I often feel like an unofficial cheerleader for founders in my portfolio, providing encouragement whenever an update hits my inbox. "Keep up the great work!" "Way to go!" "Awesome win!" It's entirely sincere: I want them to know I read their notes, share in their enthusiasm and remain excited about where things are headed.
Being positive is easy. When all is well, you graze over the small setbacks and often see only the vast opportunity ahead. Your team, your board, everyone is incentivized to maintain laser focus on the goal that seems so shiny and attainable.
Pure optimism though is poison, and the most savvy leaders know it. By purpose or by chance, the best management teams I've encountered challenge each other daily, the best board members couple every plaudit with a probe and the best investors want to hear about the bad even more than the good.
The first startup I ever watched fail spent its short life only ever communicating confidence. This was a guaranteed success - awesome advisors, a lavish launch party, great press. When KPIs were lagging and occasional questions were raised, responses were vague or problems were glossed over, but it was fine because, hey, this product was solving a huge problem! Keep at it, things will catch on. In a sea of yes-men, no one saw the bottom falling out until the bank account was empty.
You should want holes poked in your logic. You should relish when flaws are noted. You should feel emboldened when proven wrong. No one sees his own weaknesses; they reveal themselves only when a seeming adversary points them out and forces you take note.
Surround yourself with people willing to disagree with you. Author Kim Scott, a former Googler who advises companies including Dropbox and Twitter, believes the strongest tool of both a leader and all those around her is "radical candor" - the practice of both caring personally and challenging directly.
Those who care most are actually those who are unequivocally critical, immediately, with those around them. Radical candor ensures that deficiencies are recognized, be they over confident assumptions in your revenue model or a bad hire, and that good decisions can withstand judgment.
Truly honest communication, amongst peers, board members or up and down a reporting line, can only exist when defiance is not only an option, but encouraged.
Between lackluster IPO markets and fewer fund closes, many are predicting a challenging year for startups for whom growth momentum was strong and endless capital seemed so recently available. Behind the closed doors of every investment pitch and every board meeting, "profitability" is the conversation de rigueur, and spending rates are being carefully dissected.
When markets pull back, some leaders wonder what signposts they may have missed that could have warned them pipelines might slow or volumes would level off. The smartest leaders had those markers highlighted to them by those willing to step in the ring as a valuable opponent, helping to steer the business straight.