Startup therapy: fix a blow to your momentum by using tension as fuel

One of our Friday Town Hall Meetings, where we discuss anything anyone wants. And where we fixed our momentum.

As a startup founder, you’ve either been there or will soon: a slump in your growth. It can triggered by growing too fast, a key team member leaving, a sudden market change, or losing a big customer. In any case, you need to face reality and get back on track.

After leaving Springest, I’m now investing in and coaching other startups. One of them is going through a rough patch, so I thought I should recount how we dealt with such a time a few years ago. Here we go…

Our CTO left the company to work on his own startup. He was my main confidant, and had lead the effort to rebuild our entire architecture. At that time we were a team of 25 people, working on Springest for 7 years. Our goal was to become the world’s biggest marketplace for professional learning and the leading SaaS platform for organisations to empower their employees’ learning.

The person leaving us was a huge blow. In hindsight, it also wasn’t that big of a surprise. He seemed to slowly lose motivation and we had talked about that a few times. We agreed to take some time to figure out how to fill the gaps he would leave. This part turned out to be fairly easy because of the quality of people we already had, and the clarity in roles that Holacracy brought. But I also asked him to be very critical in his last months, to share any and all doubts he had with the team. We could only learn from that, right?

🤕 Well, he did, and it hurt…

Confrontational therapy: put it out there

Every week, Tinypulse sends out a question to everyone in our team. One recurring question is “How happy are you”. We share the answers with everyone without any curation, so everybody could read how our soon to be ex-Springeteer felt:

We haven’t disrupted our industry, we’re focussing on the wrong things, we’re lucky no other startups did what we should’ve done yet, and we’re on a slowly sinking ship. My work-happiness is at an all time low: 4/10.

Some people asked me about it in private via Slack, they felt it was too harsh. I felt a bit betrayed too, but was confident our colleagues would be able to make up their own judgment based on reality. So I immediately put the “sinking ship” on our Friday Town Hall Meeting agenda to have a discussion about it, making sure everybody noticed the comments. I also posted a public note on Tinypulse to make sure everybody knew he’s already quit, to give it some context.

Group therapy: let it all out

So, in the town hall meeting with the comments on screen, I asked him to explain his remarks in more detail. That brought some nuance and context. Then we asked everyone for their reactions. In hindsight I would’ve liked to use Holacracy’s reaction model where everybody gets some safe space to react without any discussion, but we did this “popcorn-style”.

Some people expressed sympathy. Especially the newer people who felt that our purpose feels a bit less shiny after you’re working on it on a daily basis. Definitely a wake up call for others: if they felt like this, were we betraying our mission? Or was this merely the messiness of reality?

Intervention: look on the bright side

Being data driven and ambitious, we naturally point to things we think should be better. But it takes more effort to celebrate successes and notice the things we did change.

We have introduced many new things to our “old school” professional learning sector. Even though you and me are already used to all kinds of online tools and of course e-learning, about 85% of professional education in Europe still happens in classrooms, and it’s offered by for-profits ranging from big corporates with tv-campaigns to freelance coaches & trainers. We’ve pushed this sector to act more transparently towards consumers, for example by forcing complete clarity on pricing. Our performance based business model has given us stable profitability even though everyone thought it couldn’t work in this sector.

I mostly let others do the talking here, but also felt it was needed for me to jump in and point to these successes. Just like the bigger bets we’re making currently that we believe in and show signs of validation. I tried not to sound too zealous, but rather just mention facts from different parts of our business. People tended to forget that many things were very different before we came onto the scene.

Be firm, face reality and share truths

Luckily I didn’t have to do this part on my own: other people gave examples where the assertions were just plain wrong. Since we’re profitable, growing and have enough money in the bank, we’re surely not a sinking ship. We concluded that, at worst, we might be on a slippery slope. Good to get that out of the way. And we had our “investor KPI sheet” with our most important numbers on the screen to focus on data, not opinions.

The professional learning sector is extremely fragmented and therefore hard to change. The startup graveyard is full of learning startups and even the most well-funded over-hyped startups in Silicon Valley have had only moderate success in disrupting it. Look at Knewton’s recent changes or Udemy’s rounds of financing: both received $100M+ in funding, are awesome examples for anyone in EdTech but are no AirBnb or Uber (yet).

This is not a matter of us being lucky nobody beat us yet: we have had quite some success already because we did a better job. And the fact that many “old” ways of learning still exist doesn’t mean we haven’t also disrupted many things. The fact that BMW is still selling cars doesn’t mean that Tesla hasn’t disrupted their industry either. It has forced them to change, and so have we.

Take the matter into your own hands: let everyone come up with solutions

Where there’s smoke, there’s fire. So we were definitely not going to let this chance slip by to improve ourselves. Many people came up with things we should do that we weren’t doing. In every case, these were things we wanted to do for a long time, but we chose to focus on other things that seemed to have more short term leverage.

We realised we should listen to our end users even more, to find ways we can actually help people figure out what to learn. We also noticed we often focus on growing short term numbers over playing our real end-game. We are so good at growth hacking we do a bit too much of it, maybe slowing down our longer term growth by postponing our more audacious projects.

All this discussion upped our sense of urgency. This fuels momentum: the most important concept for every startup. So how do we leverage that, coming from this seemingly negative side note in our recent history?

Take action: put your OKRs where your mouth is

After this town hall I heard people say “whoa… this was one of the more intense meetings we had in a long time”. And it was, everybody was really involved. As always I was happy we recorded the entire thing to share with anyone not present or not hired yet.

I tried to make sure we ended on a positive note, to capture the momentum, by pointing at our current Q3 OKRs and how today’s discussions can feed our Q4 OKRs. We’ll focus even more on playing our end game, on doing what we believe in by addressing the hard to change things in our industry. I hinted towards some concrete examples of this and tried to connect that to what we’re already doing.

In case you care about learning (boy, we certainly do! ;)), it means we have focussed a lot on the “transaction” part of learning: how people find, request information, choose, book / buy and evaluate learning products. This is needed to be able to change the “data” part of our purpose: broaden the types of learning products so that it becomes more habitual and intrinsically driven. This follows from our mantra that Supply follows Demand and not the other way around.

So, it all comes down to this 1 step plan…

At the start of this phase, I felt my urge for transparency and hunger for criticism finally bit me in the ass. But I actually just needed the energy from the team to realise what we should do: use it to our advantage. We regained momentum. We later looked back and realised that stories of startups only in hindsight look like clear successes of disruption. In reality, it’s a lot of hard work and there’s lots of dips along the way.

When it gets hard, just remember to turn the tension into fuel…