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(01:03): Hello and welcome to another episode of the Duct Tape Marketing Podcast. This is John Jantsch. My guest today is Martin Gonzalez. He's the creator of Google's Effective Founders Project, a global research program that decodes the factors that enable startup founders to succeed. He also works closely with Google's engineering and research leaders on org design leadership and culture challenges. We're going to talk about a book he co-authored The Bonfire Moment, bring your team together to solve the Hardest Problems Startups face. So Martin, welcome with the show.

Martin (01:37): Thanks for having me, John.

John (01:39): So is there a set of the hardest problems startups face or is it different for everyone?

Martin (01:45): Well, what's interesting is that there's a lot of research that talks about the top reasons for failure in among startups. There's a few decades of research actually, and what has been revealed by some studies out of Harvard and McKinsey is that 65% of startups fail because of people issues, and we see that in our work with startups across 70 countries today. Bill Curran, who is now a Sequoia Capital partner, said it really well once he said, engineering is easy, people are hard, which is something we like that verbiage

John (02:22): You in fact, in the writeup for the book description of the book, you actually start with building team is harder than building tech. So obviously we're going to dive into that a little bit. One of the things that I thought was interesting is that one of the core, I guess, tactics that comes out of the book is this idea of the all day get together. So talk a little bit about that.

Martin (02:46): Yeah, so the book actually shares with really the world now a workshop that we had built within the Google Accelerator about nine years ago now. Back then we had a lot of content around engineering and marketing and sales, and then when we discovered this research around why startups fail, I asked for a small budget to pilot something and then it was in Jakarta, but when we brought it there, it was rated pretty highly against even some of these really valuable programs around engineering and marketing and sales. We thought, okay, probably an anomaly. Let's try again. We tried it in Bangalore, and again, it received such rave reviews that we brought it to Sao Paulo and essentially it's reached all these countries and what we do in the book is we take what was several variations of that workshop and bring it down to a single day that founders and teams can really run on their own.

(03:44): It's called the bonfire moment because we found that in our work with these leaders, when you bring together really ambitious teams, big goals and tight resources, there's a certain kind of intensity that the team creates that feels a bit like you're in the fire constantly. And so the bonfire moment is a chance for the team to step out of that fire and examine it together, bandage up relational wounds, get back in touch with the mission and really prepare themselves for that next push. As you know, the startup life is you're constantly going from one trek to the next. So the bonfire moment is that workshop.

John (04:26): So I think in theory, I can envision this being this one day workshop that you run yourself being very effective and as you said, get people back on kind of the mission. But I also see a lot of ways it could go sideways, just kind of turn it into a bitching session or like, what's wrong here? How do you set it up for success?

Martin (04:45): Yeah, I'll give you some ways in which it's gone sideways, but I think specifically around how does this not turn into bickering and digging up additional arguments that weren't there to begin with? The ethos of the workshop is actually precisely that, which is, let's dig up all the many people challenges that we have conveniently ignored because there were many other things that were more important during that time. We talked in the book about one of the biggest traps that we've seen startups face is this thing we call the trap of speed, which is when you're running super fast, it's easy to forget about some of the more subtle issues that really could hurt you in the long run. I mean, we find that it's the people stuff that tends to get swept under the rug, and so we create a structured environment where people can raise some of these challenging issues, but really talk about it in a productive way.

(05:44): One of my favorite parts of the bonfire moment is what we call the bullshit circle, and the premise of the bullshit circle is that a lot of leaders, people in startups or in startup environments find themselves struggling with a lot of self-doubt and insecurity, and what tends to happen is that the way they mask that is through a few different ways that tends to contribute to some kind of a toxic environment for the team, whether it's a toxic form of optimism or a toxic form of showing strength or detachments. We talk about those three things actually. We talk about optimism, strength, and detachment as ways that people mask their insecurities, and we invite them to reflect on what is their cocktail of poison, so to speak, that they tend to use in these moments of deep insecurity, and it then invites people to then share that openly and then talk about how that maybe shows up and invites their team to say, look, when you see this in me, really what you're seeing is a coping mechanism.

(06:49): So we try to create a fairly structured environment so that a lot of this is done in a productive way. The one thing I will say really quickly that I think has gone sideways in these programs is we've seen some startups actually recognize that they have some issues that are just insurmountable and that they almost have to use kind of marriage language, some kind of irreconcilable differences, and some startups have parted ways after they've had this experience. Now, is that a failure of the workshop? We'd like to think that it's not because then what we've done for this team is we've allowed them to be see that sooner and part ways and perhaps apply those learnings and their next thing. Founders are never one-time founders. They tend to found again and again. So that's one way you'd say it's gone sideways, but really we see it as a positive. Ultimately.

