When we work with start-ups (and that happens a lot) we often encounter certain misjudgment addressing the relevance and commitment of the various stakeholders. The founders, trapped in a wishful thinking model tend to mistake enthusiasm for commitment.

A simple exercise that I propose first-time start-up CEOs or co-founders might avoid bitter tears afterwards.

Take a piece of paper and a pen or, if you prefer, a white board and a marker. I would recommend something physical.

First, think of those people that would stay at your side no matter what happened with the company or the project. Think of proper names that would aid you personally, either with quality time or hard-earned cash. Think of quality here, not quantity. Be fair and selective here, do not overreach. Write those names inside a small circle in the middle of the paper. Label that circle «Allies».

Inner circle: Allies

Inner circle: Allies

Second, think of other people that would be very happy to see your project succeed as long as they have a gain in it. Groups or individuals that love your idea but that, at a very simplistic level, are expecting something in return. They will help you if you help them. There is nothing wrong with these people, but they have extrinsic motivation and you must be aware of this fact. Write their names in a larger concentric circle engulfing the initial one and take a moment to review if someone from the first circle should be instead placed in this new one. Label this new circle as «Traders».

Allies and Traders

Allies and Traders

Finally, think of anyone out there that was excited about your project, has encouraged you, offered «any help you need» or put you in contact with someone else. People that have other priorities right now that are tangential at most with yours but that would like you to progress and make your project a reality if only because they like you. Typically, you will think of friends and family here but try to go beyond that. Put their names in a larger concentric circle engulfing the other two and take a moment to review if someone from the second circle that you thought was a «Trader» does not have that much to gain after all and should be placed in this final circle. Label this circle as «Beta-testers».

3 circles, Allies, Traders and Beta-testers

3 circles, Allies, Traders and Beta-testers

Look at what you have got now. There is no rule of thumb but the number of people in each circle should grow pseudo-arithmetically. If you have 4 people in the inner circle, the middle should list around 10 and the outer one more than 20.

Each of these groups will interact with you differently and expect different things from you. You must keep this piece of paper as your initial hypothesis and keep track of it. Over time, it might be that people move between circles or that you try to move people from outer circles into inner circles (which would be an interesting exercise).

Why is this important? Start-up founders need to manage their own expectations. Lets be ambitious but do not let the encouraging of others fool ourselves. It is important to understand your own strengths. I am sorry if it sounds a bit too much like Sun Tzu’s The Art of War, but since you are confronting a battle of some sort, it helps a lot to focus your time and effort trying to build the appropriate relationships with each person, somehow rationalizing and understanding that everyone is fighting THEIR own battles too. Do not be obsessed with reciprocity but with net gain.

Final note: I have been proposing this model to several start-up founders for some time now. After writing this short article I went out to find prior-art. It did not came as a surprise that similar approaches already exist and that they are the basis of well established methodologies. Actually, just in case someone thought I was stealing anyone’s idea, I decided to change this post’s title :-)