How do I handle a crisis without blowing up my deal?

CEOs should stay out of politics. I've never met a CEO who wakes up in the morning thinking, would they donate to President Trump's inaugural committee? >> You are the crisis management expert. How do you go from being the worst first impression to at least 50% of your employees, then recover from that situation? >> When you are faced with a hard and controversial decision, you're not going to make everyone happy. >> Why did you choose to get into the most complicated point of someone's life? If you make one decision and investors are pretty happy but a group of employees goes absolutely crazy, can you afford that dynamic? It's not a question of should we get into politics or should we not. It's a question of when you are forced to make a decision are you making the best one that supports your employees and supports your market position. So, two that come immediately to mind. One is not the first one is not a deal, but it was um a new CEO of um a private equitybacked um startup, preipo startup. Um kind of a professional CEO. He had been in that role at a couple other companies, was recruited and brought in to, you know, help the company graduate and move toward an IPO. and he was brought in and uh recorded kind of a fun intro video um introducing himself to the team and it was a pretty big company right so as opposed to getting everyone in a room and saying hi I'm you know your new CEO there needed to be a bit of like let's do something that can be seen in various offices and he someone on the marketing team came up with the concept um which he basically did blindly and and got back a final cut basically when everyone else saw it. And it was um like super sexist. Um just unbelievably bad judgment and how it was cut. And not only did a lot of employees rightly have a big problem with it, but they connected it with their new CEO before they had even met him. Um so he was in damage control internally from day one. Um right. And um you know to me uh it's a really important reminder that two things. Number one, you can find yourself in crisis in the most unexpected ways. I mean no one could have predicted that. Number two, often it's not your fault. Uh it's unforeseen. There's nothing you can do about it. But also kind of this idea that what really made that hard for him was um he hadn't had the chance to build up any credibility, any currency with his team. Um, so he didn't have the benefit of the doubt, which is why when that video came out, people blamed him. And it's he couldn't have changed that because he was new and it was a weird scenario. But I think it's a really good reminder to always think about, you know, putting the currency in the bank, right? Always thinking about your reputation because when a crisis comes, you want people to give you the that benefit of the doubt. >> Um, >> that's painful. >> He recovered. It was fine. And it was a painful couple weeks, but it wasn't. >> How does how does someone recover from that? How do you how do you go from being like the worst first impression to at least 50% of your employees to then, you know, coming out of that? Like how do how does someone recover from that situation? >> Because the truth of the matter is I think there is this mythology around crisis where you can, you know, hire a consultant or you can kind of weasle your way out where if you actually did something wrong, if you make all these moves in the background, you can figure out a way to overcome it. The truth of the matter is most of the time if you genuinely didn't do something wrong, um you're going to be okay. If you genuinely did something wrong, there's almost nothing you sorry, there's almost nothing you can do to recover from it. But the reality was that he was genuinely the victim of a circumstance. And while people's initial impression of him was negative, he could explain it, right? The the facts were on his side. And so and he was genuinely a good guy, so people were willing to give him a second chance. >> Yeah, it sucks. at the like just watch the raw video, watch the hour of uncut footage. It's okay. >> Exactly. Exact. Also, you kind of can't get out of that without blaming Right. without blaming someone else on the team, which you never want to do. >> Yeah. Exactly. >> Um the other story I'll give you, and this is one of my favorites, is I was working a few years ago with um a company that was about to IPO. It was a spa uh during the Spa boom, which Jason, you know, a little bit about >> little bit. Um and uh they um as as you know probably not everyone knows in order to IPO a company needs to get a formal approval from their shareholders. Um now the problem we have is companies that have significant um individual ownership versus largely institutional ownership. often it's hard to get a quorum for anything because you're asking people who bought a few shares on Robin Hood um times a million to actually participate in this proform vote. Um it was the night before they were IPOing. Uh we were in New York um ready to ring the bell. Um hold up in a conference room in a in a hotel kind of a war room we had set up and overwhelmingly the votes that had come in were going to favor the IPO. No one was opposed to it but they couldn't get to the quorum. Um, and it was on a knife's edge. So, we went into this mode of I mean, this was enough years ago that some of the tools we had were a little bit blunter than the ones we might have today. But, we were buying banner ads on Yahoo Finance just to sort of find those individual, you know, retail investors. They were working the phones. The CEO was calling every bank, every institutional owner. Um, and we were just doing everything we could we can to uncover enough votes uh to get the thing. And it was like, you know, if you needed 51%, they were at like 49.8. And we were marking every cluster of shares that came in and voted, they made it. But man, up until literally the night before the IPO, there was a real chance that we were going to have to pull the plug on it. >> Wow. And it's just because they had such a diverse stockholder base of retail tra I guess before the before this back, how do they acquire so many retail investors? There's a period where because it's a it's a weird quirk, right? Where the spa is investable. So you actually can invest in a company as part of a >> spack. So it's a spa approval of the acquisition and got it. Okay, that makes more sense. Um yeah, everyone's got their like $10 share of the spa and you know hoping for the >> and it was a company that was buzzy enough and in an industry that retail investors had some interest in. And so there were a lot of kind of quirky dynamics