Understanding the Politics of Tech Startups

Many startups these days are started by young, technical or product founders who are in the idealistic phase of their lives and careers.

Thus I hear many talk about “radical transparency” when virtually every experienced operator in my inner circle talks knowingly about that naiveté. It’s not that I don’t love idealism – I was young once, too! – it’s just that the more experience you get in your career the more you come to realize certain truths.

One of the most common refrains I hear is, “I want to have a company with no politics. You know, no bullshit.” Ok, I ad-libbed the last bit.

But there is no such thing as “no politics” since we’re human beings and we’re genetically wired for politics. It’s called social interaction and understanding peoples’ motives, what makes them tick, who they don’t get along with, what rivalries exist, etc. is a very important part of being a leader.

It’s why I wrote a post outlining why the job of a CEO is often “chief psychologist” – especially if the company grows beyond 20 employees.

And it’s why many early-stage companies blow up. We spend all our time as an industry talking about “growth hacking,” “design principles,” or “product/market fit” and not enough about the most important skills for success – people management. It’s why I called out the importance of “executive coaches” in this post. Given how important people management is it’s surprising more of us don’t have group coaches.

Think about it – most of us accept the world of free-market capitalism in which of us acts as greedy individuals but the well-being is guided by an “invisible hand‘ the ends up maximizing benefits for society. Of course it sounds nicer to live in a utopian socialist society where everybody has the same amount and life is “fair.” But the reality of why socialism or communism don’t work is precisely because as human beings we’re fundamentally motivated by power and greed and thus those that set out to form perfect societies end up just controlling the resources and people for their own personal benefits.

I would argue that each individual team member of your startup trying to maximize their own personal outcomes (promotions, stock option grants, future resume successes, personal wins) produces better results for companies than pretending that we’re not human beings motivated by success.

Look at many of the high profile companies you know and you can trace some press coverage of high-profile blow-ups in team members

I talk about situations like these because they are the NORM not the exception. I call it “the Co-Founder mythology” and it’s persistent in our startup mythology.

Trust me – ignore startup politics at your peril. You need to understand power, ownership, leadership, performance, relationships, motivations, alcoholism, depression, resentment, jealousy, scorn. They all exist and ignoring them is like ignoring human norms.

Or as Hunter Walk aptly notes, “Execs Who Can’t Attract Former Coworkers Are Red Flags.” True. Politics at it’s rawest. Great people follow great people. If they don’t follow, you  know why – no matter what anybody spins.

I was thinking about this over the holiday.

First, I recently read the must-read book Hatching Twitter by Nick Bilton. I’m friends with several people in the book and I’m sure they didn’t love being written about – nobody ever does in this sort of book. And of course it’s impossible to re-create an exact history – especially since no individual actually really knows the “truth” or remembers everything perfectly.

But the book is a must read for entrepreneurs. If for not reason than no other book I have read about startups has so perfectly captured what it’s like when there is infighting, factions, disagreements, sexual relationships, power-struggles and lots of money at stake. And I can tell you from first-hand experience this is EXACTLY what goes on inside startups.

Over the break I devoured a book about politics called Double Down, which is an absolute page turner. It was written by Mark Halperin and John Heilemann and documents the 2012 election from the early GOP primary fights right through to the final outcome. It is written by two long-time insiders with first-hand accounts from the campaign trail. It hints at why Chris Christie was all too happy to turn against Romney in the final weeks of the campaign. It goes into salacious details about the inter-Mormon factions that fought between Jon Huntsman (senior & junior) and the Romneys. (the latter accusing the former of many things including not really being Mormon because John drinks wine and is socially liberal).

It is politics, relationships, money-grabbing and especially power-grabbing human behavior at it’s peak. It follows on from the equally compelling “Game Change” by the same authers, which I read years ago after the 2008 election. If you want to enjoy some old-time Clinton shenanigans or chortle at how crude of a human being John McCain can be or what a scumbag John Edwards is – this book is for you.

Me?

I love politics. Not the game playing itself. But trying to dissect human behaviors – good and bad. After all, every success and failure in business – as in sports – it attributable to how well we perform as teams.

Photo credit from NY Times.

  • http://www.justanentrepreneur.com Philip Sugar

    There have been attempts at this since the early sixties with William Gore at GoreTex http://www.theguardian.com/business/2008/nov/02/gore-tex-textiles-terri-kelly

    I think it makes people feel better. I know for a fact there is a TON of politics there.

    There are times when somebody needs to make a decision to move things forward.

    When you see the negative comments about money, and power its from people that don’t like being on the bottom end. Sorry.

    I know this is going to sound churlish, but when I hear the mantra I have to change management style, be radically transparent over and over it reminds me of when a young child keeps saying something over and over hoping to make it true.

    Sorry, I think that is a product of everybody gets a trophy. Last time I looked I am signing the front of the check and the person complaining is signing the back. Why is it I must change?

  • Javier Gonel

    “Trust me – ignore startup politics at your peril.” +1

    Let me recommend you a book: “Debt: the first 5000 years” by David Graeber, and even before that: “The fifth discipline” by Peter Senge.

    You could have avoided such introduction, and perhaps look more a the problem as a system and not as the first cause and effect.

  • http://TheTransitApp.com/ Joe Wilkinson

    To take this question a bit further. Is there a way to promote/reduce politics? Or direct them towards beneficial things? Is it pure “invisible hand” workings within the company, or is there a better way?

  • wfjackson3

    So Mark, what’s your favorite concept book for people management? I know quite a bit, but I feel like a tune-up is in order.

  • Erik

    “as human beings we’re fundamentally motivated by power and greed”, yes just like Nelson Mandela, Gandhi… oh, and was the name of that other one… ah yes, Jesus.

  • http://www.bluedeer.com/ Chris Bechtel

    Great stuff here Mark. I have experienced this myself first-hand. Much of it is due to human nature as you suggest and the need people feel to “cover their own ass”.

    I have found leadership coaches to be extremely valuable. Nevertheless sometimes, people are just not a good fit.

    How long do you wait to intervene in a company as a board member or investor when you see things going south?

  • romi

    Rather than social politics it would be prosperous to transform into social intelligence. Social politics in a company has more often than not destroyed the progress of the company as a whole.
    I can name at least 50% of start-ups playing social politics lose their main focus of why they came together in the first place and often go under.
    After seeing how companies work and the negative results forced me to start one of my own and I did it cleverly using private money and keeping a control on progress by using consultants. It is tough but doable.