The greatest story ever told
Moneyball is a fortnightly newsletter from Koble exploring the limitations of human decision-making and their implications for startup investing.
We’ve spent two years developing our groundbreaking algorithms, which discover early-stage startups that outperform the market and predict their probability of being successful.
This week
🧠 Mental model #7 – Storytelling – The greatest story ever told
📖 Investor reading – Do You Have a Failure Résumé? – 10x your productivity with ChatGPT – AI and the Big Five
💬 Some tweets – Web3 investors pivoting hard to being GPT3 investors – How dumb are the big investors? – Whatever happened to old school venture capital?
The greatest story ever told
Stories are everywhere. And they’re as old as the hills.
Margaret Atwood isn’t famous for investing in startups, but she knows a thing or two about storytelling. She says:
“You’re never going to kill storytelling because it’s built into the human plan. We come with it.”
The earliest forms of storytelling in pre-history combined multiple formats and styles of delivery. Australian aboriginal people decorated the walls of caves with symbols, delivering stories via oral narration, music, art, and dance. Now we have podcasts, newsletters, TikTok and Netflix.
We may have invented new interfaces for relating to the world and each other, but the atomic units of storytelling haven’t changed. Three-act structures beloved of Hollywood studies; brand tag-lines cynically constructed by Madison Avenue charlatans; UX loops engineered by Silicon Valley – these are models used to monopolize markets and grow enterprise value.
And as our collective understanding of data and its technological applications accelerates, the art of story is becoming a science, as millions of astounded ChatGPT users can testify. AI is well suited to the act of storytelling, giving structure and meaning to chaos of infinite information. Turns out there’s no Shakespearian genius to hacking the human need for stories – they are models that can be created, tested, and optimised with hard data.
Storytelling is more than a mental model. It’s a platform for life, enabling the best storytellers to acquire and monetise users at scale.
And these age-old structures can be hacked to build brands, raise capital, and take over the world.
Why do some companies achieve greatness when others, with the same resources, fail? How do founders defy the seemingly impossible and build unicorn businesses that dominate verticals? Simon Sinek asks this question at the start of his now infamous Ted Talk.
The answer lies in storytelling. According to Sinek, the fundamental difference between the Apples of this world and everyone else, is that they start with why. He argues that:
“People don't buy what you do; they buy why you do it and what you do simply proves what you believe. In fact, people will do the things that prove what they believe.”
And he goes on to explain that most companies do their marketing backwards. They start with what they do, and then move to how they do it. Why doesn’t even come into it.
Apple does things differently. It starts with why:
“With everything we do, we challenge the status quo. We think differently.
Our products are user-friendly, beautifully designed, and easy to use.
We just happen to make great computers. Want to buy one?”
Steve Jobs built a proprietary storytelling model to elevate his company above all others – to “think different”, and crucially, empower others to do the same. The emotional pull of that story is almost irresistible, for hardware customers, software users, talent, investors, journalists – everyone.
Since then, we’ve seen waves of stories; social media, e-commerce, fintech, mobility apps, alt-protein, crypto, NFTs et al.
Implications for investors
The writer Kenneth Burke observed that, “Story is equipment for living.” It’s also equipment for investing.
The best founders recognise the power of storytelling. And the best investors do too. They use stories to get what they need (funding, people, product, distribution) – and eventually, to get what they want (to win).
Markets are governed by stories. It’s been that way since the dawn of capital. The story of the American railroad is perhaps the greatest story ever told, characterised by heroic exploration, irresistible progress, and rampant commerce that transformed a frontier market into the world’s largest economy.
In the late 20th Century, emerging markets benefited from the same grand narrative, with the “rise of the middle classes” driving wealth creation on a level hitherto unseen in economic history.
But this time it’s different. Stories matter, but in the Internet Age there are simply too many of them for investors to process. Too many stories, not enough time. And sometimes, the right stories told by the wrong people. For every Steve Jobs and Elon Musk there’s an Elizabeth Holmes and Sam Bankman-Fried.
Which is where data science and technology come in, creating signal from noise and routing capital to people and projects that deserve it.
Film director Jean-Luc Godard observed that:
“Sometimes reality is too complex. Stories give it form.”
To unlock the power of stories, we must learn how to quantify them. To derive simplicity from complexity, order from chaos.
That’s our story at Koble. What’s yours?
Work with Koble
At Koble, we've spent two years developing our groundbreaking algorithms, which discover early-stage startups that outperform the market and predict their probability of being successful.
We’re working with forward-thinking angels, VCs, family offices, and hedge funds to re-engineer startup investing with AI. If that resonates, get in touch.
Investor reading
😂 Do You Have a ‘Failure Résumé’? The Latest Profession Broadcasting Its Misses and Flubs – Venture-capital firms tout “anti-portfolios” to show a degree of humility; one critic calls it “performative BS”.
🤖 10x your productivity with ChatGPT – 2/3 of the VC value is created in sourcing and screening, but sourcing is inefficient and screening is biased, ineffective and non-inclusive.
🦾 AI and the Big Five – The story of 2022 was the emergence of AI, first with image generation models, and then ChatGPT. It seems clear that this is a new epoch in technology.
Some tweets
Parting shot
“There are no beautiful surfaces without a terrible depth.”
― Friedrich Nietzsche
Regards from your [self-actualizing] startup investing AI,
About Koble
Koble is re-engineering startup investing with AI, applying quantitative strategies that have disrupted public markets to early-stage startup investing.