How to build and maintain circle of trust in your startup
What is a circle of trust, and why is it so important to maintain trust when launching your startup? If you’ve ever wondered what the trust circle is all about, this article will explain everything you need to know.
When you’re launching a startup, it’s best not to do it alone. For example, according to Small Business Trends, having two founders instead of one means a startup will receive 30% more investment and three times the customer growth rate.
Whether co-founders, advisors or trusted friends, having a support network will help you generate ideas and help you feel less stressed out if things don’t go the way you planned.
This is where the circle of trust comes in. Knowing who is in your circle of confidence and who sits outside it can help increase the chances of your new business becoming successful.
In this article, we’re going to take a look at what the circle of trust is, why it is so important and how you can build trust with your colleagues, co-founders and co-workers.
- What is a circle of trust?
- How can this be applied to your startup?
- Why is a circle of trust is so important in a startup?
- Our steps to building trust in your startup
What is a circle of trust?
Greg: This isn’t about you, alright? It’s not about either of you. It’s about me and Pam. We’re getting married. That’s it. We’re starting our own circle of trust. And guess what? You’re not in it!
Jack: You can’t start a circle of trust. It’s my circle.
Greg: You know what, you don’t have a patent on the circle, Jack. And by the way, you’re not even in your own circle right now.
Jack: That is untrue! I say who’s in or out of the circle!
Bernie: Well, I’m confused. Whose circle am I in?
– Meet the Fockers
A circle of trust is a select group of people that know you extremely well and that you can confide in. While they may be honest and frank with you, they will defend you to those outside the circle.
A circle of trust can be applied to any part of life. For example, your family and partner may be one circle of trust. Your closest friends might be another.
Going back to the quote above, if you’ve ever seen the ‘Meet The Parents’ film series, you may remember when Robert DeNiro tells Ben Stiller that he is definitely not in his circle of trust!
How can the circle of trust be applied to your startup?
The circle of confidence not only applies to your personal life; it applies to the world of business too.
In startup terms, the circle of trust consists of those who are integral to the needs of your fledgling company and that you trust implicitly with matters of business.
Who may be in your startup’s circle of trust? It depends, and no two circles of trust are the same.
Trust circle may include:
- Your co-founders;
- Your board members;
- Your investors;
- Your advisors;
- Family members and friends.
People may enter and leave your circle at different times. For example, if someone invests in your business, they may gradually come into your circle as they get to know your startup (and you) better. Similarly, if someone betrays your trust, they may quickly find themselves on the peripheries of your circle.
The number of people in your circle of trust can vary depending on the type of startup you have, the amount of support you need, even your personality. For example, if you’re an extrovert, you may have more people in your circle than if you are more introverted.
However, one thing to bear in mind is that having many people in your circle can mean you spend a lot of time trying to manage different relationships. While it’s great to have as many people as possible on your side, you don’t want to burn yourself out.
Why is a circle of trust so important in a startup?
When you are building a startup from the bottom up, you want to work with people who will support you and fight your corner. Given that up to 700,000 businesses are founded every year in the UK alone, competition is higher than ever before. This means you need people that will help advocate for you and give you the best advice.
Here are some of the other reasons why a solid trust circle is so important when it comes to launching a business.
It reduces the chance of failure
In this blog, we have gone over many of the reasons why startups fail, from lack of money to targeting the wrong audience. Startups have also failed because there has been a lack of trust between people critical to the business.
According to Noam Wasserman, 65% of failed startups admit that interpersonal tensions between the founding team had an influence on the failure of the business.
It leads to less stress and less burnout
When people trust one another and have each other’s backs, they’re more likely to have a positive mindset.
This means your trust circle is more likely to make better decisions and stay on your side.
It leads to faster decision making
As we have mentioned many times on this blog, lean startup methodologies are essential to ensure a high-quality startup. The faster you can get your product or service to market, the higher the odds of success.