John (07:42): Yeah, that's like ending a relationship that rather than hanging on with nobody being happy for two more years or whatever, recognize that it's over and part ways amicably. You talk about the idea of facilitating healthy arguments. What have you found that creates

Martin (08:00): The best teams we've seen have a lot of conflict, but it's conflict of ideas and not of personalities. There's a really fun story we tell in the book by a figure in the history of computer science. His name is Bob Taylor. He was a lab manager back in what was called Xerox Spark. Xerox Spark was the place where Bob Taylor was not himself a researcher. He was not himself coding and building the hardware and the tech, which was for him a big upside. He talked about how one of his biggest jobs as a lab manager was to convert class one disagreements to class two disagreements. Let me explain what he meant by that. Class one disagreements are essentially disagreements that feel like straw man arguments where John, if you and I had a disagreement, a really easy way to win that argument is I represent your idea in its weakest form possible and therefore making it easy for me to attack it and to refute it. A class two disagreement on the other hand is where you share your point of view, John, and I'm able to share back to you your point of view in a way that is satisfying to you. So instead of a strong man argument, I create a strong man argument and Bob says that his job isn't to resolve disagreements, it's to make sure that all disagreements graduate from class one to class two disagreements. I think that's one really useful thing that managers and leaders everywhere could really think about.

John (09:38): So one of the things that I've certainly recognized, and I'm sure you've recognized working with startup founders, a lot of startup founders never got any kind of formal leadership training. I mean, they had an idea, they jumped into it, they tried to make it happen, and then next thing they turn around and there's 15 people standing around that they really have no skills, but maybe just no experience on how to manage. Do you feel like that's really the sort of the blind spot for most startup founders?

Martin (10:08): Yeah, and I think that's why this workshop really gained popularity, not because there was anything groundbreaking about it, but really it's because a lot of founders come into this work wanting to just build product, and they realize that as soon as they need to scale this product, they need to put a team around it and then build a company around it if they wanted to scale. And so indeed, I think there's another element to this too, John, which is there's something in our culture that looks at these people problems as maybe not that difficult to solve for, and you'll see that in the language. People will say, oh, it's not rocket science, but we write in the book actually that what's ironic about that statement, it's not rocket science, is that as a civilization, we're incredibly good at rocket science. We can launch a person on the moon within two kilometers of the estimate, but we're not so good at the people stuff. So it's an interesting expression in our culture.

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(12:12): Now, this offer is limited to new active campaign customers only, so what are you waiting for? Fuel your growth, boost revenue and save precious time by upgrading to active campaign today. So a lot of trying to think of the way to say this, A lot of the leadership dysfunction, there's a good way to say it probably comes about because we talked about not having the experience, but also maybe their own fears and insecurities are really masked by having to be in charge. What level or to what degree does self-awareness of the leader play a role?

Martin (12:48): I think it's huge though. I will say that I have learned in my years of supporting leaders that I think it's important to firstly know thyself and then get over thyself, which I think is an element of the advice that is often lost, which is it's important to know what your defaults are, who are you authentically, and then recognize what context you're in and then make the shifts accordingly. I think being completely, I think just being completely yourself and knowing yourself is not nearly enough.

John (13:25): Do you think it's possible to build something extraordinary without a healthy culture?

Martin (13:33): So surely we've seen a lot of really successful companies get built on a very toxic environment, and when founders come to me and ask me, well, how about this company and that company? My often response is that I go by the data. You can be an anomaly where you kind of beat the norm where you can create very toxic environments and beat the odds and build something tremendously successful, and then you can go by the data where the data shows that good healthy cultures actually surpass. There's this really interesting study that was done out of Germany, a university in Germany. They looked at about four decades of data and they looked at what was the real economic upside of a healthy culture. What the study showed was that on regular years, on decades where there was not a big financial crisis, the benefits of a culture were very subtle, almost nil. It's in those crisis decades during the global financial crisis or the.com crisis. That's where you saw the real upside of these healthy cultures. And so we tell founders that the value of a good culture is subtle in calm waters, but pronounced in a storm.

John (14:51): I think we saw that from the pandemic. Frankly, the whole quiet quitting thing was really just people saying, I don't want to work here anymore.

Martin (14:59): And look, John, if you look at all the really successful toxic companies these days, I'll bet you that the moment their stock drops by a bit, their best people are gone. Money and a big mission can only keep someone there long enough for so long. At some point, good people realize they have options and they go,

John (15:24): I don't think you talk about this in the book, but I'm curious, let's say a startup. I mean there are some people that just aren't good people that don't have empathy, that don't have self-awareness. Maybe how important is it to maybe find a second in command, so to speak, type of role that can play that part for a founder?

