Think like an investor: Psychological safety and its place in startup culture

Hustle. Crush it. Hypergrowth. Disruption. Do these phrases sound familiar? Commonly heard in the startup space, these words describe what we think of as the startup journey. Startups require people to constantly perform at their peak. This is “the hustle.” This is “crushing it.” These phrases glorify the startup journey, seeming to add a touch of glamour to the relentless pace of the startup life. But it is foolish to assume that this high-risk, high-reward scenario will not result in frayed nerves, high tension and the worst: a toxic work culture. 

Is a toxic work culture inevitable for a startup? Can a startup guard against it? The answer lies in psychological safety.  Also known as high-trust environments, team members in such teams are comfortable providing feedback or having disagreements without feeling their job security threatened. In a highly volatile and demanding work environment like a startup, psychological safety is one of the key contributors to building a successful work culture.

Back to Basics: What is psychological safety?

Psychological safety is a concept in group dynamics, defined as a “shared belief that the team is safe for interpersonal risk-taking,” and “being able to show and employ one’s self without fear of negative consequences of self-image, status or career.” It is one of the key aspects of effective team learning. Research shows that examples of team learning behavior “include seeking feedback, sharing information, asking for help, talking about errors, and experimenting.”

Psychological safety became more well known when Google released its findings of team effectiveness in 2015. It found that “the safer team members feel with one another, the more likely they are to admit mistakes, to partner, and to take on new roles.” Google also found that team members who feel higher psychological safety are less likely to leave, be more open to diverse ideas from their peers, bring in more revenue, and be rated as more effective. 

Why is psychological safety important?

In a high-pressure place like a startup, high-trust teams are important to keep the gears turning for growth. At the early stage, founders are likely to be embracing psychological safety without realizing it. Employee numbers are small. And if they are trying to build something, they have to be open to feedback to succeed. But as the startup grows and more people join, different viewpoints become more common. Layers of management start to emerge so the rapid growth rate can be addressed. It’s at this stage that building trust into the culture becomes crucial. By creating a safe space, your team will focus on collaboration and problem-solving, instead of being distracted by job security, incompetence or insecurity.


Building a psychologically safe culture - never too early to start! Here’s how:

1) Founders, be aware of your behaviour

Startup founders are unique among business leaders. Unlike executives in established companies, startup founders have to figure out their leadership capacity. They rely on the honesty of those who surround them to figure out what they are good and bad at. They have to be hyper self-aware about how they lead and have to be extra vigilant about the culture they are building.

As the company grows, founders are directly responsible for the engagement and morale of their employees. How they respond to unpleasant news, handle disappointment and give credit form the initial foundation of the workplace culture. By embracing feedback, leading by example, and choosing to problem-solve (instead of assigning blame), founders can lay the foundation for psychological safety early, and train the company to grow with this approach. 

2) You hired the best, trust them


HBR defines a successful team as a generative team. In such teams, leaders not only hire for cognitive diversity (this refers to the different ways that people perceive and process information) but also create an environment where mistakes are treated with curiosity and responsibility is shared for any outcome. As a result,  people can express their thoughts and ideas without fear of workplace retribution. But these environments are fragile and can be compromised in an instant, even with something as innocent as an ill-timed sigh.

“As a [startup] founder, it can be tempting to exercise influence on topics that you’re familiar with, especially if it has to do with the company. But founders need to be careful not to jump in too quickly. They have to allow people to do the work and trust the process. Founders should also not consider themselves an exception to processes such as appraisals.”  
Beth Samuel, Head of People, iPrice

3) Simply be human


Trust emerges when you know that you can be vulnerable without judgment or risk. The easiest way to create trust? Acknowledging the humanity in situations.

It is common enough wisdom yet it remains one of the hardest aspects of team building. Acknowledging the humanity requires empathy; it requires acknowledgment of the parts of ourselves that we don’t like seeing in a professional setting: our need for respect, validation, and freedom. However, recognizing these needs bring them out into the open, preventing them from festering and turning into hidden agendas.

Especially useful before any contentious conversations, one reflection exercise, “Just like Me” requires you to consider how other involved persons are just like you; Just like you, they have families, beliefs, anxieties, and needs. Going through this exercise forces you to embrace empathy before embarking on any contentious or heated argument, which will create a more conducive environment.


