Sensemaking in Software Startups: The Founder as Sensemaker

Sensemaking is the process of making sense of complex and uncertain situations by evaluating propositions socially. That is, a team comes together, iterates through propositions for forward progress, and one-by-one evaluates and establishes whether the proposition being reviewed has broad consensus or broad conflict within the team.

If a proposition is widely supported, consensus forms the basis for action. If a proposition is in conflict, then that proposition requires further review before action can be successfully taken.

Bringing a subtractive design lens to this kind of iterative review of propositions is often helpful. That is, always consider the possibility of merely deprecating a feature if the value proposition is in question or the technical debt associated with the feature is distracting or delaying the team’s progress.

It is a critical skill for founders of software startups, who must navigate a rapidly changing landscape and make decisions with limited information.

The Role of the Founder as Sensemaker

The founder of a software startup plays a central role in sensemaking for the company. The founder is responsible for developing and articulating the company's vision, setting its strategic direction, and building a team that can execute on that vision.

To do this effectively, the founder must be able to make sense of a variety of information, including:

• Market trends and customer needs
• New technologies and their potential applications
• The competitive landscape
• The company's own strengths and weaknesses
• The company’s culture, subcultures, and community

The founder must also be able to communicate their sense of the situation to others in a clear and concise way. This is essential for building alignment and momentum within the team, and for attracting investors and customers.

Sensemaking in Market Discovery and Development

One of the most important tasks for a software startup founder is to discover and develop a market for their product or service. This involves understanding the needs of potential customers and developing a value proposition that addresses those needs.

Sensemaking is essential for this process. The founder must be able to make sense of customer feedback, market data, and competitive intelligence to identify opportunities and develop strategies to capitalize on them.

For example, the founder of a new enterprise software company might interview potential customers to learn about their pain points and unmet needs. The founder could then use this information to develop a value proposition that highlights the benefits of their product or service.

Sensemaking in the Transformation of Technology into Value Proposition

Another critical task for a software startup founder is to transform technology into a value proposition for customers. This involves understanding the capabilities of the technology and identifying how those capabilities can be used to solve customer problems or create new opportunities.

Sensemaking is again essential for this process. The founder must be able to make sense of complex technical information and identify the potential applications of that technology in the market.

For example, the founder of a new artificial intelligence startup might have a team of engineers who have developed a new algorithm for image recognition. The founder must then be able to make sense of this algorithm and identify the potential applications of the technology in the market. For example, the founder might realize that the algorithm could be used to develop a new product for online retailers that helps them to identify and recommend products to customers.

Lightweight Methods for Agile Process as Sensemaking

Agile software development is a popular approach for software startups but its adoption is often riddled with dark sides when it is taken as a quick-fix, one-side-fits-all, or cargo-cult approach to fixing software teams when problems frequently stem from taking misguided actions without deeper consideration. There is no quick fix to software. Agile is a flexible and iterative approach to development that allows teams to respond quickly to change, if and only if they start from first principles.

Sensemaking is an essential part of the agile process. Agile teams must be able to make sense of customer feedback, market data, and their own progress to make informed decisions about what to build and how to build it.

There are a number of lightweight methods that agile teams can use to support sensemaking. Some of these methods include:

• Standups: Standups are brief meetings where team members share what they worked on yesterday, what they plan to work on today, and any blockers they are facing. This helps the team to stay aligned and to identify any potential problems early on. Don't like standups? Fine. Some teams do better without standups or by doing sit-downs in a quick digital communication no matter the choice of tool. A standup or one-on-one is just a label for teams or individuals that don't communicate well.
• Retrospectives: Retrospectives are meetings that teams hold at the end of each iteration to reflect on what went well and what could be improved. Like post mortems after show stopper bugs, this helps the team to learn from their experiences and to continuously improve their process by establishing consensus on what works and what doesn't and how to get more of the former and less of the latter. It's the learning cycle in Lean Software's build-measure-learn paradigm.
• Kanban boards: Kanban boards are a popular tool for visualizing work and managing flow. Kanban boards can help teams to identify bottlenecks and to prioritize work effectively. The key takeaway is that it's not the board that makes a team successful. Remember, the music is not in the piano! Rather, it's the emergent interaction around the board, whether it is analog, digital, or hybrid.

Conclusion

Sensemaking is a critical skill for founders of software startups. By understanding how to make sense of complex and uncertain situations by relying on and interacting with their teams as much as possible, founders can make better decisions, more quickly about market discovery and development, the transformation of technology into value proposition, and the agile development process.

Unifying the Role of Founder as Sensemaker

The role of the founder as sensemaker can be unified by focusing on the following key principles:

• Customer obsession: The founder should be constantly obsessed with understanding the needs of their customers. This can be done through customer interviews, surveys, and other feedback mechanisms.
• Data-driven decision making: The founder should make decisions based on data and evidence, rather than intuition or gut feeling. This can be done by collecting and analyzing data from a variety of sources, such as customer feedback, market research, and competitive intelligence.
• Iterative experimentation: The founder should be willing to experiment and learn from their mistakes. This can be done by developing and testing hypotheses, and then iterating on their approach based on the results.

By focusing on these principles, the founder can develop a deep understanding of their customers and the market, and use that understanding to make better decisions about all aspects of the business.