Can Transactive Memory Theory help you raise capital for your startup?

Franki Chamaki
Jul 23, 2017 · 3 min read

Does Transactive Memory Theory (TMT) form a model for co-founder relationship to be successful and hence able to raise the maximum capital for the company to grow?

First, you might be thinking is what the f$ck is Transactive Memory Theory?

Transactive memory is a psychological theory first proposed by Daniel Wegner in 1985. It is the concept by which human knowledge is encompassed by a “system” of say two or more individuals. Each individual is interdependent on each other and interacts with together (collaboratively) to encode/unpack, update, store or retrieve knowledge.

Put in another way its “shared store of knowledge” between people.

The theory belongs to the family of psychological thinking on “group mind” or “groupthink”.

It’s the kind of the relationship you often hear like…

  • Apple co-founders Steve Jobs and Steve Wozniak had. Job’s focus on design, usability, and marketing outsourced the tech to Woz who was/is an uber-geek engineering with amazing technological capabilities.
  • It’s the kind of the relationship Winston Churchill with his trusted old friend and a British physicist Frederick Alexander Lindemann who also become Churchill’s influential scientific adviser to the British government during world war 2 (which some say also lead the famine in India in 1943 that killed millions). But more on that here if you are interested.
  • And it’s the kind of relationship that makes loving couples feel when they reach this sense of interdependent with each other on specific tasks, knowledge and information and the same feeling people talk about when their departed loved one is no longer around and often they say “it’s like parts of me has gone too”.
  • You might do it yourself now….you don’t know how to use the remote control on your smart TV but your 8-year-old son/daughter is an expert and you “outsource” it to them store and retrieve that knowledge. My dad still outsources the TV remote to me to help him for the program how wants.

When it comes to startup founders it’s an interesting paradigm to use to assess whether founders are going to work together well hence make their startup a success.

It’s also a good model for VCs to assess founders. VCs want to see good founders, the right team, unique good problem and smart business model. But there is a heavy reliance on “people” who and how they interact. Is the founder’s relationship is strong and symbiotic?

Below is an illustration of the Transactive Memory. Early startups who have an informal or formal system of unpacking, sharing, updating, storing retrieval knowledge is critical to for operations effectiveness and efficiency.

Source: Do networking technologies improve collaboration?

VC investor who wants to invest in a startup or startup wanting to have the best chance of success might want to consider Transactive Memory model or at least clearly articulate their knowledge sharing and retrieval system. It forms part of your intangible assets.

Companies who do this are more likely to succeed as knowledge is shared more efficiency, actions are performed more effectively and key-man risk is reduced.

Questions:

  • Do you have regular team meetings, townhalls, stand ups or huddles?
  • Do you have regular written communication that is stored and shared (i.e. newsletter or updates) easily
  • Are critical matter brainstormed and critique before action?
  • How is company know-how, methods and techniques stored?

Knowing each of the team members’ expertise allows the group to distribute work in a more efficient way and allocate different assignments to team members that are the most qualified for these assignments

While we are still experimenting, we at HIVERY always looking for new ways to unpack, update, store or retrieve knowledge amongst us. We have tested and currently use: one-on-one sessions, 15 min team stand ups, town halls, newsletters and weekly coffee catch ups with all team.

What are you doing to knowledge sharing and retrieval system to life?

Franki Chamaki

Written by

COO & Cofounder at HIVERY. Interest in areas of Artificial Intelligence, VR & AR, Blockchain, Genomics and Coffee

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