What’s the real value of a story?

Valuations and investing relies on storytelling, not just numbers

Author

Daniel Francavilla
August 14, 2026

Not sure about you, but Friday came really fast.

This week, we had several sessions filming at the Clarity studio, so I got to hear a lot of stories. One of my favourites was hearing the founding story of Arth, because it was about the relationship between these now business partners, and it was their first-ever time on-camera together.

The story is part of the value 💰

Storytelling constantly comes up as a marketing tool in my world, from startups to nonprofits.

If you’ve worked in either field, you know the many purposes and value of storytelling is there, but it’s not always quantified.

A podcast I listened to this week gave me another use case: Storytelling also shapes how people understand the value of a company.

On this episode of Prof G Markets with Aswath Damodaran⁠, a professor known for his work on valuation, was discussing Big Tech’s AI spending and how difficult it is to determine what companies like OpenAI and SpaceX are actually worth.

Whether you’re an investor, in the media or otherwise, there’s a lot going on behind the scenes. At one point, the guest explained that when the numbers are incomplete, you still need a story connecting what a company is doing today to what it could become tomorrow.

What happens when someone disagrees?

“You could tell me a narrative is wrong, but you have to beat it with a counter-narrative.”

Bigger than finance

Like you, when I hear “valuation”, I assume it’s only relevant to investors, stock analysts or people who spend their weekends in spreadsheets…

But all of us make informal valuations.

  • You’re a customer deciding whether that matcha is worth the price.

  • A potential employee is deciding whether your company is worth investing part of their career in.

  • Your audience is deciding whether your ideas are worth their attention.

  • A potential partner is deciding whether you are credible enough to work with.

They may not be calculating future cash flows, but they are still trying to understand the same basic thing: where is this going, and do I believe this company can get there?

That requires a story.

For more context on this story vs. numbers theme, I searched through Prof Damodaran’s blog, and nearly a decade ago, he outlined his thinking on this clearly:

“What comes more naturally to you, storytelling or number crunching?
That is the question that I start every valuation class that I teach and my reasons are simple. In a world where we are encouraged to make choices early and specialize, we unsurprisingly play to our strengths and ignore our weaknesses. I see a world increasingly divided between number crunchers, who have abandoned common sense and intuition in pursuit of data analytics and complex models and storytellers, whose soaring narratives are unbounded by reality.

Each side is suspicious of the other, the storytellers convinced that numbers are being used to intimidate them and the number crunchers secure in their belief that they are being told fairy tales. It is a pity, since there is not only much that each can learn from the other, but you need skills in investing and valuation. I think of valuation as a bridge between stories and numbers, where every story becomes a number in the valuation and every number in a valuation has a story behind it.”

Aswath Damodaran, January 2017

Part of his blog also included a sequence to actually go from story to business value, which I’ve adapted here to share with you as a framework:

Innovation creates more blanks

Established businesses usually have years of information people can look at: revenue, customer retention, costs, margins and performance across different market conditions.

Young and highly innovative companies have fewer numbers to work with. Damodaran notes that they often have limited operating history, little or no revenue and significant losses⁠.

That means more of their value depends on what people believe could happen next:

  • Will customers adopt the technology?

  • Will they pay enough for it?

  • Will costs decline as the company grows?

  • Will competitors catch up?

  • Can the product become a sustainable business?

This is especially visible in AI right now. Nearly every company can talk about agents, massive markets and transformational technology. That might describe a real opportunity, but it doesn’t explain why one particular company will capture it.

A credible business story needs to connect a few things:

  • What has changed?

  • What problem has that created?

  • Why does this company have a useful answer?

  • How does that answer produce revenue?

  • What should improve as the company grows?

  • What evidence can it show today?

That’s very different from just saying the future will be huge, and asking everyone to trust you.

The numbers and the story need each other

Damodaran has gott been exploring this idea for years. His book, Narrative and Numbers: The Value of Stories in Business⁠, looks at the divide between storytellers and number crunchers.

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The storytellers can make a future feel possible. The number crunchers can test whether that future makes economic sense.

He argues that we need both.

The story gives the numbers context.
The numbers keep the story honest.

That’s relevant to a lot of the branding and content work I do. Some leaders know their business inside out but struggle to explain why it matters. Others have an exciting vision but cannot yet clearly show how it becomes a viable business.

The best can move between the two. They can describe the future they are trying to build and point to evidence that they are making progress toward it.

If you leave blanks, other people fill them

Any story that someone tells about OpenAI will be incomplete because the company has not made all of its economics public.

Even Prof Damodaran has to assemble a narrative from limited information, his understanding of the industry and clues from different sources. His assumptions may be wrong, but without a fuller story from the company, people will continue forming their own.

Investors do it. Customers will. Employees, journalists, competitors and people on social media will do it too.

That’s why storytelling can have a real effect on company value. 

Economist Robert Shiller’s work on narrative economics⁠ explores how widely shared stories influence spending, investing and economic behaviour.

A strong narrative can help a company attract investment, employees, customers and partners. Those resources can then help the company make the original story more real.

But the story can also get ahead of the company. It can create expectations the business is not ready to meet. Hype is fun while you’re riding it… but less fun when it starts asking for quarterly results.

What this means for the rest of us

I run one of the majority of companies out there that are not trying to justify a multibillion-dollar valuation. But every business needs to help people understand the value it creates and where it is going.

This is especially important when your work is complex, unfamiliar or difficult to evaluate from the outside.

Your audience should be able to understand what is changing in their world, why your approach makes sense and what evidence supports your point of view.

That’s part of what I get to help businesses and founders do through content.

The “evidence” might be revenue and margins, but it might also be customer results, retention, repeat business, product usage, case studies, referrals or the quality of the people choosing to work with you.

As the business changes, I think the story should change too. Narrative can be tested and updated across a company’s life cycle⁠.

Storytelling can help people see value before every part of it is visible in the numbers.

But the further your story reaches into the future, the more proof you need to keep earning in the present. Because if you don’t explain where your company is going, other people will build their own version from whatever pieces they can find.

And with that, have a great weekend.

Thanks for reading!

PS: At some point, I’d love to hear your story.

By the way, here’s my latest YouTube video from this week, if you happen to be curious about what video length is working: