The Real Reason Your Startup May Be Struggling

What would happen in your start-up if you and your co-founders committed to open, vulnerable conversation?

The list of daily challenges for a co-founder is just about as long as her to-dos. If you are wired to start a company, design a product, create solutions for the world’s biggest problems, or raise millions of dollars to fund an idea conjured up over a couple of microbrews, then you are also adept at managing those challenges, one by one, day by day.

That ninja skill makes you good, even great, at what you do. It is probably a big part of why your start-up is growing, and why that one idea now employs dozens of people, has gained the attention of many VCs, or has big possibility.

But there is also something that you are doing that could be causing most, if not all, of your biggest challenges, and that could be sabotaging your company or your career.

It is not about being smart.

It is not about making swift decisions.

It is not about surrounding yourself with a dazzling team.

You could be causing most of your company’s problems because of the way you are communicating with your fellow co-founders.

What we know at Reboot after working with hundreds of executives and high-octane leaders, many of them start-up co-founders, is that there is a predictable way that partners think and speak that all too often leads a company to struggle and even collapse.

With a 90% failure rate for start-ups, a number that’s astoundingly higher than the current national divorce rate, it is critical that we finally get honest about communication conflicts within companies. It is also important that we understand exactly how we are causing them ourselves.

If you’re internally yelling out, “But I am a great communicator,” consider this.

Communication conflicts are often seeded in the inevitable division of power and responsibility among co-founders.

From early on, you may have mapped out who is the best fit for each role, or you may have haphazardly taken on tasks out of necessity. Either way, this experience is often pragmatic rather than emotional, and there isn’t much excavating into feelings. If you haven’t asked why you are each suited for certain responsibilities, what the process is to resolve conflict across those roles, what to do if you find yourself miserable a few months from now, or how to hear each other out in times of strife or change, then you could each be forging ahead with spectacular titles and very little satisfaction. You could be unknowingly taking that lack of understanding or resolution out on your fellow co-founders, your staff, or possibly, the whole company. Although it might feel easier or safer to push ahead — hey, it’s the start-up way — it is very likely doing you all in.

Not talking through issues is one problem, and using code among co-founders can be equally damaging.

In the sprint to launch, you and your co-founder may have developed ways of quickly sharing updates and ideas. You may have also spent so much time together that you don’t have to get all the words out before your partner grasps the full story. This communication short-hand may be necessary, powerful, and binding. It also may very well grow into a beast that separates and destroys the two of you.

You may whip up killer pitch decks and be completely in your flow composing white papers. You may have gold stars from media trainers and therapists for how articulate you are. And you may also be in a destructive communication loop with the person who’s most important to you and your business.

Before you insist, “But we are not like that,” keep reading.

Once the sprint morphs into a marathon pace, one of you will likely take on the CEO role and the others will focus on functionality. One person charges ahead, scaling their position as well as the company, while the other is carrying the team, the data, and the logistics along with them. You are both putting in all your hours, effort, and insights, but you’re now running your start-up from opposite corners (or corner offices, or corners of the dining room table).

Our clients often tell us that success strips them of all relationships, and those damages often include the feeling of divorce from the person you dreamed this all up with at the bar. Your (business) marriage needs to include heart-to-hearts and tough conversations just like romantic relationships.

Co-founders, we’ve found, keep using their communication short-hand long after it should be shed. They also stop having critical conversations about how they feel within the company, the team, and their own roles. Loneliness, resentment, and anger build. The co-founders no longer feel like equals. They don’t have the tough conversations that could be awkward or even explosive for a few minutes, but could eventually lead to a healthier company, a more cohesive team, and more supported partners.

If you’re still not convinced, ask yourself a few simple questions.

  • When was the last time you had a co-founder conference that included talking deeply and honestly about how you really feel within your role in the company?
  • How often do you disagree, kindly and respectfully, and are really, truly open to hearing a differing view without exploding or holding a grudge?
  • How regularly do you snap into judgment mode, bury a grudge rather than dealing with it, or face the same challenges over and over and over?
  • Do you quickly go to “She is always doing [this thing that is a real trigger for me]” or “He is so busy being the face of the company that he doesn’t ever [do this thing that could really help the business or me thrive]” or “They don’t get [all of the things you do, feel, are for the company]”?
  • Can you spin a whole situation or line of thinking in your head repeatedly for days, weeks, or months before mentioning it in a co-founder meeting?

Your responses here will point to whether your co-founder communication protocols are healthy or could use some work.

But before you feel bad or place blame, know this.

We all avoid difficult conversations, especially talks that include complicated emotions like risk and vulnerability, shame, and loneliness. It is much easier to take a position of power, make a lot of noise, and raise our hands and voices. Or it might feel much safer to power through, stuffing it all away for another time or until we burst.

There’s actually a process many of us follow when we don’t have healthy communication practices. It’s outlined in a model called the Ladder of Inference, (listen to Reboot’s podcast Extra on this topic) designed by organizational psychologist Chris Argyris and promoted by author Peter Senge.

The Ladder is the thinking process many of us go through to get from observing a fact to making a decision, and it is particularly powerful in fast-paced business environments. Basically, we rapidly scale the ladder, first taking in facts, then applying our personal beliefs and prior experiences. Next, we interpret what it all means and throw on the filter of our assumptions. After that, we quickly draw a conclusion and create more beliefs to support that conclusion. What we end up with, in often just a few seconds, are actions we can justify are “right.”

