Psychological Safety 🤝 Startup Success

According to science, psychological safety amongst team members is one of the top predictors of team success.

Psychological safety is the belief that you won’t be punished or humiliated for speaking up with ideas, questions, concerns, or mistakes. [source]

While the formal definition above is about emotional safety, I’ve also seen the phrase “psychological safety” used in a more catch-all way, as a proxy for one’s engagement in the workplace.

One of the things I find most contradictory about creation of psychological safety in startups, is that startups, by definition, do not have a foundation of financial reliability. And financial reliability is a pillar of psychological safety.

To correct for the lack of financial reliability, performance is needed.
For there to be performance, there needs to be accountability. For there to be accountability, you need financial reliability.

It’s an infinite cycle of cause & effect. Trying to turn the cycle upwards is the startup grind.

Ideally, your startup team looks like this from inception to exit.

But startups are high stakes + people respond to that stress differently. I’ve seen psychological safety in a team can can be either in an upward spiral or downward spiral.

I’ve seen teams caught in the vicious cycle fail to get anything off the ground at all. The downstream effects of this can be disastrous: Team members quiet-quitting, millions of dollars spent on products that never launch, team leads that you’ve invested 16 months into quitting with no notice, etc.

There can be many triggers of the vicious cycle. From a long bear market, to a leader who quiet-quits on their team, to foundational parts of your needs at work not being met, etc… One of the recurring triggers I’ve seen since joining web3 is team members from more mature organizations joining a startup and having a hard time dealing with the culture, the ambiguity, the pace, the agency, or developing the learning velocity and grit that are all required to succeed in a startup.

In that scenario, the downward spiral of performance accelerates reflexively.

This is the struggle.

Once the downward spiral starts, it can take years & millions $$ to unwind. Up to & including turning the whole team.

Startup teams are doubly tricky because low psych safety can cause low financial safety & visa versa. The reverse is also true (high psych safety can cause high financial safety & visa versa).

TLDR - Teams with low psychological safety can demolish your startup (or DAOs) ambitions.


Thanks so much for this post, Owocki! Something else comes to mind when thinking of psychological safety: stability.

Even thinking about Maslow’s hierarchy, there is the aspect of homeostasis within physiological needs. In terms of what this looks like within work, I considering balance and stability:

  • Do people know what to expect from day to day (at least in a broad sense)?
  • Are their unexpected changes in personnel, structure, processes, and so on?
  • Is there a sense of balance or harmony between work and personal life?

And within the more tangible - like pay and benefits - are those providing psychological safety?

  • Pay: In additional to whether the pay is equitable and fair, is it paid out to contributors or team members in a way that makes sense for their needs? Or will payouts be another layer of stress every month? Does the pay offer the level of stability that individual is wanting or needing?
  • Benefits: Is there a chance they may worry about unexpected expenses like health care needs, child care, tech breaking, etc. Do benefits touch on the typical needs of your team?
  • Longevity and financial sustainability: Is there an expectation for layoffs - meaning the two things above may suddenly end (with or without some sort of severance)?

Looking forward to thinking about this more.

1 Like

I enjoyed this article, particularly the emphasis in Blackfoot Wisdom of the collective rather than the individual, or perhaps that should read ‘of the individual through community’, so thought everyone here might:

1 Like