that made something that for 99.9% of IPOs was totally standard practice uniquely difficult for them. >> And was it literally like a margin of error of like.1% like 51.1 kind of thing or did it like pick up steam towards the final final? >> No, it didn't pick up steam at all. I mean we crossed the threshold just before midnight and it was you know like a handful of thousand shares uh over the over the finish line. Because at that point, is it worth just like someone buying 10,000 shares that's already on the cap table and just like pushing it through? >> It would have been, but you can't do that. It was first of all was after hours. You can't do that and vote um you know, at the same time. >> But we were thinking about all of those different things. I mean, it got to the point where um I was a very very tiny shareholder um and I was on their list, right? Like I was on the list of people the CEO was calling because it was just all hands on deck. >> Wow. That is uh that's this is going to be so nailbiting like you know you finally have this glorious moment of an IPO like getting on you know getting listed work so hard and then like you're hurting cats to like to the end degree like most founders in private companies like they struggle chasing like the 10 angels that invested in them like 10 years ago. But, you know, trying to find anonymous retail traders on the internet, that's uh that sounds hard. >> It is very hard and um and not something we'd ever done before, which points to another point. The thing about crisis is um often it's a thing you couldn't have possibly predicted. So often it's less about, hey, let's dust off the playbook from the last time this thing happened. Um, you know, the story I told you about, you know, the CEO who made that video or the story about the the spa, no one had done exactly that before. Maybe versions of it, but in those cases, it's really about building the pattern recognition to be able to make good, calm decisions faced with a lot of uncertainty. I think that's a lot of what we'll probably talk about. >> Yeah. And like you know David for for context uh for the the audience listening here like you are the crisis management expert. You've worked at the highest levels in government. You've worked uh for Citadel and Bloomberg and other top companies you know across the the country helping them navigate complex crisis. Um when it comes to your frameworks on as you say like you don't know what's going to happen. You're going to get blindsided. uh how what's the best way for a CEO or founder to be able to protect like protect themselves or just you know prepare themselves I should say for the unpreparable >> before you ever face a crisis you have an opportunity to think about managing your portfolio to inoculate yourself for what may come um and I will say that I mean I work with CEOs who are you of an older generation who tend to be a little bit more comfortable with the public profile part of the job. I'd say um by and large a lot of the founders and CEOs who are coming up now building companies, maybe looking at a transaction or an IPO, um they tend to have a little bit of a different perspective. It may be because they came up as more of a product person more on the engineering side. Their focus often is on let me build the best product, let me find uh the right customers, let me scale it, uh let me improve it. Um, and thinking about how you talk about yourself and how you talk about the company in the world is often an afterthought. And I think in many ways that's the right thought process. There is nothing wrong with that. That those are the basic building blocks to how you build a good company. But I also think that when you look at the CEOs in the world who really get way laid when a crisis hits, often it's the ones who haven't invested in building some credibility um inoculating against um future crisis by conveying to the world uh to investors to employees that um you know basically you're trying to do the right thing. You're driven by values. You have a good perspective. um then when a hard moment hits, people tend to rally around you. It's human nature. >> And when it comes to like your experience, you know, you're you're there at the table to to mitigate and find a way out of the situation or turn it around, spend it, whatever it might be. What's a story where a deal is getting done or like, you know, something happened and a deal blew up due to a crisis? What's a story that you might be able to share around that front? There are so many examples, Jason, and I can think of um ones that are tied to politics. Uh for example, um during um during COVID and uh during everything that happened, the aftermath of George Floyd, CEOs were often pulled into um taking political positions in ways that were uncomfortable. Um, one of the things that I will always advise a CEO is when you are faced with a getting involved in a hard and controversial decision. Um, you're not going to make everyone happy. You have to map your stakeholders in some cases, prioritize them, but understand that at the end of the day, there's probably not a perfect answer. And that is a little bit of the mythology around crisis. Um, rarely can you come up with a plan that will make everyone happy. Typically, you're choosing between bad options and you're choosing the one that will cause the least amount of damage to the stakeholders who matter most. That may not be satisfying, but but it is the reality. And so, um, one of the things I always tell the CEO is know that if even if you make the right decision, you're going to get some blowback. uh a CEO of a big company who um shared some thoughts on uh the Middle East conflict um which is obviously a third rail kind of issue. Um >> took a position that was very thoughtfully crafted uh but then received several emails from employees pushing back on the position he took. That was inevitable because there is no happy middle ground on an issue like that that satisfies everyone. My response to him was don't focus on those few angry notes. You got focused on the fact that out of thousands of employees the vast majority u stayed silent which in that case was a sign of support or at least understanding your position. Uh similar example um a few years ago I was working with the founder of a very large preipo startup about 1500 employees. Uh they had planned their HR team had planned a global offsite in Florida. um they have um a young and very progressive employee base. Um one of their ERGs raised their hand and said, "We don't want to do business with Florida." And in fact, some of our LGBTQ employees may not feel comfortable going to Florida for the off-site. Uh no one, you