What makes a successful startup?

Martin Gonzalez —CONTRIBUTED PHOTO

Martin Gonzalez is the cocreator of Google’s Effective Founders Project, a global research program that decodes the factors enabling startups to succeed.

He also works closely with Google’s engineering and research leaders on organization design, leadership and cultural challenges. He has advised leaders across the Americas, Europe, Africa and Asia. He teaches and collaborates on research at the world’s elite universities for engineering and business, including Stanford, Wharton and INSEAD.

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He holds two master’s degrees in organizational psychology and behavioral science from Columbia University and the London Business School. Prior to Google, he was a product manager at Johnson & Johnson and a strategy consultant at the Boston Consulting Group. His book, “The Bonfire Moment: Bring Your Team Together to Solve the Hardest Problems Startups Face” (coauthored with Josh Yellin), became an instant national bestseller upon launch in the United States last May. It hit No.1 on Amazon’s bestseller list and has been identified as one of the best new management books of 2024 by Thinkers50, which the Financial Times calls the “Oscars of management thinking.”

In this interview, we explore this global Filipino’s personal journey, draw insights into fostering innovation, the interplay between technology and organizational change and the critical role of human factors in startup success.

Question: About 12 years ago, you made a significant career pivot into organization and leadership development for Google’s engineering organizations and its startup accelerator, following a successful career in marketing and strategy consulting. I remember meeting you 20 years ago when you participated in our 1st Markprof marketing leadership bootcamp program. What motivated this major shift and how did your early experiences influence this transition?

Answer: I was always fascinated by strategy: what are the few, well-calculated decisions you make that are underpinned by your theory of success. But when I was a product manager and later a strategy consultant, I realized business leaders were telling themselves a fictional story that the “enemy” was a competitor out in the market, when in reality the real enemy was the internal complexity that built up that suffocated their best ideas, decision-making practices that lost sight of the users and slowed down execution, and an org culture that saw good people leave and mediocre ones stay. The evidence bears it out—65 percent of startups fail due to people problems. The human factor in business is the most treacherous part of the journey to success, and I wanted to focus my mental energy on that problem space.

Through this time, I developed a deep interest in the psychology of groups. I was fascinated by why some groups came together to form dream teams, while others turned into nightmare collaborations. This interest began during my years as a youth leader. I became convinced that volunteer organizations (whether college orgs, youth groups or church organizations) were the best schools for leadership–without the leverage of a paycheck, you had to inspire energy, creativity and commitment solely through the merits of your vision and your trustworthiness as a leader.

When I considered leaving the established paths of product management or strategy consulting for the less defined field of organization development in the late 2000s, I found few role models with my business background who valued a rigorous, evidence-based approach to leadership and organizational challenges. Much of what I encountered were beautiful life stories and poetic platitudes about leadership that lacked rigorous evidence. It turned out, this unconventional path excited me far more than a predictable one.

Q: You have a unique vantage point, advising leaders in both big tech and early-stage startups, both known for their intense focus on innovation. What common threads have you observed in their approaches to fostering innovation?

A: Innovation in these places tends not to match the romantic conceptions many outsiders have. Innovative environments are not just places where you tolerate failure, fund experimentation and create collaborative, psychologically safe environments with flat hierarchies. The most successful innovators have an undeniable harsh side to their culture.

In the book “Creative Construction,” Harvard’s Gary Pisano perfectly captured what I had long observed but lacked the words to describe. With tolerance for failure, you need an intolerance for incompetence. Openness to experimentation must be paired with a disciplined approach to killing ideas that don’t prove out. Collaboration and psychological safety require strong individual accountability and brutal honesty. And while having flat hierarchies, you need strong decision-makers guiding teams.

Q: How can companies in other industries adapt to the waves of technological change, whether it involves digitizing their analog operations or integrating artificial intelligence (AI) into their tools and processes, both safely and effectively?

