NEWCASTLE-UPON-TYNE, UK — Go to any startup event, anywhere in the world, and ask the company founders in the room this question: "So, how's it going?"
Nine times out of 10 you'll get a response like, "Great, couldn't be better" or "Amazing, things are crazy right now" or, my all time cringey favorite, "Yeah man, we're crushing it!" Just walk away from these last guys -- there's no hope for them.
So, I ask you, if nine out of 10 founders are claiming their business life is wonderful unicorns and beautiful rainbows, why is it that the old 80-percent-of-startups-fail rule still applies?
It's simple. Most of them are lying.
Many aren't consciously choosing to lie, they are just relaying to you how they want to feel, how they want to believe things are going. Possibly some are lying to themselves, but in most cases even as they are telling you all the good stuff, their brain is screaming: "What are you talking about? That PCB design is a mess, I'm pretty sure our subcontractor is planning to rip us off, and if I don't get some money in the door, like last week, I'll need to start applying to MacDonald's for work!"
How do I know they are lying? Because if you ask the same people, after the fact, why their company failed, they will usually admit that things had been bad for a while and that it was just a matter of time. But if they knew things were going south, why didn't they ask for help, change tack, or share their problems at one of the aforementioned startup events?
They want to tell you the truth. They want to tell you their woes, but culturally it seems it's not cool to talk about your problems. Indeed the confrontational and competitive nature of business means that it is a fundamental tenet that information is power, and sharing any significant company information unnecessarily is bad form -- and sometimes gross misconduct and a sacking offence. The result for startups is that it becomes them against the world, and they need to keep giving off the "right" impression right up until the moment it all crumbles around them.
All too often we are on the sell. There's the awful expression "always be closing" that implies whenever you are speaking to someone you need to be angling for a sale and so painting a rosy picture.
This, of course, is stupid and shortsighted. A startup company needs all the help it can get. And the one in 10 founders in the room who don't give the stock "going great" response have worked that out. They will tell you what is wrong with the business. They have realized that there are problems that they can't fix alone. More importantly they understand that by sharing they might get some help toward solving them -- at least a nudge in the right direction.
If you never admit to anyone the things that are going badly, then no one can ever help you. The point of networking isn't just to pick up sales leads or partnerships-- it's about speaking to people who have been there before you and solved similar problems, who may know someone who can advise you over a coffee or help you find new investors. If you never give these people a chance to get to know what's not quite working right, then you're missing an enormous opportunity to learn from others and benefit from their knowledge.
It seems to me that, while failure is lauded almost as an entrepreneurial right of passage, actually doing something to avoid that failure is frowned upon culturally. So next time you meet someone at an event or you grab a coffee with your startup buddies, don't ask them "How's it going?" Ask them instead, "What's your biggest challenge at the moment?"
You will have a much more interesting conversation. I can guarantee it.
— Simon Barker is chief technology officer of Radfan, based in Newcastle-upon-Tyne, England.