So Crucial information! too many founders treat storytelling and unit economics as separate conversations. The strongest startups make them reinforce each other is the clear reason to exist and a business model that gets stronger as it scales. If either side breaks, the company eventually does too.
A surprising number of ideas pass the narrative test and fail the reality test (what we in Australia call "the pub test"). The story can be compelling. The economics, incentives, or human behaviour underneath not so much.
Whether you're building a company, launching a project, or pursuing a career change, the same question applies as to whether the plan can survive contact with reality, or just on the whiteboard.
Virginia ran exactly that experiment in 2009: a data center tax exemption projected to cost $1.54 million a year. The narrative held up fine. By fiscal 2025 the actual cost was $1.6 billion, and now the state is fighting over whether to kill it. The pub test tends to arrive late, but it always settles the tab.
In the end, nothing matters if there' no viable business model. And this looks to be the case of people who try to put a lot of effort passing one test cause they didn't paid attention to the other.
So it's not a matter of doing well in one or the other but doing the work on getting both right.
Valuable info here. Knowing if this business makes economic sense at scale is VITAL for moving forward. If the numbers don't line up, we need to pivot.
So Crucial information! too many founders treat storytelling and unit economics as separate conversations. The strongest startups make them reinforce each other is the clear reason to exist and a business model that gets stronger as it scales. If either side breaks, the company eventually does too.
The best companies make the story and the economics work together
A story that needs five minutes to explain isn't a story.
If it takes that long to explain, the market will usually tune out
This distinction applies beyond startups.
A surprising number of ideas pass the narrative test and fail the reality test (what we in Australia call "the pub test"). The story can be compelling. The economics, incentives, or human behaviour underneath not so much.
Whether you're building a company, launching a project, or pursuing a career change, the same question applies as to whether the plan can survive contact with reality, or just on the whiteboard.
That’s a great way to put it. The pub test is a good reminder that reality always gets the last word
Virginia ran exactly that experiment in 2009: a data center tax exemption projected to cost $1.54 million a year. The narrative held up fine. By fiscal 2025 the actual cost was $1.6 billion, and now the state is fighting over whether to kill it. The pub test tends to arrive late, but it always settles the tab.
In the end, nothing matters if there' no viable business model. And this looks to be the case of people who try to put a lot of effort passing one test cause they didn't paid attention to the other.
So it's not a matter of doing well in one or the other but doing the work on getting both right.
Really interesting, thanks for sharing.
Both sides have to hold up, or the whole thing starts to wobble
Valuable info here. Knowing if this business makes economic sense at scale is VITAL for moving forward. If the numbers don't line up, we need to pivot.
If the numbers do not work at scale, the business needs a rethink
This breaks down the startup journey with potential ups and downs so good! Great post Petar!
Appreciate that
This breaks down startup reality really clearly.
Glad it came through clearly
Every founder knows the temptation to make the deck sound bigger than the business feels.
The dangerous bit is when you start believing your own slides.
Investors can usually smell that before they’ve even reached the numbers.
storytelling test ;)
Great breakdown! A clear story opens doors, but sound economics keeps them open.