Martin (15:42): So I think it definitely can mitigate, it can definitely help. There are certain things you just can't delegate, like being a decent human being to your team. There's a really interesting study that,

(15:56): There was an interesting study that came out of MITI believe, that looked at whether adult supervision actually helped mitigate some of the downsides of maybe an inexperienced founder, CEO. And you see this a lot in the startup in the tech startup world, and what it found was that adult supervision actually was effective if the founder CEO had the certain amount of openness and allowed the adult in the room to make decisions on their behalf. But in environments where founder CEOs have brought in the token adults and then anyway made decisions themselves without giving control to the adults in the room, then you see no, in fact, you might even see negative effects of that.

John (16:44): What are some of the signs that a founder should start recognizing that would say, Hey, we need to do something intentional, like a bonfire type of approach.

Martin (16:55): We like to tell founders that you should do the bonfire moment as early in the journey as possible. We see this as good prevention now. We've also seen a lot of breakthrough in founder teams in startup teams when they do it even down the line. I think when you start to see elephants in the room, those issues that everyone knows about but no one wants to talk about, that's one red flag. When you see issues where their feelings of unfairness between equity holders, that's another red flag. When people are feeling like we're not as committed as one another, we aren't pulling our weight to make this succeed. Those are other signs too, but I'd say as early as possible is always better.

John (17:44): Yeah, it's probably harder to fix a damaged culture than it is to just create a good culture, right?

Martin (17:49): Yeah, no, this is true. It is so true.

John (17:52): Yeah. So walk us through, and it doesn't have to be the full one, but walk us through what a kind of typical agenda of a bonfire day. Is that what you call it? Bonfire day?

Martin (18:01): Well, we call it the bonfire moment. It's four parts. It's facing hard truths. It's part one. Part two is noticing hidden dynamics. Part three is dropping the masks, and then part four is resolving unspoken issues. So at the start of the day, we really begin by creating a moment for feedback and self-reflection. We ask founders to think about how they're performing as members of that team. We offer them a self-assessment, which they can access through our website. It has them reflect on what we've seen to be the best strategies that founders have deployed, and through that exercise, we then invite them to help each other through some of the biggest gaps that they've seen. By the way, for those who want to go even deeper, we also have an option for them to do a 360 degree feedback option where they invite feedback from their co-founders, their employees from their investors, and then we ask them to write up what we've called a user guide, which is part two, which is we invite them to think about what are some of the defaults I have as I do my work.

(19:11): We also invite them, and this is one of the more popular parts of the user guide, we invite them to reflect on what are their motivations for being here. We talk about the head heart in the wallet as what we've found to be three of the most typical motivations that founders or startup folks bring into their work. It's either head, is this about the intellectual challenge of solving a difficult problem with very elegant technical solutions? Is it hard? Is it because you're committed to a user group that you want to improve their lives or improve some part of that industry? Or is it wallet, which is yes, money, but it's also what we've called a social wallet, which is I get access to people, I get to associate with other people or have a title that I would otherwise not have because of this without this startup.

(20:01): So that's the second part of the day. Then we invite them to what I've mentioned earlier on called the bullshit circle, which is we invite them to reflect on the biggest insecurities they bring, and then finally, we then have them look through really the top 20 sources of conflict that we've seen in our work with startups, and we invite 'em to reflect on which of those 20 items have they not yet prepared for or spoken about. And to give you a sense, we talk there about how do we want to spend our money or do we value things like an expensive office space, or if the media asks one of us to represent the work, who's going to be that spokesperson? Because we've seen this phenomenon of the Invisible Founder where there's a spokesperson that's public, meanwhile everyone else is working hard in the back room. You don't want that kind of imbalance of receiving recognition for the work. And that's the day, as you can imagine, it's an intense day. It's intense, it's uncomfortable. It's teams emerge from that day with a lot of renewed energy for the work.

John (21:09): Awesome. Well, Martin, I appreciate you taking a moment to share with the Duct Tape marketing audience. You want to invite people where they might connect you and obviously find out more about the bonfire moment.

Martin (21:19): Yeah, great. And thank you for having me. So you can find more information on bonfire moment.com, and we're also active on LinkedIn, and so you can find us there. Thank you so much for having me, John.

John (21:30): You bet. Well again, appreciate you. Bye-Bye. And hopefully we will run into you one these days out there on the road.