know, the CEO didn't wake up in the morning saying, "I'd really like to get involved in a conflict like that." They had already put down, you know, a very substantial deposit on the hotel. They had made travel plans. It wasn't an easy thing to unwind. Now you're faced with a lot of different competing interests uh and the imperative to make a decision. Um there's a little bit of a you know um a thread of people who say CEO should stay out of politics. Um sure when you have that opportunity. I've never met a CEO who wakes up in the morning thinking how can I get my name in the papers talking about all the controversial issues happening in the world right now. CEOs want to build a good company. They want to grow. They want to do right by their investors and their employees. Um, they are generally driven by pretty strong values, but they're not looking to stir things up. The reality though of living in the world we're in right now is that when things happen like what I described, the the founder of the startup, um, often we get pulled into things where we have no choice but to engage. And then the question isn't should we engage or should we not engage. It's how do we look at the whole map um all of the stakeholders who matter to us and determine how we're going to make the decision that will have the best outcome for the most number of people. >> Yeah. And it sucks that you just you kind of have to bite the bullet that as you say like not everyone's going to be happy and it's just how do you how do you make that that list of people as small or as minimally impacted as possible. But the the reality of choosing between bad options I think is something that founders that reach a scale of like you know a real business you know like you're you're scaling a real business you have you know either hundred you know hundreds of employees it becomes very sensitive very quickly on just the the breadth of personalities that you have like you can't win everyone and >> well that's right and there's a two-dimensional way of thinking about this and a three-dimensional way. So the two-dimensional approach is to always think about your stakeholders as having equal value in all cases. Which means if you are a founder who tends to default to your investors being your most important uh stakeholder, uh if an investor calls and says you should do a thing one way, you're probably going to do it that way. The fact of the matter is there are cases where the investor is the most important. There are times when the employee is the most important. There are times when the customer is the most important and so forth. So the three-dimensional approach is to understand that the dynamics of each case will dictate how you should react. >> It brings back some some PTSD for me with you know multiple cases like the situation where you know Samsung was supposed to buy my company. They the deal fell through the morning of close like just couldn't have been any worse of a situation. Literally get a text at 2 in the morning like morning time in Korea that the deal is dead. Uh, and you know, the new CEO vetoed every deal on the table, regardless of what it was. And we had told our whole team to show up in the morning at 9:00 a.m., which we never did. Never told them to show up early in the morning. And, you know, my co-founder and I were sitting there like, "The do we say to them?" Because no, then not everyone knew. There's only about five people in the company that knew that we were selling, you know, but the rest everyone else was just like, you know, coming in like, "Oo, something exciting and big's going to happen." They've been teasing it for a while. And all the decisions you have to make that are like so not aligned with your day-to-day operations as a founder and like everyone starts questioning your authority, why you're doing certain things is like you can't tell employees certain things. And then that moment you're leading up to falls apart the morning of and having to basically make a decision of what do you say? Like how do you not knowing that the deal might still happen? We didn't know. We didn't have enough information. Literally just a text like deal's dead like deal's on pause right now. Yeah, we don't know what's happening. We'll get back to you. It's like Um, >> and Jason, I and I think that this is such a classic example of thinking about the audience in front of you. The crisis you had was a crisis with your team. >> It wasn't a media crisis, at least not at that moment. It it speaks exactly to thinking about who your audience is. Your audience at that moment was your team. It might shift later to the media if there was a leak or to investors, but at that moment your singular concern was the people who were shoulder-to-shoulder with you building the company. And what I would say is when that is your number one audience, as much as you can default to honesty and openness to the extent you can, right? When you're putting a deal together, we all know that there are things that you can't disclose to people. When you can't disclose things, be honest with them that there are things you can't disclose. But the truth of the matter is there's not really any spin that could have changed the reality of what you were going through. Which means that the best approach is level with people. Give them the most optimistic version of what you have to tell them because the job of the founder or the CEO is to uh you know make people feel good and ready to rally even when times are tough. But if you sugarcoat it too much, if you spin it too much, they know. They always know. And I always like to say that the worst thing you can do with employees is treat them like the rest of the world. You can't communicate with your employees by press release. You have to make them feel like you're bringing them under the curtain to whatever extent you can. Um, and treat them like adults. I told them we were gonna have a great Christmas party, >> which I bet was true. >> It was all right. Everyone got um intoxicated on that that uh all of us uh you know, that was a uh we were all depressed uh at that point. Yeah. Fortunately, we moved very quickly, got another deal done, but >> yeah, defin I don't know if I handled it right, but didn't see a lot of options on the table. Um but you know, for the the the crisises that you've seen and overseen um at the scale of what you've seen like you know I'm talking about you know a small startup uh it's raised you know a couple million you're dealing with like multi-billion dollar companies that uh have to navigate you know very complex uh very public situations and you kind of talked about this a little bit earlier but I would like to unpack a