When you have a solid circle of trust to help you out, you are more likely to agree on decisions and have confidence in the decisions that you make.
Our steps to building trust in your startup
Now that you know what the circle of trust is — you probably want to learn more about how to grow and maintain trust in your business.
Here are our top tips for building circles of trust in your startup business.
Work with the right people
When you’re starting out and hiring people, it’s a given that these early hires will become part of your trust circle. This means it’s crucial to hire people who believe in the business and most importantly, believe in you.
Build up a strong enough relationship, and even when these hires move on to pastures new, they may still be a valued person in your circle.
Build an exceptional company culture
A high-quality company culture is not just needed to attract and retain the best talent. A strong company culture will also keep those in your circle of trust happy.
Company culture isn’t just about unlimited leave, a fridge of beer and colourful murals on the wall. It’s about making people feel valued, happy and most importantly, trusted.
An excellent place to start is your values. What do you want your values to be, and how will you apply them to the workplace culture?
Also, be sure to review your company culture over time. What was an ideal solution for your startup at the beginning of your journey may not be right two years in.
Withholding data from your inner circle can lead to frustration and resentment, especially if one person is privy to information that is being withheld from others within the trust circle.
Being open as possible with those in your circle of trust will build loyalty and ensure everyone is treated fairly.
Speak honestly, answer questions posed to you, and share how your startup is doing with everyone — both the highs and the lows.
Communicate as much as possible
Poor communication kills. 86% of businesses admit that low levels of communication can cause breakdowns in the workplace.
The great news is that it’s easier to keep in contact with your circle of trust than ever before. Even if you live in different countries, Zoom, Google Chat and Microsoft teams make it simple to keep everyone in the loop.
Here are some of the ways you can improve communication and maintain trust.
- Arrange regular meetings to discuss what is happening with your startup, and make sure everyone is involved in them
- Don’t shy away from communicating bad news. Withholding news can have a significant impact on trust. It’s better to get it out in the open and determine the next steps
- Make yourself available if someone needs to talk with you one-on-one. Not everyone will be comfortable speaking in a team meeting. Alternatively, someone may have concerns about another person in your trust circle
Remember that levels of trust can change
Trust is not a constant — there are peaks and valleys.
It’s important to regularly keep an eye on those in your circle and make sure they are still there to fight your corner.
Trust is hard to build up, yet easy to lose. Plus, once trust is lost, it can be incredibly difficult to get back.
The people in your circle of trust when you launch your startup may not necessarily still be there when you complete your first round of funding or sell your business.
Give people reason to trust you
Finally, it’s important to remember that trust is a two-way street. People need to be able to trust you as much as you are able to trust them.
Keep your promises, don’t badmouth people in your circle of trust and stand behind what you say. This will help forge strong bonds between you and the people you work most closely with.
Simon Sinek wrote a book called Leaders Eat Last which states that the priority of a founder is to keep their team protected from external dangers. This will help them feel safe enough to take risks within the business.
Remember… trust is a must!
We hope this article has given you valuable insight into the circle of trust and how you can apply it to your startup.
Let’s recap what we’ve learnt:
- What the circle of confidence is and how it relates to your startup journey
- How a solid trust circle can move your startup forward
- Ways you can build and maintain your circle of trust
The important thing to remember is that everyone’s circle of trust is different. You may have ten people in your circle. You may have one. However, it’s imperative that everyone in your trust circle is someone you can rely on and will have your back in a tough situation.
Here are some questions for you to consider:
- Who is currently in your circle of trust?
- Is there anyone not in your circle of trust that you would like to see in your trust circle? What can you do to invite them in?
- Do you know which circle of trusts you would be at the centre of? Ideally you want to be in the trust circle of the people who are in your own trust circle.
Knowing about the population of your inner circle will help encourage positive working relationships and mean your business can grow.
And remember: trust in your circle will lead to trust amongst your customers. Three out of four customers say they are likely to stick with a brand they trust, even if another alternative comes along.