Episode 3: Welcome to ‘Triage Month’
Everyone in the tech startup industry is about to start practicing triage as they struggle to keep customers, jobs, functions, teams, companies and investments alive. Your awesomeness isn’t of value right now. Your survival behaviour is.
I’ve spent a lot of time in the past two weeks trying to help startup founders I know prepare to save their companies from the economic and societal effects of the pandemic.
I don’t say that because I want to be thanked. I have a rule where I must blog about any advice I give to three or more founders. Here is that advice:
“Beware the triage process”.
Wikipedia says Baron Dominique Jean Larrey (French: [larɛ]; 8 July 1766–25 July 1842) was a French surgeon in Napoleon’s Grande Armée and an important innovator in battlefield medicine and triage. He is often considered the first modern military surgeon.
Triage is what you do when you have insufficient time or resources to save everthing or everybody. It involves evaluating those who need saving and categorising them:
- Those who are likely to live, regardless of what care they receive;
- Those who are unlikely to live, regardless of what care they receive;
- Those for whom immediate care might make a positive difference in outcome.
It’s not just medical professionals who perform triage — we all do it when we’re short of time, resources, and options. You might do it unconsciously when deciding which of the leftovers to reheat and which to put in the compost bin. Or you might do it when you’re deciding which work email to answer next. Or as an investor, customer or supplier, you might do it when deciding which startup to try and save.
If you let triage happen to you, it’s more likely you will be unfairly labelled a lost cause than worth saving, since the odds of retaining a job, a team, a departmental budget, a business or an investment are really quite low. Many must be let go in the next few months.
But my startup is awesome!
I’m sure it is, and I’m sure you are too. But consider that we tend to encourage a positive “succeed against overwhelming odds” mindset in startup founders that can sometimes mean you believe your own pitch a little too much.
Yes, some of the most valuable startups in the industry were founded in a downturn.
But some of the most valuable startups in the history of our industry fell over during those same downturns and never got back up.
Don’t waste another moment
If you decide to improve your chances when you’re being evaluated for triage, you need to respond like an effective leader should in a crisis.
And you’ve got to do it now, before everybody else does. Every other startup founder in an investor’s portfolio will be emailing and calling to ask about an emergency bridge round, or closing at a lower valuation, or even just to ask for help and advice. And no investor has time or the means to help everybody.
Prof Galloway says, in times like these, your startup’s best odds of survival in a crisis rely on three principles:
- Top person takes responsibility;
- Acknowledge the issue; and
Since you may not get a second chance, it’s better to risk overcorrecting. (There are rarely penalties for overcorrecting and even when there are, they are dwarfed by the penalties of under-correcting.)
Build trust if you don’t have it, and lean into it if you do
If people (team, customers, suppliers, investors) trust you, they will follow you further, make bigger sacrifices, cut you bigger breaks, and decide you’re the portfolio company most worth working to save when they’re doing triage.
Trust isn’t hard to build — it comes from telling people the truth. Your parents will confirm that you’ve never been as good at lying as you think you are, and in times of crisis, people have their Bullshit Sensor turned up to 11, so don’t even try to varnish your truth. Serve it processed but wholemeal.
Top person takes responsibility
Your CEO should contact all your investors, suppliers, customers and team. Speak to as many of them in person as you can (mass communication dilutes trust) but remember speed is of the essence. Then painful though it will be, provide further updates as the situation develops.
Acknowledge the issue
Spell the current situation out clearly and openly. Tell people what the true worst-case scenario is. Tell them what they’re likely to lose if that happens. Encourage them to choose you as the startup they want to help save.
Share a plan with them that goes further than you (and they) will think is necessary. Explicitly make it clear what they can do to help avoid the worst-case scenario — make it clear that you need their intervention in order to survive.
Show them how, as a leader, this will impact you personally — what you will be doing without, specifically how you will be taking on added responsibility, who else you are counting on for help, and who’s counting on you. Pretending you’ve got this, that you’re the rock in the crisis, is just going to trip off the Bullshit Sensors in the people you need to believe in you.
Pay it forward
Your customers and your team will remember the little things you did for them as the crisis really begins to bite hard. Offering to help and showing that you care before it’s required is an essential part of showing everyone you’re over-correcting.
You may see nothing in your dashboard to suggest you’re about to suffer your biggest month of churn ever but now is the time to get ahead of it and offer your customers some kind of meaningful thank you for their support.
In a time when everybody’s counting every dollar, offering someone a discount for a new purchase is the opposite of what you need to do. Offer them something that helps them extend their runway, whether that’s in the form of a few months’ free access to a SAAS subscription, or a $10 pre-paid VISA card, or free personalised advice on how to reduce their cloud hosting bill, even if you’re not in the hosting business yourself.
Being open and honest about who your business has to let go and when is merely the baseline in crisis leadership. You’ll be considered favourably for triage if you can show stakeholders that you’ve made cuts soon enough to allow you to offer people more money than the required minimum payout, if you’ve helped them by advertising their skills and experience to the audience you reach, and if you’ve made personal introductions on their behalf to companies which are still hiring.
Runway and trust
Sufficient runway and trust are all anybody cares about in a crisis. Can I trust you to live up to the deal we made? Can I trust you to keep increasing your revenue a little each month towards break-even? Can I trust that your SAAS platform won’t fall over and risk my business‘ survival even though you’re cutting support options and offering me a discount? Right now…
- Top person takes responsibility;
- Acknowledge the issue; and