little bit more like when you if I'm a founder and I'm blindsided by external internal force of chaos that's going to derail whatever my expectations were. What's the framework that you work through with your your clients on understanding the situation and and discovering what options might exist? >> The first thing, and this sounds obvious, but it's important to say, is really dig deep. Um, take a deep breath and make sure that you are interrogating all of the facts. Um there is a human instinct to make a decision quickly under pressure. Um there's also a mentality that I see frequently where when a company um gets into a difficult situation. There will be people who the expression is they smell smoke so they start a fire. Um you know something is going a little bit wrong so they make a decision that make that accelerates that process. Uh makes things go wrong much quicker. Um, I wrote uh an op-ed quite a few years ago and I don't remember much about what I wrote, but I do remember I thought the title was pretty clever. It was don't just do something, sit there. So, what I will frequently advise, and again, it feels intuitive, but often it isn't uh in that moment. Um, is take a breather. um don't feel the need to make a decision immediately. Whether that decision is uh changing a policy, whether it's contacting a reporter, whatever the kind of decision set in front of you, usually you can afford a little more time than you think to think it through. So number one is within reason, take your time. Uh because you can't pull back a thing you've done. Um, but usually you can take another hour or another day to make sure you're doing it right. Number two, um, make sure you have a team of people around you who you trust. Um, and I think that that can be some people who are formerly on your team. Um, I think it's good to have some outside perspective. That can be an adviser uh, like my team or it can also be a spouse or family member or an investor or a mentor who you trust. I think it's critical to have people who are not living and breathing the day-to-day bring a little bit of outside perspective into the conversation. Um, and ultimately I think the job of a founder, the job of a CEO is often to bring together a group of people who have disperate viewpoints and to hear them out and then to determine how to make a decision based on different inputs. If everyone's giving you the same advice, uh you're not going to make a good decision. If you have people inside the company and outside the company, potentially from different industries who are giving you competing opinions, that's actually that tension will help you get to a better outcome. And you know, you mentioned something else earlier about knowing your audience too, like who who are you going to end up speaking to? Um and and who matters most in what's rece like what's put out into the world whether it's you know the public narrative customers uh the team employees or or you know shareholders and when it comes to assessing that you what would you recommend to to founders when they kind of look through their all their stakeholders? >> The first thing is always consider that group of people variable and changing given the dynamics. Um there will always be people who matter a lot. Your investors matter a whole lot. Your employees matter a whole lot. Your customers matter a lot. Um you can think about the media if it's a media situation as a stakeholder. Um they matter. Um and you need to come into any situation having a pretty nuanced idea of how you think people react to different outcomes. uh you're not always going to be right, but you need to be able to game that out a little bit. And then really think about, you know, the kind of the the string of events. If you make one decision and investors are pretty happy, but a group of employees goes absolutely crazy, can you afford that dynamic? Maybe it's the opposite. Um you know, who among your board will give you the benefit of the doubt? Who among your investors will give you that benefit of the doubt? say, "Hey, I may not agree with this decision, but I believe that you've thought about all of the angles. Maybe you've thought about things that I haven't, and I trust you're going to make the right move here." And by the way, when you think about your cap table, the people who are willing to give you that benefit of the doubt, those are the keepers. But sure, part of that is you want investors who are willing to put that trust in you, but part is you need to earn that trust, which is really about relationship development. And it goes back to, you know, you can't start thinking about your stakeholders when a crisis hits. You need to have done that leg work way before you hit a bad patch. You need to be communicating with your investors and your employees and your customers in ways that engender that kind of trust. >> You know, it's such a key characteristic I look for in founders of like how do they handle themselves when goes wrong? Uh it's so easy to kind of say like everything's up to the right, everything's looking great, but like those companies that are exploding with growth, if they like hit a point of crisis and immediately fall off a cliff, there's a company that um got just absolutely ripped this morning in a op-ed for basically claiming that they had, you know, x million in ARR. You know, it was all perceived to be that way, but then the churn was like 90%. Like, so it was just falling off a cliff. And so rather than like fixing the problem, they like doubled down on the narrative and doubled down on, you know, the customers are the problem, not them. And like just completely not, you know, going in the right direction obviously because now they completely got eaten alive and, you know, will probably be sold for parts or, you know, dismantled at some point uh for just mishandling the situation as opposed to looking at how do they properly address this crisis. >> It's exactly right. Um, you obviously every founder wants to be known for growth and financial success, right? That's you can't be a founder without that. But it's also not enough because everyone hits that moment where growth stalls or where there's a challenge with a new product. And if your entire reputation is built on being the founder who's growing fast, that can crumble really quickly. My company grew incredibly quick. If you're a founder doing over 5 million in revenue and want to know what the best$und00 million plus founders are doing to fuel their growth, make sure to subscribe to our million exits newslet how to fund, grow, and start your business. I'll even give you a curated list of investors that would want to invest in your business. It's