We may say that our decision is right for the company and its mission, our team, or our own trajectory. But all these actions truly serve are beliefs developed out of hurt, judgment, assumption, and not real facts, different perspectives, or interaction with other people.

In your head, it might look like this.

  • I see Victoria over there focusing only on her phone while I am giving my report in this meeting.
  • She is probably prepping for her appearance on Bloomberg and doesn’t even care that I’m dealing with all these analytics and backend nightmares while she’s getting her makeup done in the green room.
  • Victoria loves the camera so much, she’s clearly gunning for an on-air spot for the tech report and will leave me to manage everything at our most critical moment.
  • I need to speak to the board about ousting Victoria so we can prevent that kind of chaos and protect the company.
  • It’s what’s best for our company and team. I love Victoria and she’s very smart, but she’s turned on this company and we are all at risk. This is the right thing to do for all of us.

For Victoria, the situation might actually be something like this.

  • Victoria, like the other co-founders, hasn’t yet drawn a salary until another round of funding comes through.
  • While she’s confidently agreed to this financial arrangement, she’s nearing the end of her savings. Her mortgage and her kids’ tuition is due.
  • Her family has just sent an urgent email to inform her that they can’t loan her any more money. She’s in a quiet panic about what to do next to take care of the business as well as her home and children.
  • She can’t focus on the meeting agenda because too much is swirling through her head about what to do next and how to tell the other co-founders.

Here’s how to break the cycle today.

We advise co-founders who are experiencing communications crises to stop everything and focus fully on each other for at least an hour a week.

We walk this talk ourselves, committing to regular meetings where before we go over any data or give reports or fire up a Keynote presentation, we do a Red-Yellow-Green check-in.

Each team member shares how they are feeling using stoplight colors, and then shares why they are excited, distracted, confused, or maybe just proud to have dialed in, nothing more. A few months ago, our neighbor’s dog, who desperately wants to be a part of my family, jumped the fence into our yard and then got scared. He was barking and jumping and making a mess of the place where my young kids play. With only a few minutes before I had to call into the meeting, I was wrangling a now muddy and manic dog back to his home.

In other companies, I may have put myself on mute until I caught my breath, pretended to be at the top of my game, and tried to keep it all together while glancing out the window repeatedly to see if the dog was back at it in our hydrangea bushes.

But because we have the permission, transparency, and humanity of honest Red-Yellow-Green check-ins, I was able to explain, laugh about it, and then get back to business when I was ready. No one else on the line had to worry that I was in a panic or sneaking somewhere or not well. They already knew the story.

Red-Yellow-Green is just one part of our wider company culture to respect, hear and acknowledge each other because each of us wants to be great at what we do, and all of us want the company to thrive. It’s not a revolutionary conference call agenda item, but then, most of us have never had bosses or colleagues who would rather check-in than make quick assumptions based on false beliefs.

What would happen in your start-up if you and your co-founders committed to starting anew with more open, vulnerable conversation? The Red-Yellow-Green environment not only calls for a “where are you today?” openness but also gives room to ask how each of you are doing in your roles within the company, what your personal and professional challenges are, and if any of your processes, missions, goals, or culture need to change.

You will also see pretty quickly that once co-founders make a practice of checking in and having civil conversations about emotional stuff, the rest of the team will follow.

I learned this in my son’s preschool class. One day, I walked in to pick him up and saw him crying in a circle of kids all playing with color blocks. The teacher approached him, kneeled down, and said softly, “You seem frustrated. How can I help you?”

Not only did my son open up about what was going wrong, his friends asked how they could help, too. In a classroom where there are lots of tears and developing social-emotional needs, four-year-olds simply observed and then offered assistance — for the good of their friend but also for the good of the whole class.

For those of us used to scaling up the Ladder of Inference, it may take a bit more practice to stop the false beliefs, assumptions, actions, and justifications. But, as co-founders, we can lead the way by doing it over and over every day, in every meeting, each week, and with every person on the team.

Wondering what that might really look like?

“Oh, hey, Victoria. You seem distracted. Do you need to take five? Is there some way we can help?”

Much better, right?

“Jacob, hello. I’ve been feeling really isolated from the team doing all this travel for pitch meetings. Can we talk about how to reorganize a bit?”

“Kim, I notice you’ve been a hard-charger at work since your divorce. I want to make sure you’re doing OK. If you need to take your vacation early to recharge, let’s talk about how that might work.”

“Phil, I really value your insights. How about we grab a cold brew so I can tell you about some challenges I am having right now.”

“I am way in the red today, team. I will tell you why and then I think I will be in a better place to share the sales numbers for November.”

One month from few challenges, a stronger team, and better relationships with your co-founders.

Can you commit to practicing a Red-Yellow-Green check-in with your co-founders and team members for one little month? Are you willing to have four tough conversations in the next 30 days?

It will require retooling that to-do list of yours, and partnering up with your co-founders to make changes that are not always easy but might boost your company’s success rate considerably.

Consider it marriage boot camp or triathlon training with your business partners. Notice what is uncomfortable and then get back on the bike or into another check-in session. Celebrate what’s working, and share how that feels, too. Bring all those ninja skills of determination, creativity, drive, and investment that are building your company to the people you started it all with back at that bar. And when the month’s over, Red-Yellow-Green the overall experience to discuss openly, honestly, and vulnerably what other shifts you and your co-founders can make together, share with the greater team, and use to secure a real future for your company and your own role in it.