“There’s nothing in the world more powerful than a good story.” That’s what Tyrion Lannister says in the series finale of Game of Thrones. Whether or not you like the show’s conclusion, the conclusion that stories matter is undeniably true. Entrepreneurialism and business are no exception to this rule.

Stories drive entrepreneurial organizations. They’re necessary to make sense of the mission and to make progress. Stories move businesses forward: we started out in a garage. We worked all night to launch the product. The idea came to me in the shower. These are just some of an infinite variety of the stories of the entrepreneurs.

Funders need and encourage these stories so they can quickly determine whether or not an investment makes sense. Professional consultants need a story so they can effectively and efficiently advise entrepreneurial organizations. And entrepreneurs themselves need a story so they can move quickly and inspire people to their cause. They need an elevator pitch: the 30-second narrative that explains what they’re doing. They need a story that makes sense and inspires goodwill. For entrepreneurs, refining the story is a sound business practice because it helps them drive their business forward. Without a story, they’re lost in the wilderness.

Finances matter and numbers are necessary. However, in many cases, the narrative is just as important as the economics. Good economics and a good narrative go hand-in-hand in entrepreneurial success. In entrepreneurialism, stories matter.

But as we work on our stories, we’re always at risk of creating or falling for the false narrative.  I’ve seen very few liars in my professional career, but I have seen a number of people who believe their false narratives. In other words, they believe their own b*******.

Naturally, entrepreneurs will highlight the good and downplay the bad. This is expected and necessary. You never want to start a conversation by describing how you’ve failed. However, if shedding a positive light on your organization is taken to an extreme, you create a false narrative — and a false narrative can cause financial ruin. When we work in entrepreneurialism (and maybe business in general), we’re challenged to determine what is and what isn’t a false narrative. This means both evaluating the chances of success and evaluating risk, two actions that are the cornerstone of good investment and good entrepreneurship. Business operators need to do this in order to allocate capital efficiently and effectively. Investors also need to quickly and efficiently evaluate prospects and put them in the right bucket.

But how do we determine what is and isn’t a false narrative? First, through experience, we need to develop a heightened sense of pattern recognition as well as a knack for reading people. Couple that with an ability to see the future and understand relevant industry trends: no small task. Further compounding the situation is what I call “the Steve Jobs effect,” where entrepreneurs tend to see the reality they envision rather than the reality that exists.  

Tricky work, to be sure. Businesses and people have nuances. The great team that did so well in the last investment may or may not be perfect for the next investment. It’s crucial to figure out what their weaknesses are to see if the team can go forward. The magical invention in the garage may not be foolproof, and detecting its flaws can be difficult. Finding false narratives is part of the excitement of entrepreneurialism, but it’s also one of the biggest challenges. 

I’m certainly not the master in this arena. My ability to detect a false narrative is circumspect at best, often to my own financial detriment. I want to believe in people and help them move forward. I do not apologize for this. However, it does mean that the false narrative creeps up on me more often than I care to admit. 

In the entrepreneurial ecosystem of Birmingham, the challenge is to hold to our values while stomping out the false narrative. In the Southeast and in Birmingham in particular, we’re prone to accept false narratives. With our Great Southern way of trying to get along with others, we cling to positive stories. Our tendency is to not disparage and to leave the past in the past. This makes us vulnerable to being fooled by a false narrative, which is unhealthy to the ecosystem. Collectively, we have to do better in both telling and listening.

In the telling, we have to be more direct. We can do this without disparaging. We can provide more accurate assessments of people if we are mindful that context usually is different. A person who seems ineffective may just have had an ineffective approach to a particular problem.  By better explaining the context of a situation, we can thread the needle between being polite and being frank – even in the South. Our mothers rightly taught us that if we have nothing good to say, then we shouldn’t say anything at all. However, a more complete picture of the situation told with understanding usually provides a more complete picture. This in turn helps the dignity of the narrator, the assessment of the listener, and the completeness of the narrative.

Of course, to effectively do this, the narrator needs a willing audience. That audience must also do more in the listening. They must move past the tendency to simplify and stereotype. They must listen to the more complete story with an objective balance between honest assessment and empathy, compassion and understanding. Only then can the audience see if the personal objective (be it investment, hiring, or some other form of business) can be advanced (hopefully, that objective is something more than idle gossip). To reach a more complete narrative, we need to question it until we’re satisfied that we have a complete and accurate picture.

I am always dubious of assessments and evaluations that say “communicate better.” This phrase seems to be a generic euphemism when a deeper issue exists. However, when moving through the entrepreneurial world, the telling and the listening is important. And to move ahead, we Birminghamians must do better.