Further Reading
The two traits of the best problem solving teams

Smells Like Team Spirit

Why You Should Prioritize Psychological Safety to have an Innovative Team

The five keys to a successful Google team

What Google Learned From Its Quest to Build the Perfect Team

Teams solve problems faster when they are more cognitively diverse 

Video: Amy Edmondson - Building a psychologically safe workplace 

Think like an investor: When to invest in experienced hires

Alright, you are a startup founder. You might be working alone. Or you might have a trustworthy co-founder who understands your vision and work style. You probably have a small team of passionate people who believe in your vision and are tirelessly working to make it a reality. This moment in your startup journey is well, momentous. You could be ready to onboard your first experienced hire.

But first, definitions. Who is an experienced hire? An experienced, or senior, hire is typically someone who has deep industry knowledge and will also be directly responsible for the success of the startup. Depending on the startup’s stage of growth, this could be an executive hire or a technical expert. They should be hired to provide the technical or business insight that can move your startup to the next step.

Why hire at all?

As hard as it is to hear, being a startup founder does not automatically qualify you to run a business. While it is likely that they would be CEO by default, founders should examine their strengths and capabilities and be honest about in their business or technical acumen. Admitting there are gaps is not a sign of founder incapability; it is the opposite. It shows an understanding that business needs are growing and that guidance is needed if the business needs to push further. In the early stages of a startup, experienced hires can be trusted advisors and mentors. For a later-stage startup, they can be the trusted right-hand.

Pei Ru, founder of Singapore AI chatbot startup, KeyReply, views experienced hires as a way to plug the knowledge and execution gaps that startups typically have. She points out that experienced hires bring much-needed knowledge of processes and documentation, saving time and resources for startups, who can avoid the pain of figuring out everything from scratch. Shieny Aprila, founder of Indonesian gaming startup, Agate, echoes Pei Ru’s sentiments, “Their feedback gives us a different perspective as it is from someone outside the company. They do not hesitate to challenge our strategy or decisions. This helps us see what needs to be fixed.”

hans-peter-gauster-3y1zF4hIPCg-unsplash.jpg

Early-stage startup: If you are still searching for a business model or figuring out your product-market fit, hire a technical expert. A technical expert with deep domain knowledge will help you understand the market you are trying to penetrate. Having encountered the sheer number of technical problems in their career, their depth will be valuable in solving problems, streamlining inefficiencies and will be a trusted reality check on your strategy.  

Later-stage startup: If you are ready to secure more funding or bring in bigger deals, hiring an executive is the sensible next step. This expert can help scale the team from single digits to double digits, help negotiate complex deals and open up the right doors to build investor relations. They can also be invaluable as your startup grows bigger, where their experience with scaling up will guide your startup during decision making.

Treat them like an investment

Treat experienced hires like an investment, in every possible definition. While you are evaluating them, invest the time to know them better. “We meet [experts] many times, share updates, exchange ideas, and where appropriate, talk about things outside the business. We get a good understanding of their values and more accurately know if this person will be a cultural fit with the rest of the team,” Shieny shares.  For Grace Sai of Found8, she was clear that these potential hires need to show they can be their best in a team that was diverse in age, gender and culture. “We do many reference checks - up, down and lateral. We would find out if any millenials reported to them.  And most importantly, we would ask all the referees whether they would work with the hire again. If there was one ‘no’, we would seriously reconsider.”

If there is significant interest in this hire, it’s a good idea to evaluate whether they are a short-term investment or a longer-term investment. For startups that don’t have an established business model, the short-term investment is probably the more feasible route. “During the trial period with our current CMO we did everything together from important client pitches to fun conversations over long outdoor runs. Without the trial period it is difficult to understand if someone is a good culture fit until you interact with her on a day-to-day basis and deal with adversity together,” points out Kyle Wong of Pixelee in his advice to startups on hiring.

Early-stage startup: One of the most important principles of startup hiring is this: Hire for the now. Hire someone only when you are clear you need them. Experienced hires are worth every penny, but it’s for you to decide when to spend those pennies. If a product-market fit is elusive, consider working with a highly motivated director or bring your executive hire on as a consultant. At this stage, managing the burn rate is a priority and the worst thing you can do is hire in anticipation of expansion.

