The fine line between storytelling and bullshitting

My buddy Chris edited this piece while rage-clicking through Runway.ai. After three hours, he gave up on making a video after realizing he’d need a PhD in Promptology and Machine Whispering.

Paul Graham is, in my opinion, the best storyteller of the startup world.

He is the one that coined the most famous line of this industry: “Make something people want”

If you want to understand that line, you need to read his 2004 essay titled “How to make wealth” - probably the first essay in which he wrote that line (but don't quote me on this).

Reading something that was written 21 years ago, talking about such a fast changing world as the one of technology, might seem dumb but I promise it's not. It actually helps framing the current state of venture much better than most of the things I've read recently.

One of the paragraphs is titled “Technology = Leverage” and within that, Graham claims that the best way for a startup to be successful is to pick a hard technological problem.

What is technology? It's technique. It's the way we all do things. And when you discover a new way to do things, its value is multiplied by all the people who use it. It is the proverbial fishing rod, rather than the fish. That's the difference between a startup and a restaurant or a barber shop.

It's fascinating to see how to the eyes of 2004 Graham, the essence of a startup was to create new technology - the harder, the better. Programmers for him were artisans, that could literally create wealth with their hands by writing pieces of software.

I hope that by reading that essay in 2025, you too see the irony of having companies worth dozens of billions that are nothing more than wrappers around someone else's technology, indistinguishable under the hood one from another.

How is that possible? What happened to the “discover a new way to do things”? What happens to the “make something people want” when the “making” part becomes so easy that you can literally rebuild popular websites with a few prompts?

Don't get me wrong, Lovable and co. are exceptional companies and I only have admiration for the people that built them. Moreover, from a purely Economy 101 point of view, these companies are exceptional at making something people want, because people are paying their hard-earned dollars for what they make.

However, this new world makes early-stage investing extremely hard.

Early-stage investing has always been mostly about people, but reading people has fundamentally changed.

In a world where making things was actually hard, an early working product or relevant experience was a good predictor for the success of a startup. You could get a sense of the quality of the founder looking at the early product.

Unfortunately, we don't live in that world anymore. What is it that we should look for in founders at this stage then?

If building a product is now easy, all we have left is the ability to sell that product. The ability to build a compelling story around it.

When products are almost indistinguishable from each other, the greatest value lies in always being top of mind, at all costs.

Entrepreneurship at the early stages is almost 100% convincing others - investors, employees, partners - so it shouldn’t be a surprise that storytelling is number one in the list of must-haves.

However we need to be very careful here, because storytelling is very different than bullshitting, but the line between the two is very fine.

How do we trace that line?

The two traits that help defining it are, in my opinion, consciousness and authenticity.

Storytelling without consciousness is wishful thinking.

Consciousness means knowing where someone comes from, what surrounds him, and the difficulties that will be encountered during the journey. While every single founder, looking back, will say the journey was harder than imagined, having an idea of the possible obstacles during the way is important.

Consciousness of the surroundings is also essential when taking strategic decisions - the steps to build something valuable are different if you are building in Texas, in Germany or in Singapore. Sometime this trait can also be described as “self-awareness”.

Authenticity also needs to go together with storytelling.

Storytelling sometimes pushes people to paint themselves like someone they are not. This is very common when fundraising: you can’t fake forever, but you can probably play the role for the limited amount of time you spend with an investor during the due diligence.

Someone who is authentic is often transparent, reliable and consistent in the behaviors - all traits that are good when doing business.

What makes evaluating these traits particularly hard, is the limited amount of time in which we are supposed to make these decisions.

For example, even though there is some merit in evaluating the personal background of founders, it is extremely hard to efficiently factor it in the decision making process.

The time you get to spend with the founder before the investment is simply not enough, especially if the founder is building something valuable and other people know it. Moreover, there will always be some role playing during the due diligence process, and the founder will hardly expose to an investor their personal struggles or stories about their past.

Professional background might be easier to evaluate, but being a public and easy benchmark, it will be certainly already priced in.

There is still some room for reasoning here: is the professional background an indicator of success? It might be, but repeated founders certainly put a premium on the price of the round.

The problem I see with repeated founders is that it might be hard for them to deviate from what they have done successfully in the past, which might cause some version of innovator dilemma to kick in. So I believe that, while relevant professional background is certainly needed for some technical roles, it is not always worth the price premium it puts on the round.

When reading personal opinions like the one in this piece, you should always be careful: if it was easy to write a playbook to invest at pre-seed, VC wouldn’t be such a risky asset class. Also, if I held the secret to successfully picking early-stage founders, I wouldn’t be here writing this, but I would be sipping a cold beer on my private island instead.

If there’s one thing to take away from this piece, it’s this: embrace storytelling, reject bullshit.