In startup culture there is a classic metaphor, attempting to describe one tenant in the relationship between a CEO and their Board…”no surprises.”
No surprises. The first time you hear it you go, huh. Then you start to hear it more and more to the point you’re like WTF does that mean? A startup by nature is one giant science experiment. You start with a thesis and then you test this shit out of it, day after day, week after week, year after year…morphing that thesis into a final destination. Not every thesis turns out to be correct but regardless, how can you have no surprises?!
I get it, the phrase is supposed to mean that by nature you should be transparent and keep your board abreast of any changes that impact their fiduciary responsibility. But that is not how the phrase is worded. Instead it’s worded as “no surprises”.
I have two little kids. When they decide to throw peanut butter covered apple slices across the room…that is a surprise. Even if you carefully place them on their plate, put a 6 foot tarp around the table, and sit with them…they still decide to throw their apples across the room. Why? Because they are experimenting.
Back to building a “no surprises” startup I do wish that phrase would be changed. “Be transparent,” or “Tell us when shit really breaks,” and/or “If you steer away from the perfect excel spreadsheet annual plan we agreed to, please call us.” That would be clearer.
Instead you read “no surprises” and you immediately return to your childhood and the experience of hiding the broken lamp because you forgot not to play soccer inside. You feel like a kid with parents who are disappointed in your results.
If startups are one team, Board included, it would be great if we could change the language to reflect that startups are one giant experiment There is no guaranteed outcome, just a series of tests. And therefore everything is one giant surprise.
Assuming this nomenclature isn’t going to changed anytime soon here are a few ways to manage that expectation.
1. Build Your Plan In Phases
Early on in a startup you have zero predictability and even less validation that your founding thesis is correct. Instead of building financial models work on defining the major phases of the business and what you want to prove to yourself with each phase. If you are your harshest critic then meeting everyone else’s “no surprise” expectations will be easier. And if you need help in making these phases, they all include “not running out of cash.”
2. Don’t Hype
Shit is going to go wrong. It always does. And if you are one to over hype the highs and ignore the failures, you immediately look out of control. Your Board will assume that the ship you’re steering is simple going up and down with the startup seas around you.
3. Don’t Be Emotional
Business is matter of fact, especially with a Board. If you take people’s money then you have a job to do…provide them with a return. If you don’t like this expectation then don’t take their money. Otherwise recognize that your job is to test and re-test until you find the successful path you promised. That path may be a different direction than what you pitched, but none the less it will be a path towards the return you promised.
4. Prioritize What’s Broken
Always start with the bad news. Hit it first thing in your emails, updates, Board prep materials, and meetings. Most importantly make it concise. The more words you use the more out of control you appear. Instead make the problem succinct, provide alternative directions, and your recommendation. And at the end you want to have a clear ask from your Board.
Above all, have the discussion at your next Board meeting about what every member expects from you and the leadership team. If someone says “no surprises,” ask them to clearly define what that means as there is no room for being vague.
Image Credit: By KoiQuestion [CC BY-SA 4.0 (http://creativecommons.org/licenses/by-sa/4.0)]