A: Stop looking for best practices. Instead, adopt a scientist’s mindset: experiment with as many ideas as you can in the cheapest way possible, and collect evidence to learn what truly works for your context. In this current AI tech wave, no one truly knows what needs to be done or what skills will be relevant in the future. Not long ago, many commentators who claimed to understand the tech argued that creativity and empathy were uniquely human traits that couldn’t be replicated. They were dead wrong.

Don’t fear technology. And don’t assume there’s too much to learn before trying it out. Wharton’s Ethan Mollick said it best, “The cost of really getting to know AI is at least three sleepless nights.” If you haven’t written an email, fixed that error in your Excel formula, or planned your holiday itinerary with an AI chatbot, what are you waiting for?

Q: What inspired the name “The Bonfire Moment” for your book? Why do you think it resonated so deeply with readers, quickly becoming a national bestseller upon its launch in the United States last May?

A: The book originated from workshops I helped Google for Startups develop nearly 10 years ago to tackle startup teams’ toughest people problems. These workshops became a highly sought-after element of Google’s accelerator program, reaching teams in 70 countries. Many said it was unlike anything else and one of the most helpful toolsets they had encountered. To extend this support beyond Google’s selective program, the book open sources these tools for leaders everywhere.

The name came from the realization that innovative teams that work on a near-impossible goal under severe time constraints can sometimes feel like being in the fire. Our workshop allows colleagues to step back from the flaming pit for just a day and consider their collaboration—especially its flashpoint—in safer, cooler air. The Bonfire Moment is a structured place and time to regroup, get back in touch with their mission, bandage relational wounds and prepare for the next push.

We believe the book resonated because startup builders often don’t anticipate the extent of people problems they will face, which can be more painful than most other challenges. When they find a book that addresses these issues and provides practical tools, they immediately find it valuable. Our priority was to be helpful rather than novel or flashy, and this commitment of ours seemed to have resonated.

Q: In your book, you identify four common traps—speed, inner circle, maverick mindset and confidence—that many startups fall into. Is it common for startups to find themselves caught in multiple traps simultaneously? Why do you think this happens?

A: In our experience, first-time founders are almost predictably bound to fall into these traps. It takes a great deal of awareness and maturity to anticipate and allocate energy to solving these issues.

So much about the work of innovation leads to these challenges. First, many investors focus on short-term results at the risk of losing sight of the long game. Second, entrepreneurs take the expedient path of building teams with trusted friends (and sometimes family members), which data show is the least stable partnership configuration because they are unlikely to face sensitive challenges head on to avoid risking their relationships. Finally, the brag culture that typifies the startup ecosystem and many corporate cultures leads founders to believe they’re alone in their self-doubt. This causes them to wear masks that can be aggressive, overly optimistic or detached and cold, inadvertently creating toxic team cultures in the process.

Q: You’ve warned that ‘ignoring people issues in favor of technical, financial and strategic issues is a fatal trap.’ Why do you think ‘very smart people get this balance wrong’ and why are these human factors such a critical issue for startups?

A: The curse of wickedly smart people is that they tend to dismiss people problems as not truly difficult, often labeling them as “soft” problems and leadership skills as “soft” skills. We often downplay their importance by saying, “it’s not rocket science.” The irony is that civilization has gotten incredibly good at rocket science. Since way back in the 1970s, NASA has been able to send a rocket 400,000 kilometers to the moon and land within 0.2 kilometers of the touchdown target.

Contrast that with our struggles to understand and predict human behavior. Social scientists are thrilled when they can explain human behavior with 50 percent precision using their most advanced experimental techniques; they call this a strong correlation. The other half is essentially unaccounted for. Somewhere out there an actual rocket scientist is laughing … or crying!

Sequoia Capital’s Bill Coughran—who cut his teeth as a researcher at the legendary Bell Labs and went on to build some of Google’s most successful products, like Search and Maps—said it best, “Engineering is easy; people are hard.” —CONTRIBUTED

Josiah Go is the chair and chief innovation strategist of Mansmith and Fielders Inc., and the co-founder of Mansmith Innovation. (www.mansmithinnovation.com)