totally free. Click that link down below. Subscribe. Do it now. I promise it's worth it. You won't regret the news. Go ahead, subscribe now. to rally around and feel as part of their identity. It's not just we're part of this growing company. It's we're a part of a company that's doing things the right way that has a longterm vision and that we feel good about the work we're doing each day. >> You know, another kind of consistent um denominator and everything you're mentioning is like you can't do this alone as a founder. Like I I've seen founders basically internalize everything and try to manage and capture all the chaos, all the stress of a crisis to themselves and themselves alone without bringing in trusted adviserss and you know not talking to stakeholders at all just having to take that burden entirely on their own. What would you say to those founders that, you know, have chosen that path as opposed to what you're kind of promoting in terms of, you know, make it a discussion, get the facts, talk it out. Um, what would you say to those founders that have decided to to go solo? >> I get it. Um, and in some ways it's virtuous, right? You want to take that stress on because you own that stress. You're the one who volunteered for it. Um, others didn't in the same way. But even though I think the spirit behind it is often virtuous, the outcome will never be as strong. It's simply a fact that the more viewpoints you bring into a conversation, the more diversity of thought, the better uh enabled you'll be to make ultimately u the right decision. Now that sort of board of adviserss can look different depending on your personality. As I said, it can be, you know, a group of folks internally. It can be a group of investors. It can be outside consultants. It can also just be, you know, your a buddy of yours from high school who, you know, has nothing to do with your industry, but you really trust them and you know that they're not going to tell you what you want to hear, right? It can be there are so many different models. What you want to avoid is people who are just going to reinforce your thinking. You want people who will challenge you, but do it in a positive way, right? Some people the idea of, you know, challenge the CEO means tell them they're wrong. um that gets old really quickly, right? And what I find is that, you know, the CEO is often right or at least is some version of right and maybe needs to see a different perspective, but um bring together people who um you really trust, but trust to give you a very honest assessment of how they view what you're facing. >> David, how did you get into this? you know, you're in Washington, but how did you end up helping, you know, some of the, you know, leaders of some of the biggest companies in the country as well as small companies, you know, startups. Uh, how did you get into this? Why did you choose to get into the most complicated point of someone's life? >> I started my career as a speech writer in politics. I worked on Capitol Hill, um, worked at the Justice Department. And what I this was very early in my career and what I realized pretty quickly was I liked writing. I didn't love it. Um I wasn't someone who wanted to be writing their entire career all the time. But the job when I was in my early 20s gave me a seat at the table. you know, I was to it's a cliche, but I got to be in the room um and in the room where some really hard decisions were being made um that were consequential and had real national um implications. And that's what I loved. I loved being a student of leadership and thinking about how you make um hard important decisions amidst a lot of uncertainty um with, you know, big um consequences of the decision that you made. And you know, when I was in my early 20s, I wasn't necessarily asked to weigh in on these decisions, but I got to watch them. And then if you're in the room long enough and you stick around, eventually you have the opportunity to share your your view. Uh and so that's really the direction my career took where I had a series of roles in the private sector that were one foot in what you might describe as traditional communications but another foot in kind of an informal strategic advisor almost chief of staff to a series of CEOs. Um and it helped me develop this view that communications shouldn't be thought of as its own discipline. Um it needs to be woven into a broader strategy. Uh, and so I developed this reputation as being someone who had pretty good familiarity with how to advise founders and CEOs. Um, I don't think of myself as a crisis adviser. Um, there are firms where you bring them in when you have a crisis. And I've always thought, why would that be the signal you want in the marketplace? I've just hired this crisis firm. I must be in crisis. But what we do, what one strategy group does is we have long-term relationships with founders and CEOs and their uh seauite where we are in the trenches with them. I like to say that, you know, we're the first uh number on speed dial. Um which means that if they have an opportunity they want to talk through, they're going to call us. But also, if they have a challenge that could become a crisis, we're the first call. So it's really a trust relationship that ladders down into doing a lot of the things we think about as reputation management, communications, thought leadership, but it starts with we want to be one of those people that no matter what when you have an important decision to make, you want us in the room. >> And you know before one strategy, you know, you were at Facebook working on I think during or before the IPO and dealing with that. you're at Bloomberg, you're at Citadel, you worked at some, you know, major, you know, companies that have thousands of employees. Uh, I'd be curious. Obviously, you probably can't share what you can't share, but, you know, do what you can. And I think being in those rooms and hearing kind of the story that didn't come out, the story that um you know maybe didn't get the full picture like you know was was the option not chosen to talk about you know any any interesting stories you can share on that front without causing any trust issues with your past clients. >> Well here's what I can say about the aggregate of those experiences. Um, >> in many ways, the only difference between a crisis that a really big company faces and a crisis that a startup or a small company faces is the number of highly paid people in the room. Um, the elements of it, the consequences of it, uh, are really similar. Um, and so, you know, my firm works with a bunch of big companies. We also work with a bunch of preipo, you know, series 8 IPO type companies. And I don't