling fake or made-up stories about their accomplishments. Unfortunately, lies are becoming more common and, in the last couple of years, we have had high profile startups caught cheating and defrauding customers. More information about these cases in Chapter 23.

Despite its blunders, the Silicon Valley ecosystem became pretty good at telling stories and captivating the loyalty of billions of users. If done appropriately, storytelling can be a huge asset for any startup strategy and is a highly important skill to master. Sometimes, it is the only thing separating a successful company from a failed one.

The good news is that any brand building exercise is free, bound only by an entrepreneur’s imagination and charisma.