November 28, 2022

Startups, there's no better day to plan for a reputation crisis than today

A crisis of reputation can hit from seemingly nowhere, with devastating consequences

Kim Oguilve and Reetta Ilo

Most founders think the roles of communications and press relations in the early stages of a startup revolve around scoring quirky headlines that put founders and their teams in the limelight. 

The issue with this vacuum mindset is that it disregards the external forces — beyond anyone in the company’s control — that can destabilise a company. This leads to teams feeling blindsided by reputational crises that seemingly arise out of the blue. 

But companies of all sizes and industries go through crises. Think of a reputational crisis not as an "if it happens" but "when" — and whether your startup is prepared to handle it. A positive reputation built with €1m in marketing can be destroyed in one crisis comms situation — and it might take you €10m and 10 years to build it back.


With all the recent reputational crises that we are seeing not only in European tech — like the recent Slush 100 competition case and the massive layoffs — but the FTX blowup in the US, now seems like the right time to remind the industry that there are ways to prepare.

Take comms strategy as seriously as you take your tech development

Because of a blind consensus around what comms and PR mean, some founders and their teams might not see the benefit of hiring a comms professional early on. But as we said before, just because there’s no problem doesn’t mean you don’t need help. 

A comms professional's role is to strategise how a company relates to its audience and the messages it should craft for each — and that doesn’t just mean journalists. They work with numerous stakeholders, including investors, customers, employees and suppliers. 

If hiring a comms professional is not feasible or not relevant to you right now, find help from experienced comms professionals or investors

Comms professionals also work hard to keep a positive public image around your company and understand that negative publicity is sometimes unavoidable. They’ll work with founders and other key members of the team to create a crisis communications plan — a course of action to follow when something negative and unexpected happens in your startup and you want to safeguard its integrity. 

If hiring a comms professional is not feasible or not relevant to you right now, find help from experienced comms professionals or investors. 

Always consider the socio-geo-ethical-political implications of your decisions

We live in a world that's more connected than ever, where people and information flow freely. Interconnections that you aren’t even aware of can spark a potential reputational crisis situation. Is your hardware built in a foreign factory? Are you sure they follow international labour laws? Are you selling to an audience that is potentially high-risk or vulnerable? Have you hired hundreds of employees in the rush of growth, and now you need to let them go? Does your company have a robust code of conduct that protects every employee, and how are you ensuring it’s been followed?

These, and hundreds of others, are possible scenarios you want to be prepared for. Of course, asking yourself these questions and realising there’s a reputation risk might also mean you need to change fundamental things in your company.

A comms team’s role is not to make bad things look good, but to help you anticipate situations before they arise, mitigate them and have comprehensive answers prepared for when things do go wrong. In this way, comms can actually be a powerful force that’s always working with you to make your company stronger. 

If you handle a crisis the wrong way, now you’ve got two

Poor crisis communication causes confusion in different target groups quickly. This can lead to frustration and even feelings of anger. It’s important to keep calm in the situation and not rush into replying to, for example, a client or the media — a hasty, panicked response can cause the crisis to snowball. 

Acknowledge their message and work quickly on your plan. “I will get back to you” signals that the message has been noticed, but it also gives you some breathing room to come to a consensus on how to respond. (Certainly don’t leave things too long, however!)

Remember that any message, shared internally, might also leak externally

Communicating internally is just as important, if not more important than external comms — speaking of crises that spark crises, leaving your employees in the shadows can cause unnecessary tension and stress internally, and damage your credibility with them. And remember that any message, shared internally, might also leak externally. 

Make sure that all of your employees are aware of the clear chain of command. It might look something like this:

  1. No one communicates until the CMO and CEO have been contacted
  2. An official response is prepared by the CEO, CMO and relevant parties
  3. The CMO communicates in private with the respected party
  4. All further comms are kept in private channels and handled by the CMO

With a clear chain of command, and well-prepared answers to the crisis scenarios and questions take you a long way in navigating through the turbulent waters.