think that, you know, that there's much difference in how we handle a crisis for one versus the other. Um, the other thing I would say is, um, crises come in literally every uh, flavor you could possibly imagine. Um, and, uh, things happen that are totally out of left field. Um whether it's uh a CEO going through a really messy divorce, uh a CEO um who of a preIPO company who made a really major real estate uh transaction, bought an expensive uh property and then realized that uh it would get reported in the media and uh they, you know, freaked out about employees seeing how much money >> I think I know which one you're talking about. >> Remember that one. um you know uh or you know when I worked at Bloomberg um there were some very public uh crises around uh the newsroom and the separation between the news side and the corporate side that took weeks and weeks um so uh you can't um there's an expression um you know that uh plans are useless planning is everything um I don't believe in having a crisis playbook I think there's an industry that exists around trying to come up with uh a solution to every possible crisis. We need 50 different statements sitting on the shelf. We need um a strategy for every different outcome. Um I think a lot of companies spin their wheels planning for things when the reality is when the thing hits, it's probably going to be different than you imagined. And the best thing you can have is people who stay cool, who have experience dealing with complicated situations and then can call on their pattern recognition to make good decisions in those moments. So like looking at some very public, you know, crisis situations like Brian Armstrong, CEO of Coinbase dealing with multiple issues, but one that kind of, you know, polarized parts of the country in terms of, you know, picking a line on like no no politics like as people were ripping apart each other inside of Coinbase over, you know, red verse blue and and politics game and like how like when you look at other CEOs that have publicly experienced this and not your clients, like what's kind of your commentary on say like Brian Armshog's uh circumstance there? >> You know, when I was thinking about launching one strategy group, I was I was working at a really successful um CEO advisory firm. Uh and it felt like there was an opportunity to do the work that traditionally a lot of, you know, publicly traded CEOs got, but bring it to, you know, some smaller companies, some startups, some preipo companies. And as I was in this process of of thinking about whether to do it, there was a very well-known kind of CEO oracle who had worked in the White House and had been doing corporate advisory for decades and decades who sat for an interview at a at a big national publication. And the whole point of his interview was to say that we need to end this age of CEOs getting involved in politics. let's keep politics in one category and let's put the company stuff in the other category. And I read it and I kind of got angrier and angrier as I read it because to me it was a great example of a very old school way of looking at the world. Um, and I think in the advisory space, what you have is a lot of uh people who cut their teeth in the 90s and built a way of doing things that were really effective back then, but aren't really responsive to how much the world has changed. Um, and a crisis today looks much different than it did 30 years ago, 35 years ago. Um so on the issue of politics basically my view is it's not a question of should we get into politics or should we not it's a question of when you are forced to make a decision are you making the best one that supports your employees and supports your market position. Um so sometimes it's unavoidable. Um and when it's unavoidable be smart about it but don't act like it's a it's a black and white decision. Don't act like your decision is do I want to be a political founder or do I want to be a political founder because either one is going to lead you to a bad place. >> You know, I know you're good at your job of how well you're able to like narrate an answer without having to like actually take a stance on like the the gotcha topic. uh >> you know the I'll I'll take that as a compliment whether it was meant as one or not but the truth of the matter is um it's really not for me to pass judgment on the politics of a situation. Um we have a a a big client that was faced with a really tough decision that a lot of big companies faced a few months ago which is would they donate to President Trump's inaugural committee. very political issue and one of those things where you know again you get to that moment and you see a lot of your peers who have done it some who haven't and you need to decide whether you'll do it. Um in the way that I advise on an issue like that it's you can't get more political than that but it's not my job to impose my political views on the CEO or the company. It's my job to help them look at the whole uh landscape and think about different outcomes. And in this situation, they knew, again, no good answer because they knew that uh, you know, some employees would be pretty upset if they did it. They knew that other uh stakeholders would be pretty upset if they didn't. And again, it's just about weighing the facts, keeping your own politics out of it, and putting the company first. One of the reasons I wanted you on this show is not like not just because I like talking to you because that's part one, but the other reason is as a founder that's been through some you know, just running around with uh, you know, I like to say, but the visual I create for myself is I was on a unicycle juggling balls of fire, balancing a house of cards. cards. Uh, and and then someone just like throwing like, you know, flaming balls at me while trying to dodge them. Like that's essentially the visual I create for myself when I go back to my like high-tech, you know, growth startup stuff. And, you know, when a crisis hits, it's like where the balls hit you in the face. And, you know, every founder has to do it. Especially if you raise venture, the the the stakes are so much higher. the the velocity of expectation or the expectation of velocity is so much higher and I wanted you on this show because you know you talked about earlier about you can't really like once you're in crisis mode you know if you haven't set up the foundation already it could be exponentially harder uh and how you make your decisions in crisis is ultimately what makes a great founder separated from a good or a bad founder and I thought it would be essential potential for you to kind of share your knowledge and and talk about this. And yeah, you've already