Later-stage startup: Watch out for an enterprise executive who thinks he is a startup executive, The executive skillset to scale a startup is different from what is needed at an enterprise. (Bigger companies typically need skills like organizational design, prioritization and process improvement.) Invest the time evaluating them and ensure there is a cultural fit. Secondly, the lure of a startup for an executive hire who is ready to roll up his sleeves is hardly going to be remuneration. But for you, having an executive on the payroll is a big expense. Don’t be intimidated; for the appropriate hire, that investment will accelerate your growth.

 

Does experienced hire equal C-suite?

Most experienced hires that join startups tend to be C-suite. But this is not always the case. (Meet Patrick Mckenzie who is a “Senior Individual Contributor” at Stripe but has run 4 companies before joining the company.) Whether or not a startup needs someone from the C-suite is a question of function.

Teo Pei Ru, CEO of KeyReply

Teo Pei Ru, CEO of KeyReply

Rather than investigating or being awed by a potential hire’s C-suite qualifications, startup founders should be single-mindedly looking for fit. Pei Ru shares her experience of working with a senior hire who had never worked in a startup environment. “Even if they claim to be adaptable, it is still not easy. We worked with someone who used to work for MNCs. But what works for MNCs doesn’t necessarily work for us. We had to do a lot of alignment and there definitely were disagreements along the way.”

 

Words of caution when exploring fit: Don't confuse the job title for what you need. As we briefly saw earlier, a “VP of anything” in a big company would have a very different job scope than a “VP of anything” in a startup. Seasoned venture capitalist Steven Blank points out that, “...titles in an existing company reflect the way tasks are organized to execute a known business model while in a startup, it might imply searching for a business model.”

It is valuable to distinguish whether the expertise you are looking for is intended to:

  • search for a model,

  • execute on a model; or 

  • scale the existing model. 

Use job titles that define what you are looking for, not about how good they make your startup look.

Parting Words: Let them do what you hired them for

Founders, we get it. This startup is your life. But the reason for bringing in an experienced executive is so you can focus on what you do best. Delegate; let them prove why you hired them. By integrating them ruthlessly into your startup, you can also quickly assess their capabilities and decide if they are still the best option for you. And if they are not, parting ways painlessly remains a realistic option.

Startup Supermoms

Being a mother is hard. Being a startup founder is also hard.

What happens if you are a startup founder who is also a mother? Is that doubly hard? Does it change depending on where your company is? Does it get easier? Okay, we know the answer to that one: No, it doesn’t.

In honour of Mother’s Day this month, we spoke to two startup founders, also mothers, who are at different stages of their startup journey. Based in Malaysia, Goh Ai Ching is the mother of a lovely girl and the founder and CEO of Piktochart, a web-based design tool that helps non-designers create visual graphics for the web. At the other end of the world nestled in Los Angeles, California is Amy Wan, mother of a baby boy and founder of Sagewise, a startup that leverages blockchain to create safer financial technology.

Startups and Motherhood: Are they similar?

After all, they are both long-term investments. Many have described that launching a startup is like giving birth. But both Amy and Ai Ching never thought to associate one with the other.

“They are similar because they are always growing, always evolving, always changing,” muses Amy. Ai Ching weighs in, “You pour everything you have to make it grow and you want it to go out into the world and spread a little bit more of goodness. There's a lot of tears, sweat and nobody will ever see or understand the hard work or sacrifice that go into growing both.”

Prior to having kids, I always thought raising capital was SO hard. But it’s not hard. You know what’s hard, having a newborn! You think it’s bad when a hundred venture capitalists reject you. No, it’s bad when your newborn rejects you!
— Amy Wan

Amy was pregnant when she was raising capital for her seed round. She closed two months after giving birth. She recalls, “Being pregnant gave me courage because I had nothing to lose. I was a solo, non-technical, pregnant, minority female; I didn’t know how much more ‘un-investable’ I could get. In my previous startup, I had a very reasonable business model and I was very grounded as to what I thought I could achieve. When I had this idea [for what is now Sagewise], I tried to convince other people to do it! But it is such a moonshot concept that others were reluctant to do it--so I thought I might as well go for it.”

Startups and Motherhood: Lessons from each space

Ai Ching points out the importance of boundaries in parenting and professional relationships, “As a mother, I've learned that discipline is necessary. We draw the boundaries and tell her what is right and wrong. But if there is too much "positive talk" and rewarding, the child may think there are no boundaries, even in life. If there is only berating, the child will grow to resent the parents. It's important there is a balance of both. It's no different when dealing with adult and work relationships.”

