"Trust" is critical to a startup.
The core team (typically consisting of a CEO, techie lead and business development head) have to be trustworthy.
Every stakeholder needs to trust the core team.
Employees need to trust the core team.
Investors need to trust the core team.
Customers and end users need to trust the core team.
Strategic partners need to trust the core team.
Yes, it's a very important word, central to building a winning new enterprise.
Those engineers, marketing people and all the rest trust the leadership to provide three things:
- Competence: the core team is able to shape this great startup idea into a winning business.
- Benevolence: the leaders will not rip me off, they will provide fair compensation, challenging yet still reasonable workload, and a justified reward to me.
- Equity: the people at the top will treat me with the same standard as the rest of the employees.
When you get trust working in employees, you the core team are way ahead of the competitors who do not get it right. The top quality stakeholders will seek you out, give you the first opportunity to work with them.
There is not enough time for experienced investors to closely manage the core team. Whether inexperienced or old bull-headed, core teams have to be trusted to execute a plan that can win. The people with the money just want to be excited cheerleaders.
When you find investors interfering with your daily tasks, beware: the money people may be sensing you are not trustworthy, less able then they thought to pull off the winning startup they put a lot of money into.
CUSTOMERS AND END USERS
You will get the first wave of end users willing to trust you for their first purchase. If they feel let down, you have a problem. If they feel betrayed, you have a crisis.
The same goes for customers (who send you cash).
Both constituencies must trust you.
When they do, they will rave about your product/service, spread the word around the planet via the Internet, recommending your business to many others. That's a big win. It is central to the primary thing Steve Jobs focused on in his quest to build great products that customers loved.
Suppliers, channels of distribution, sales outlets, etc. all need to trust you to deliver what your excited speech said. They joined you because they believed in you. Yes, they expect to benefit significantly, but it begins with trust in your ability to execute as you said you would. They expect you to be faithful and true to your word, not suddenly changing allegiances, not violating contracts, not even breaking promises and handshake deals. Complete trustworthiness is what they expect of you and your core team.
ETHICS AND HONESTY
Trust is not bout ethics and honesty alone. Yes, they are two aspects of what all the people cited above expect when trusting you (to be ethical and honest, among other things). But trust is larger than those individual aspects.
BOTTOM LINE: Trust in a startup is central to the entity's value to the many stakeholders who expect to benefit from trusting the leaders of the new enterprise. It is very personal. It is difficult to overcome a lack of trust once it has formed and thus it is vital to not do things that lead to that demise of relationship. When your stakeholders trust you, they will do amazing things for you. They will become part of your unfair advantage. Serial entrepreneurs understand the power of trust. Use it well to build and manage your winning new enterprise.
I wish you The Best on your Adventure!