mentioned a little bit, but if you can talk a little bit more about that that prep, like that mental mindset of, you know, while things are calm or while things are going well, how do you manage your stakeholders? how you manage your communication to make sure that you know when that ball does hit you in the face and you have to do something that you have the right foundation to not screw it up. >> Yeah. Number one, um really know your who matters and and know them on a personal level to the extent you can. Can you know every customer personally? Probably not. Can you really get to know every investor personally at at an earlier stage? Yes. And um and do take the time to do that. Um I can't tell you how many times I have a conversation with a founder who um takes for granted that one of their investors or one of their board members will side with them on a given issue only to then be shocked to find that they don't. Um that's probably a discoverable fact, right? You probably, if you're honest about your relationship, could see some warning signs. uh you could um you could kind of know that maybe that's a relationship that needs to be strengthened. So much of what we do, Jason, across all of the aspects of of building a company, it's it's trust. Uh and I think even if you are a product person, even if that's your background, and even if you've built the best product, you have to focus on the trust part first. So that's where I would start. The second is something I mentioned. It's build a group of people around you who you trust um who you know will give it to you straight. Um and the third is um at the end of the day have the courage to rely on your instincts probably being right. Um because something got you to where you are. Uh and I'd say most of the time a big part of that something is good judgment. Um, so if everyone's telling you one thing and you just have this nagging feeling like there's something you see that they don't interrogate that. >> You just boosted some egos massively. Like, yeah, you're right. I'm awesome. >> Well, because at the end of the day, and Jason, I know you've gone through this in your career. Um, you are the one who has to live with your decisions. And if you have a group around you, if you've got your your leadership team and they all vote to do something one way and you choose to do it their way, even if it doesn't quite feel right and it doesn't work out, they can move on to their next thing much more easily than you can. You have to live with the outcome of that decision. That doesn't mean that doesn't mean ignore advice, right? getting that advice is the most important thing, but it does mean that ultimately the filtering that you do of what people are telling you. That's one of the most important qualities of being a successful founder. >> And and what I look for where to try to assess that out now because I made some investments. I've worked with some founders where I didn't check this trait about them and those have all been the the worst, you know, deals I've been a part of. And the ones that I ultimately look for is like what was their what was their moment of crisis in their past andor you know like how do they come out of it like what's their story what's their narrative and then um just how focused are they on the relationships of their cap table and you talked about this earlier especially at the early stage you might not have like 100 employees and you know without you know whatever like you know big company you know logos as your clients yet that you can worry about like you the people that are there at the earliest or you a couple early stage employees and your cap table like who's backed you and trust you and a red flag I see with founders are the ones that are scared to go to their cap table the ones that you know are afraid to bring up the issues that they experience because like oh I got to be awesome I got to present a bravado that everything's going well um and the problem is when something goes wrong everyone thought everything was going right what happened why why didn't you say anything like what what's going on it's like if you're able communicate with your investors, you know, as the not when like hits the fan, but the small things like, "Hey, I'm going through this one thing with an employee, like, can you help with this?" Or, you know, I'm going through this one thing with uh a customer or, you know, whatever might be happening. being able to start those conversations when the stakes are low to build that trust specifically like and and prioritization of cap table, you know, who's who's first on the cap table in terms of, you know, influential, you know, impact or did you sign a term sheet that one of those investors has veto rights to to an action you want to take like a deal you want to make? If you don't have trust and consistent communication with those people when a crisis hits or an opportunity hits, like it could all fall apart because you didn't manage those relationships, manage expectations, manage the trust of those relationships. And I've definitely seen deals completely fall apart um you know because of the mismanagement uh of their cap table and those relationships. >> It's so true. I think you know there there is a fundamental truth which is that you really can't spin your uh cap table. You can't spin your investors. Maybe you can get away with doing it to buy yourself a little bit of time but in the long run they're always going to have the facts. And I can't tell you how many times I talk to an investor who says why is it that the first time I heard about this was when we got to a crisis. I could have helped. I could have helped them navigate. I could have done something about it. But now we're in a position where it's much harder to recover. And there is a human nature to it. People want to be asked to help. They want to be involved. And remember that even if your investors aren't building the company with you dayto-day, they are emotionally invested in your success. So being open enough to flag a potential concern, a potential problem uh early honors the trust that they've put in you. and doing the opposite, trying to keep them out of it. While again, it may be the right um idea to not expose them to things that you'd, you know, rather solve on your own, it never works in the long run. >> No, completely agree. And it eventually catches up. Now, I've definitely seen some like I've definitely taken a couple gamles like, oh, we're we're going to get really close to those performance metrics. We're going to get really close. And like, you know, I was like, let's let's just keep, you know, and like if we're just short, it's not a big deal. But