How to fake experience when things go wrong
Whether it’s a member of your senior team getting poached, seeing your cash run out sooner than you were expecting, or facing a crisis situation, such as a data breach or privacy issue, startups will always face moments when the world seems to be conspiring against them.
Bumps in the road are par for the course when building a business, and navigating these successfully is key to making your venture a success. But for some founders – particularly if you’re just starting out, or you don’t have a Co-founder for support, it’s natural that you may start to panic and feel a bit lost, unsure of how to rectify the situation.
It’s at times like these when experience is a big plus point, to give you some all-important perspective on events that can seem like the end of the world. Numerous research studies have found that more experienced founders with an extra few years under their belts are often more successful. And, while you can never generalise too much, with time comes often a broader perspective and, in many cases, greater resilience too, which can make coping with the ups and downs of startup life that bit easier.
So how can we engineer that perspective and experience when things go awry – as they inevitably do?
Calm down, stay positive, but be mentally prepared to fail
Remaining calm might sound easier said than done, but it is impossible to think clearly when you’re panicking. Plus, as the leader of your business, you set the tone for the whole team, so keeping your wits about you is vital to maintain morale and motivation. Priority number one therefore is to stay in control of your emotions and try to deal with the situation as objectively as possible. A good strategy is to work through all the possible outcomes, so that you are mentally – and operationally – prepared for the worst-case scenario. If that includes the potential failure of the business, then you have to be prepared for that, but always remain positive that you can, and will, avoid that eventuality.
Get it out in the open
Founders often find it tough to talk about difficult situations with their board, investors and team, which means that bad news tends to be dragged out, to avoid the inevitable pain of pulling a plaster off the wound. It can be tempting to ‘close in’ and not take much action until last moment, but the longer you take to air the issue, the worse it will get, so you need to normalise it in your own head as soon as possible. If you have a tendency to internalise things then, as a first step, share the issue with somebody close to you, whether that’s a wife, husband, parent, sibling, or friend, then move on to tell your co-founder. Once a problem is spoken about a few times, it doesn’t seem as scary. And instead of fixating on the pain of delivering bad news, you can focus on developing solutions.
Brief your key stakeholders asap
The next step is to inform your key investors, advisors and senior team. That doesn’t mean you have to tell the whole company – in fact, that usually isn’t advisable, at least not initially, as the threshold for difficult news can be quite low within startup teams and it can snowball quickly. But your top team needs to know what is going on, as they will be able to help and advise you, make relevant introductions where possible, and also take their own precautions in preparation for all eventualities. It is only in crisis situations that you see the true colour of your business partners in how they help to resolve an issue at hand. And one silver lining of any crisis is that you will emerge the other side with a stronger and more closely aligned team.
Founders are usually experts at overcoming problems, but when your business hits a crisis point, issues can seem insurmountable. It’s at times like this that you have to have the presence of mind to start building optionality and, in most cases, you’ll be rewarded for your effort, as doors will start to open around you. For example, if there is an issue with funding, it’s time to hustle, by reaching out to existing shareholders, alternative capital providers, corporate finance advisors, or those funders who were keen on the business previously but couldn’t invest. They all have valuable networks, so may be able to make introductions if they can’t help themselves. In a situation such as a privacy breach, it’s about communicating with regulators, enlisting advisers and fixing technical issues. All this will, of course, take time and will likely become a full-time job for a founder. This is where a co-founder and strong leadership team come in, to ensure the rest of the business stays on course throughout the crisis. But, putting this effort in gives you a much higher chance of containing the issue.
Ultimately, a big part of making it through situations like this is maintaining mental strength, which is why surrounding yourself with people you trust is so important, so you can talk through worse-case scenarios together and keep things in perspective. This is why investing time in maintaining a support network, including mentors, a strong board and supportive family and friends, is so important, so that you can draw on that when the going gets tough.
But remember that a crisis is always temporary and at end of the day it is never as bad as it seems. A loss of a business can be devastating but is hardly the worst thing that could happen in life, and crises are positive things in the long-run - through them we learn, grow, solidify our partnerships and mature. So, difficult as it might seem – particularly when you are starting out - try to keep that perspective and view problems as solving a puzzle, rather than a ruptured dam that is breaching around you. It will help you think more constructively and positively until the storm passes and you emerge as stronger individual.