She explains how running a startup has tempered expectations, “Startup life has taught me to put my best foot forward every single time but not to be disappointed if the outcome is not what I want it to be. Likewise, I have learnt that I cannot expect my daughter to fall in line with who I think she should be.”

Startups and Motherhood: Is this the best time?

There is no doubt that globalization and the internet have made it easier to be a startup founder and a parent. Ai Ching noted how remote work and distributed teams have become more socially accepted.

Mothers can now choose how much time they want to dedicate to the business and family and actually make it happen.
— Goh Ai Ching

Amy is careful to state that this doesn’t mean that every woman should go running to launch a startup. She agreed with Ai Ching that for those who are inclined, it is one of the best times.

The women’s movement is strong. We have the internet, social media, co-working spaces and communities. It is easier to work remotely and lots of startups that help start startups. If you want to start a venture, it has never been easier.
— Amy Wan

At the same time, Amy highlights her own recent experience as an example of the struggle of being both founder and mother, “As an early stage startup founder, I didn’t have the luxury of maternity leave. I had my baby on a Sunday morning and I was back on conference calls on Thursday. There were certain things I had to do for the survival of the company. It probably took several years off my life and I don’t feel like I was able to enjoy my time with my newborn as much as I’d have liked. I did what I had to do, but I would not recommend it. My situation was particularly crazy because not only did I have a baby, I was raising a seed round, we were moving houses, and we had to remodel the new house. A more ideal situation would be to get the company to have good product-market fit, strong revenue, and good leadership  so that I would be able to step back for maternity leave--but we were so early stage that that was would have been detrimental to the company.”

She adds, “There are all these preconceptions about being pregnant. Men who are fathers remember how pregnancy was for their wives and they draw conclusions about your experience based on theirs. But each person knows their own potential and limitations. It’s not for anyone else to judge a woman based on a condition like pregnancy. Only she can decide what she wants to undertake and whether she is capable of it.”

Startups and Motherhood: The support network

As a founder, the company’s survival is in your hands and as a parent, you don’t want to miss out on all the important moments of your child growing up. Constantly choosing between the two is not realistic. So how can a startup founder and mother be both roles?

Amy and Ai Ching are quick to point out the immense importance of having a support network, which could also be family and friends. Ai Ching defines a support network as those who can understand and help take care of the child when needed. Typically, this role is filled by the immediate in-laws, family members, and friends. They are both also realistic and candid about needing external help. Amy had a confinement nanny (zuo yue zi) in the first month after birth and then an au pair. Ai Ching relies on a babysitter who accompanies them so she can see her daughter whenever she wants. Amy calls them “the backup to the backup.”

Both agree on the importance of having a network of mothers, whether in-person or online. “Having friends who are working mothers is good for the soul, really. When we meet up, we realize that the problems we go through are similar, just in a different flavor and we learn from one another how to overcome it,” says Ai Ching. “Creating the emotional networks is important because things happen,” says Amy, “I am in many ‘mommy ‘Facebook groups but it probably took me almost a year to find the right group for me; to find a tribe of other like-minded mothers.”

Running your own company has its perks. Ai Ching counts herself fortunate that she could have a nursery in her office for her daughter. Amy also counts her blessings as her co-founder is also a parent. “He understood that I didn’t want to immediately travel after my pregnancy and took over my speaking engagements. In fact, he is the other mum at work. We talk about parenting all the time, which is very helpful emotionally.”

What about the spouse? Amy cheekily states, “Obviously, I would love for him to do more!” but goes on more seriously, “I knew this but it really hit home recently that whom you marry can be one of the most important decisions in your life. He believes in me and is super supportive of what am I doing. That alone means a lot. I can travel for a conference because he is willing to give up a bit of his sleep to look after the baby. A lot of it comes down to communication. I see in many other couples that this is not the case.”

Startup and Motherhood: It can be done

And the way to do it?

“Deliberately make time for them. I don't think there's any other way!” smiles Ai Ching. She is emphatic about the need to carve out family time. “My husband is from Italy and we travel back twice a year. Yes, we are often still working. Each time, we could have decided not to go because there are lots of things going on. But we choose to go because there is no other way to make time for family otherwise.”