In 2005 I tried to warn our startup team of three about taking on the wrong investors & was dismissed as a “loose cannon,” so I deferred to the them. At the time, we didn’t even recognize the team’s behavior as uncivil or toxic.
Three years later, and after $2M invested, we lost everything due to the team’s initial poor investment decision and my lack of input at the time. This type of scenario can happen to all startups making pivotal team decisions.
Most startup teams are failing at present; some 9 out of 10 will eventually fail within ten years, according to statistics.
We form a startup team because of the astute decisions we think we can make, together.
We breakup or fail as a startup team because of the poor decision-making process and the poor decisions made, that didn’t work out as planned. Shit happens, right?
But does it have to happen so often, at such expense, and so destructive at times? Can we reduce the overall failure rate and make it more enjoyable to be part of a startup team? I think we can.
There are two parts to team decisions, I believe, that are responsible for our team’s success or failure:
- HOW we make TEAM DECISIONS ie the decision-making process.
- The actual TEAM DECISIONS made.
How we make TEAM decisions:
How we treat each other during the decision-making process is what philosophers, psychologists, religious leaders, and politicians have been debating for millennia, trying to resolve the process for how we make the fairest decisions, together.
How we treat each other when a disagreement occurs affects the decisions we make. The loudest or most coercive voice being more likely heard and acted upon rather than the smartest or most logical idea. These unfair abuses can also affect the relationships between team members after each process (death by a thousand cuts).
The actual decision:
Below are some examples of poor team decisions made. I hypothesize that startup teams fail not for a “lack of product-market fit” but because of a poor team decision-making processes that lead to a poor CHOICE being made.
Poor choices such as:
- Lack of Product-market Fit = Poor CHOICE of product
- Team Problems = Poor CHOICE of team and culture
- Finance Problems = Poor CHOICE of how and where to get funds
- Operations Problems = Poor CHOICE for how to execute
The startup team agrees that we are all responsible to moderate each other’s behavior during discussions and team decision-making. When I find a team member’s behavior or language inappropriate or not part of our values, I OBJECT, in real-time using a three phase safety drill. If either of us are still dissatisfied with the outcome we can use a backup safety net, the peer review network. The network can also be used for general advice on startup decisions.
Here is an example of our safety drill and safety net in action: *Caution! Yet to be fully tested
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