We’ve heard thousands of problems from founders — and often find ourselves looking for a pattern that unites their seemingly very different issues. We think that communications and people are the similarity that binds them.
If a founder comes to me for advice about a problem, it’s usually a sign that he or she is really stuck. Problems can seem intractable when you’re deep in the day-to-day of running a business. Crucially, this can also make it difficult to truly identify what the real problem is before looking for a solution. I think that one thing many founders get wrong is to try and solve a problem before they know what’s really wrong.
This is why, once I’ve listened to the founder’s explanation of the issue they are facing, I don’t give suggestions immediately — I ask questions. We always start with similar queries, all with the same purpose:
- Is this a failure of communication?
- Is the right person doing the job you are trying to get done?
After thousands of conversations, I recently realized that there was always a pattern to my questioning. I understood that through this examination, we were always trying to understand two aspects of the context: communications and people.
Answering fundamental questions about these two angles can go a long way in helping founders first identify what problem they are facing, and then solve it. I have also found this schema helpful when communications or people are not the issue — if these questions don’t provide clarity, that’s a sign it’s time to dig deeper and that a bigger, more thorny challenge is likely present.
Is this a communications issue?
Communication is a frequent cause of issues at startups because it is so easy to get wrong. Communication is always multi-layered, which means that in each step of information being translated, something is usually lost.
Communication is also so much more than just sharing updates on Slack or sending emails. Robust, effective communication requires ownership and intention, smart planning and internal communications to secure people’s attention, and being adaptable as things change.
To probe whether the problem at hand is one of communications, I ask questions such as:
- Did that person get the necessary input from another person or people (typically the founder) to complete the task or project?
- What factual information is that individual relaying? Is there a miscommunication or mistranslation of information?
- Did you (the founder or leader) clearly communicate your expectations and the company’s goals to employees?
- Are timely communications and updates being shared on big decisions and projects?
- Are there opportunities — both formal and organic — for different teams to interact?
- Are members of all teams getting opportunities to interact directly with the core product or service so they understand it?
- Are the right people talking to the right customers?
- Are there feedback systems in place between different teams and departments and across different levels of seniority?
- Are you and your company communicating clearly with investors, clients, or other third parties?
This is not an exhaustive list but gives an idea of the many angles from which one needs to look at a problem to find where the cause is.
Is this a people issue?
If the founder’s issue does not seem to be related to communications, I ask about people. If a problem arises as a result of the people involved at a startup, it is usually because the right person is not doing the job.
By this, I don’t mean that the individual or team concerned isn’t talented or hardworking. They simply might not be the right person to execute on something. They might not have the flexibility and adaptability — a mix we refer to as potential — to complete the task.
To identify if people are at the core of the issue, we ask questions such as:
- Is the right person in the organization taking the lead on this task or project?
- Does the person with responsibility have the necessary skills?
- Does the person really understand that s/he might need to build processes or undertake completely new tasks?
- Did that person get in contact with the right people internally or externally (e.g. client-side)?
- Is the contact on the counterparty side the right person?
- Did that person get the necessary input from another person or people (typically the founder) to complete the task or project?
- Do you actually need external expertise to do what you are trying to do? Do you not have this capability in-house?
If I have spoken to a founder at length about the problem they are facing, have asked lots of questions, and together we ascertain that the issue is neither the result of a communications breakdown nor a people issue, then the problem is deeper and more information is needed.
Finding the true cause of the problem: when fundraising isn’t going well
What does it look like to apply this simple communications/people framework to a common challenge faced by startups?
An often-cited piece of research on the reasons why startups fail gives not being able to raise and running out of capital as the top reason companies don’t survive. This is one of those problems that I think founders often misdiagnose; fundraising will be difficult for most companies, but if your company is meeting its targets and showing VC-level performance, it should not be impossible.
When founders have come to me about this issue, I have found that the real problem often lies somewhere in the two issues - communications and people - I outlined above. Starting with communications, a few questions that we would ask founders to consider would be:
- Did the founder communicate their core message well? Are you giving the right data to investors?
- Did the founder explain their expectations of the round well, such as size and timeline?
- Did the founder ask for and understand feedback from investors? Did you extract data and insights from the feedback you’ve gotten to help you communicate better?
- If there were signs the fundraising was not going well, were they communicated to the right people so action could be taken?
If the founder tells us that she has done all these things, we next ask about people.
- Did the founder speak to the right person or people on the investor side?
- Is the founder the right person to be doing the pitch — is there someone who is more skilled at this in the team? Founders are not always the best salesman or woman for their company — and that is okay.
- Can someone help hone the pitch?
- Did the founder speak to other founders — or founders further along their journey? Did they speak to VC friends or existing investors to get more help and information?
If the founder can answer that she did all of these things, then the problem may have to do more with the market or timing - perhaps VCs are not deploying much at the moment. Then we can have a conversation about how to address this issue.
Lack of commercial traction (no market need or being outcompeted)
The next most frequent reasons given for startup failure is the absence of a market need and being outcompeted, which, though they are different problems, both refer to a lack of commercial traction. Therefore, the way I would ask questions about communications and people would be similar in these two cases.
Building and delivering a product that matches a customer need - and sells - requires the coordination of product, tech, marketing, and sales teams. If the team is saying that there is no commercial traction, it may actually be a problem of communication between all of these different actors - or with the client themselves.
If I were a founder in this situation, I would first ask questions such as:
- Are product, tech, marketing, and sales teams communicating well?
- Did the sales team give proper communication about what kind of feedback clients were giving — and that the product was not what they needed?
- Were salespeople giving this feedback, but it wasn’t communicated to more senior members of the company?
- Is the customer success team giving the right feedback to shape the roadmap?
- Does the tech team have the right information about the client’s needs to help them focus their building?
- Did you properly communicate the strengths of your product to the client? You might not be communicating your USP well to clients, and you might need different messaging for different clients or even different contacts at a single client.
- Have you asked why the client didn’t need the product if they said so? — perhaps there are other frictions they are facing in adopting your product, from budget to integrations or decision-making or even just readiness in adopting.
- If there was a sudden change in client behavior, did you ask why?
This should be easy for a founder to trace through user data — if that is not easy for you, that’s also a sign you are missing the right processes and tools, something to set up urgently.
If there is no communications issue, then it might be a people problem. Maybe the team is not the right one to identify the true needs of the customer, and focused too much on the technology itself. Keeping the bar high for your core team hires early on is crucial.
Maybe the salespeople are talking to the wrong people on the client side. You need a sponsor on the client side who is influential enough to advocate for your product and also help you navigate the layers of corporate decision making on their side. You might also have an issue with losing contact with key people on the client side, which leads to a loss of continuity and a loss of that sale.
Again, if there is nothing wrong with the communications and team, only then is it it’s time to take a harder look at the likelihood that there actually is no market need or if you are being outcompeted by your competitors.
A final point: jumping to conclusions about the real cause of problems can cause headaches
Founders are always dealing with problems — they also have limited time. And it can cost even more time if you misdiagnose a problem and apply the wrong solution. That’s why spending even just a few minutes being thoughtful about what the root cause of the issue is can save you major headaches down the road. To learn more about how we think founders can further focus on what matters, read here.
Asking yourself questions about communications and team will not solve everything, but can provide a valuable hint in many situations.
We would be very interested to hear from others about the kinds of frameworks that have served them well in times of trouble in identifying the real causes of problems. Reach out to talk: mehmet@bekventures.com
