We’re currently invested in over 60 companies across Turkey and the US. With such a large number of startups, we receive anywhere between 30 and 50 emails each month where the founders of our startups share their latest progress and future plans with us. Not all companies provide an update each month.
Some update emails are short and some are long. The length of the update tends to depend on the founder’s personal style (some prefer to talk in person or over the phone rather than communicate through email) and how much of a deviation from the norm there is in a company’s performance or plans in a particular month relative to earlier months. The greater the change in course relative to prior months, the longer the founder’s explanatory update. If the startup is simply executing against a predetermined plan, the update may simply include the latest month’s numbers without any additional explanation.
This brings me to an important point. Numbers. I’ve noticed that there’s a positive correlation between the use of numbers in updates and the performance of a startup. When things are going well, founders want to show that they’re going well and numbers are a great way to do this. When things aren’t progressing, there’s a tendency to replace quantitative metrics (which would show the lack of progress) with a qualitative discussion about the great opportunities which the startup is working on.
Perhaps unsurprisingly, among those startups that continue to share their numbers even when their performance is stagnating, most are able to recover in the future. Those that don’t share their numbers when times get tough overwhelmingly end up closing shop a few months down the road.
This is likely because founders sharing their numbers even when things don’t seem to be moving forward signal that they believe that the actions (recruiting, product, marketing, …) they’re taking right now will improve the company’s future performance. It also shows that they’re holding themselves accountable for the company’s current performance, and this is the first step to changing it.