Evaluate Your Startup Like an Investor: 3 Questions

Enron reported record first-quarter earnings on April 17, 2001. In November it admitted the numbers had been overstated since 1997. It filed for bankruptcy on December 2. The reporting was clean the whole way down, because people inside the company had learned what happened to anyone who questioned it.

A founder I work with runs a profitable company that grew fast last year. Capable team. Every number on his dashboard was green.

I asked him one question. “When did someone on your team last tell you that you were wrong?”

He couldn’t remember.

No dashboard reports that. If you want to evaluate your startup the way an investor would, you start there.

What your financials miss when you evaluate your startup

Revenue, signups, monthly recurring revenue, retention curves. All of it describes what already happened. None of it predicts what breaks when a funded competitor takes your best account, or when the engineer holding half your system in her head gives notice.

I was Humoniq’s fractional COO during Y Combinator’s Summer 2025 batch. They brought me in to run operations. I didn’t found the company. We raised $8.5M, the fourth largest round among about 124 companies in that batch.

I’d rather judge a company on three questions than on its dashboard. Here they are, and you can ask yourself all three.

• Can your team challenge you?
• Are you working one 90-day bet, or whichever number moved most this week?
• Would customers still pay if a competitor cut price 30%?

Most founders never evaluate their startup this way. The dashboard is easier to look at.

Question 1: Can your team challenge you?

Strong numbers can sit on a foundation that’s already failing. Sometimes for years, while the reporting stays clean and everyone senior keeps getting promoted on those numbers.

On Enron’s public earnings call in April 2001, hedge fund manager Richard Grubman asked for a balance sheet alongside the earnings. Jeff Skilling, the CEO, called him an asshole with the market listening. That’s what the company did to an outsider it couldn’t fire.

Sherron Watkins was a vice president inside Enron. On August 14, 2001 she wrote to chairman Ken Lay that she was nervous the company would implode in a wave of accounting scandals. She was right, and she was four months early. Nothing in the reporting changed. Enron filed on December 2.

On April 20, 2019, the New York Times reported on Boeing’s 787 Dreamliner plant in South Carolina, a different aircraft program entirely. That was six weeks after the second 737 MAX crash. Workers there were pushed to hit an ambitious schedule and afraid of losing their jobs if they raised a concern. Harvard Business School professor Amy Edmondson wrote about those workers in Harvard Business Review. She called their conditions “a textbook case of how the absence of psychological safety … can lead to disastrous results.”

Psychological safety is the belief that you can speak up without being punished for it. It’s what lets an employee tell you the flagship feature is a mistake before you’ve spent six months building it. Founders file it under HR and skip it. Watkins is what it looks like when someone speaks anyway and the room has already decided not to hear it. It’s also why hard feedback backfires when the safety underneath it was never built.

Audit your last month of meetings

Ask yourself three things honestly:

• When was the last time someone on your team said “I don’t agree” in a meeting?
• Do your senior people surface bad news fast, or only when they’re forced to?
• Can your newest hire question a decision without worrying what it will cost her?

If nobody argues with you, your team has already decided that arguing with you isn’t worth it.

Question 2: Are you working one bet, or whichever number moved most this week?

Most founders say they have focus. Few can show it. Compare this week’s priority list with last week’s. It takes about a minute.

Every time you reorder that list, your team restarts work. Three or four resets a quarter and they spend weeks on work you throw away. The team ships slower by the following quarter, and that’s when you start wondering whether you hired the right people. You caused it.

Check this week’s list against last week’s

• Pick the single most important bet for the next 90 days. Can your top three people say it back to you, word for word?
• Are this week’s priorities the same as last week’s?
• Can you name the one thing your team is deliberately not doing because of that bet?

A founder who can’t name what he’s dropped hasn’t chosen anything yet. He has a wish list.

Question 3: Would customers still pay if a competitor cut price 30%?

This is the question about whether people actually want what you built. Founders dodge it harder than the other two.

If a credible competitor dropped their price 30% tomorrow, what happens to your churn? If you can’t answer that without guessing, you don’t know why your customers stay, and not knowing is its own finding.

Ask your top five customers why they pay you

• Why do your top five paying customers pay you instead of the next-best alternative?
• Are customers asking you for the product, or are you talking them into it?
• What do they get from you that the next-best alternative can’t give them?

Ask five people this week. You’ll know by Friday whether you have an answer or a theory.

The trap that hits when the numbers look good

I’ve been fired five times. For about ten years I read every one of those as proof that I was the failure, and I never once asked what my boss could have done differently. I was raised to believe everything was my own fault, so I took the blame by default. My bosses took none of it.

Running teams changed where I look first. When results are bad, I check the person in charge, and now that person is me.

Then the numbers turn good, and you stop checking yourself at all. That’s the trap. You hear silence and read it as agreement. Most of the time it’s fear. By then the problem has usually been sitting there for months, and the engineer who could have named it in her first week has long since worked out that naming it costs her more than staying quiet.

My book, The Primal Trap, is about the instinct underneath the good-numbers trap. Ape Brain kept us alive in small tribes by making us guard our status and duck conflict, and that instinct didn’t switch off when we started building companies. In a company, you read a compliant team as a healthy one.

Three moves to run this week

You don’t need a board meeting or a consultant. Pick the question you couldn’t answer cleanly and run the matching move.

Ask what your team hasn’t told you

In your next 1:1, ask each person what they disagree with you on and haven’t said out loud. Then write the answer down without arguing back. Your team watches what you do next, and that’s what tells them whether it’s safe to do it again.

Protect one bet

Write your single most important 90-day bet at the top of every meeting agenda. Then list every project running right now, rank them against that bet, and kill the bottom two. Say which two you cut, and say it to the people who were working on them.

Run the 30% thought experiment

Sketch what happens to retention and new sales if your closest competitor drops price 30%. An hour with a notepad covers it.

All three are in a worksheet: the three questions, the diagnostic checklist under each, and three moves to fix the weakest one. Get the 3-Question Company Gut Check, free.

What the silence question usually turns up

Somebody on your team names a problem they’ve sat on for months. Nobody had asked, and volunteering it never looked safe. The information you need to fix the business is usually already in the building, sitting with an employee who has no safe way to hand it over.

Where this doesn’t apply

Three honest limits on the whole exercise.

If you have no team yet, question 1 can’t tell you anything. Run questions 2 and 3, and come back to the first one once you have a team.

If you’re pre-revenue, question 3 is a thought experiment with no data behind it. Go talk to ten prospects instead.

And if your numbers are already bad, skip the whole exercise. These three questions are built for the founder whose dashboard looks fine. When the reporting is already telling you something is wrong, you have a more obvious problem to solve first, and the Startup Growth Playbook is the better place to start.

None of these three answers will be comfortable. Write them down anyway, this week, while asking is still your choice. A competitor, an investor, or a resignation letter forces the question eventually, and by then someone else has already written the answer down for you. If you’d rather have someone read your answers back to you, book a call.