In marketing, there is a concept that comes up a lot, the concept of storytelling, of communication and presentation of a product. Telling a story around a product, creating a whole universe around a brand has always been something essential in a brand. Take the example of Apple or Nike, their brands reveal a whole universe, buying Apple is to enter a community, wearing Nike is to identify with a competitive spirit.
However, let’s look at it from another angle which can be pejorative, isn’t the extra presentation a way to hide a weakness in the product? If the product is perfect and responds to a strong demand, why do we need to over-present it? Let’s analyze two companies that thanks to their storyTelling managed to fool the market and their investor, WeWork and Theranos
Adam Neuman created a coworking company called WeWork as its name indicates, the goal is to create a working community. With a storyTelling, a communication and a univer wework, Softbank invests 4.4 billion dollars in the American company WeWork, bringing its stake in the start-up to 7.4 billion dollars. This investment values the whole of Wework at a capitalization of $ 20 billion an IPO is planned for September 2019. Yet many economists are questioning the viability of the company’s business model, as well as its true valuation.
In October 2019, WeWork therefore announced the abandonment of its IPO, after a significant loss in its capitalization, and fired its CEO and co-founder Adam Neumann.
To stem the decline in valuation from $47 billion in January to $8 billion now, SoftBank, which already controlled about a third of the capital via successive investments totaling $10.6 billion and thus found itself in a complicated accounting situation,s disbursed $10 billion to take control of the company.
In November 2019, WeWork announced the elimination of 2,400 of its 12,500 employees, as well as the transfer of 1,000 employees to subcontractors. Sometime later, while the company is in the midst of restructuring, co-founder Miguel McKelvey announces his departure from the company.
Theranos was an American company in the field of biotechnology.
Theranos was founded in 2003 by Elizabeth Holmes, a steve job worshipper.
The company is supposed to have developed a technology to perform inexpensive blood tests. The founder claims to perform blood tests with a few drops of blood collected without a needle with her own collection method. As of 2015, her company is valued at over $9 billion.
Several medical experts as well as the U.S. administration express skepticism about Theranos’ technology, noting that it has never been evaluated by independent expert panels or published scientifically and that Theranos has also never provided evidence of its reliability. Several experts and media outlets have expressed the assumption that the company’s financial value is highly fanciful and that the company is built on a scam.
In October 2016, in an open letter, Elizabeth Holmes indicated that the company would be closing its laboratories and laying off 340 employees. In March 2018, the Securities and Exchange Commission (SEC) recapped the falsifications the company was accused of in an indictment.
In 2018, its executives (among them Ramesh Balwani) were indicted for « massive fraud »: the technology developed was not exploited as advertised in fundraising to investors, and was used to cover a « sophisticated scam, » according to the Securities and Exchange Commission. In September 2018, Theranos’s new CEO announced the dissolution of the company. The company was dissolved.
WeWork and Theranos used storyTelling to fool the market, but every day around us startups, freelancers and even companies emerge without delivering anything other than storyTelling. This scam is all the more complicated to be unmasked now that it is possible to create a successful company without making profits right away, Uber, Amazon and many others took 10 years before being profitable.
But let’s be honest, Apple did deliver something else than storytelling and we can’t say that if Apple had only done « producttelling » it would have been enough to become what it is today. As a marketer I can tell you that a lot of my work is focused on presentation and communication, and that’s fair enough. So at what point is storyTelling a pejorative? What’s the difference between good storyTelling and bad? If you were to invest in a startup, collaborate with a freelancer or even employ someone, how do you avoid investing in the next Theranos, collaborating with a freelancer who doesn’t know his stuff and employing someone incompetent?
Here is the way to know who is standing in front of you, analyze and study seriously your interlocutor to know outside of the presentation what he sells/is worth, of course the presentation will give a different touch in the way you will see the product, but internally take a step back and analyze the product and only the product, when you see an Apple Keynote presentation you have the right to appreciate the communication and even why not to take that into account when you buy, but analyze scrupulously the product itself if it is up to its presentation.
Once again I repeat that communication, presentation, storyTelling of a product alone is not enough but it is a skill and not the least, correlated with a good productTelling it can take your brand to high levels.