Storytelling is the key to winning entrepreneur pitches because professional investors like Barbara Corcoran and Robert Herjavec are moved by them.
“Storytelling is everything,” Shark Tank investor Barbara Corcoran once said. “Show me an MBA and your sales numbers, that’s fine. But tell me a great story about how you got started and your vision, and we’ll talk.”
In the first episode of Season 8 of ABC’s hit show Shark Tank, two sisters–Kara Haught and Shelly Hyde–pitched a line of swimsuits made for women and mothers like themselves. The sisters were seeking $100,000 for a 20% stake in their company, Raising Wild.
Corcoran was intrigued, but unconvinced. The sisters’ lack of business experience was an obstacle.
“Every entrepreneur that comes into the tank is loaded with passion. It’s never really enough,” said Corcoran. “Is there anything you can point to in your past that would help me feel as though you have accomplished something in the business world, even a small thing, a personal journey that you have seen through to the finish line?”
Barbara Corcoran was looking for a great story.
Haught started crying as she said, “I have a son who was diagnosed with ADHD. He was given a reading and a writing disability. They told us it would be years before he would be at grade level, and that we should hold him back. But we spent all of our extra time after school helping him…. This year at the end of the school year, he was reading above his grade level. The second-highest-scoring kid in his math class. I don’t have a business background, but I can work harder than any person doing that.”
After Haught finished her story, something interesting happened. It prompted Corcoran to respond with a story of her own:
“You could not have hit on a better story. When I go home at night after I finish my workday, I spend at least an hour and a half with my daughter, Kate, who is 10, who has ADHD. She also has a processing disorder. But what I have is a little girl with the confidence to the moon because she has a mother who is totally behind her.”
Corcoran said that “sticking with it” and “seeing it through,” as Haught has, is a major accomplishment. And that a mother who did so should not be underestimated. Haught and Hyde got their investment–and a new partner in Barbara Corcoran, who put in $100,000 for a 50 percent stake in the business.
Storytelling is key to winning ‘Shark Tank’ pitches.
Corcoran isn’t the only investor on Shark Tank who is moved by stories. According to one analysis of 495 pitches, 30 percent of successful Shark Tank pitches included “a captivating narrative.” The researchers defined narrative as “an experience or personal anecdote told by the entrepreneur.”
Professors Melanie Green and Timothy Brock study the role that “transportation theory” plays in persuading people to change their beliefs. When people are absorbed in a story it impacts the beliefs they hold. The more emotionally involved they are with the characters, the more empathy they feel for the hero and the more likely they are to buy into the hero’s view. “Highly transported individuals may have a greater affinity for story characters and thus may be more likely to be swayed by the feelings or beliefs expressed by those characters,” according to Green and Brock’s research.
Transportation theory explains why Corcoran, her Shark Tank peers, and many other professional investors are often moved by stories. According to social-science and psychology researchers, we think in stories, we like to hear stories, and we are wired to see ourselves in another person’s stories. Stories of human suffering and overcoming obstacles are irresistible because adversity is a part of life. They motivate us and bring out our best efforts.
A robot’s backstory wins over a ‘Shark Tank’ investor.
An emotional pitch once prompted Shark Tank investor Robert Herjavec to recall his own struggle. Two entrepreneurs pitched a toy appropriately named Trobo, the storytelling robot.
Inventor Chris Harden concluded his pitch by saying: “You’re looking at a guy who was a kid on welfare. I was one of three children to a mom. My father died when I was 6 years old. She had alcohol problems, she ended up going to prison. I learned a very valuable lesson from my mom. She told me if I could stick to my education day in and day out, I could get out from that. And I have.”
The story prompted Herjavec to recite his own personal narrative. Herjavec said he dropped out of university in his first year. He recalled his father’s disappointment because nobody in the family had ever gone past high school. His father gave him a tough-love pep talk and Herjavec returned to school. He backed Trobo for $166,000.
Storytelling is irresistible because it’s in our DNA. We are wired for stories. An emotional, authentic, and compelling story can help you win over any audience, even a panel of battle-tested sharks.