like, you know, big important decisions or things that are going to come out at some point, you know, the the sooner you bring up those conversations with, again, at the very least, you know, if anyone takes away anything from this call, it's like build those relationships with your cap table. Make sure they know you, you trust them, you trust them, and at least you have a couple people like you said, like that advisory board that are close to you to bring this stuff up because if you're doing it alone and you're not talking to people about it, it's uh one, it it's going to increase the probability of burnout, which leads to worse decisions in my opinion. But I'm curious like have you seen in your history of doing this at you know all different levels like where have you seen kind of the the one that handled it right and what was the outcome and the one that didn't handle it right didn't take the advice or didn't ask for the advice and things went south >> I'll give you some aggregate um examples of of how it works and how it doesn't >> too good at your job >> I think it It generally works if you um you may let's take the example of a CEO who finds themselves in a little bit of of hot water. Um one example that Jason you and I have talked about is a CEO I worked with who came in to run a private equitybacked company and uh was new to the job. Not he had been a CEO but was brought in new and the first thing they did was cut uh a video well introducing him to employees. It was a big enough company that he couldn't introduce himself to everyone at once. Um, the video was cut by their marketing team, sent out to employees, and um, they made some horrible um, editing decisions that um, sort of without going into too much detail, made the CEO look sexist in the way he treated some of the employees who were in the video. Not remotely his fault. It was simply a really bad video cut. But here he is, brand new to the company, now introducing himself in a way that really infuriated a lot of people. The reason I think that that example is instructive is that ultimately he was not to blame. He had actually done nothing wrong. And therefore, while it's not how you want to introduce yourself to your new team, he was able to give an explanation that was credible and people were able to give him the benefit of the doubt. Now, the flip of that is when a CEO, when a founder genuinely has done something wrong, there's really no amount of spin that can get you out of it. I think that's a bit of the myth about the crisis industry is if you hire a really good crisis person, they can spin their way out of it. They can kill the article. They can weave some narrative that gets you out of it. That almost never works because people are too smart. Um so when you've actually done something wrong, whether it's a small thing, whether it's a big a big thing, the only way out of it is being direct, being honest, being open. Now, that can happen within a thoughtful strategic framework, right? What you say matters. That doesn't mean get in front of a camera or up on stage at a town hall and just let her rip. And often you find that, you know, people take this advice of being open and honest too far and it becomes this confessional where they actually make things worse. So, be strategic in both directions, right? Be strategic if you are apologizing, if you are explaining it, but treat people like adults. Um, I don't think spin is a thing because people see through it, particularly now so quickly. Um, authenticity, whether we're talking about politics or business leaders, authenticity is everything. That's what we all want from, you know, the our boss, that's what we all want from our elected officials. We don't always have to agree with their decisions, but we want to believe that they're doing things for the right reason, that they came to the decision based on a thoughtful framework. Um, and that basically at the end of the day, they're doing what they can to to to be a good person and run a good company. >> I think that's very well said and a great way to to wrap up this podcast. David, what would be the best way for someone to learn more about what you've done and or what you know, One Strategy does? >> Uh, well, thanks Jason. This was a lot of fun. Um, I drop by our website onestrat.com. Um, reach out to us. Uh I the way that I think about building this company is yes of course every company needs revenue and and clients or customers which we're fortunate to have. I spend most of my time just trying to meet interesting people and be helpful where I can. And in my experience if you do that you also kind of build a a really successful company. That's something you and I talked about when we were together a couple months ago in London. I think it's a shared worldview that we have. It's how you run your business as well. So I say that because I am always talking to founders who uh are dealing with a challenge trying to think about growth, maybe they are facing a crisis. Um and uh so anyone who you know wants to have a conversation, I'm always up to do it. >> No, I appreciate that. We'll make sure to leave the contact information in the show notes down below. And again, just a final word to founders, you know, get get a good advisory board around you. Keep keep the communication open. Don't hold it all in. I've seen too many founders burn out, not create enough optionality for them, and you know, the business crumbles because of it. I literally got an email this morning saying someone shutting down and needs to take a you know, mental health break for the next like six months. Uh it just it happens too far too often to too many boundaries. Um but David, thanks again for coming on the show >> and and Jason, your last point your last point is so critical. um take care of your mental health. Um because uh your ability to navigate complicated decisions is directly tied to um having that mental space. Uh and when human beings and founders are human beings face extraordinary pressure, it's harder to make good decisions. So do everything you can to put yourself in a mental space with exercise, with time off, with all the things you need to do in order to be able to make those hard decisions better. >> I completely agree, David. Thank you so much for coming on the show. I look forward to getting this out to our to our audience. >> Thank you, Jason. Awesome. >> If you were inspired by today's episode, then go ahead watch this next episode. Promise it's worth it. And if you really enjoyed this last episode and you want to connect with the guest I had on today, make sure to leave a comment down below telling me why you would like an intro to this guest and I'll make it