The life of a startup founder is full of uncertainty. There are often going to be rough patches , when nothing seems to be going well. In order to sail through the turbulence, the founder realises he needs to pivot, but is not sure what to do next . He may have lost his confidence because his earlier attempts have failed, and he is full of self-doubt.
At these times, a supporting investor , who has the benefit of having a 30,000 foot overview, can be very helpful .
However, sometimes you may disagree with the path which the founder wants to follow. The problem is that hard to know how to disagree tactfully. You don’t want to upset him, because it is his company after all. He is in the trenches daily, getting his hands dirty, while you apply your mind to his problems infrequently .
However, it’s important to speak up, because you do have a fiduciary responsibility to do so . I’ve realized that mature founders are quite happy to listen to feedback. They want you to question their assumptions because it helps them to sharpen their thinking. If they can answer your objections, not only does your confidence in them increase, their confidence in their own business model increases as well.
As an investor, you don’t want to take over control of the company – you have too many other things to do in your life ! You just want to be sure that the entrepreneur is being thoughtful; has considered all possible alternative options; and has a good reason for choosing the one he has selected. We all know that the future is uncertain, and whether his choice will turn out to be any better than yours is hard to predict.
We can all be wise after the event, but every startup is an experiment where N = 1. We can’t forecast what will happen, because they are complex adaptive systems, characterised by volatility, uncertainty and ambiguity.
It’s important to learn to be tactful when you disagree with the founder’s choice. You need to do it one on one , in a face to face meeting, rather than in front of other people, or at a board meeting. You need to find the right balance between being completely hands-off and allowing him to do what he likes (which is fine if things are going well) , or being much more hands-on when he’s running into trouble.
Of course, you can’t force him to do what you think is right. That’s a decision which he has to make for himself. However, if he’s responsive and responsible, even if things don’t go well after the pivot , you may still be happy to offer him a lifeline to help him recover from a near- death experience, which may leave him wiser , more resilient, and therefore more likely to succeed.