Jan 2, 2019 · 33m · a16z
a16z Podcast | Crisis Communications
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In this episode of the a16z podcast, marketing and communications experts Margit Wennmachers and Kim Milosevic discuss essential crisis management strategies for startups and tech executives. They detail how companies can establish internal operational transparency, navigate fact-gathering, communicate authentically during high-stakes situations, and earn long-term public trust.
How this conversation actually went
Every chapter scored 0–10 on four independent dynamics. Hover any point for the reasoning behind the score. The host holds 24.3% of the talking time here. How this is scored →
The host as informed peer 3.0 Guest teaching 3.6 Guest disagreement 3.0 The host pushing back 2.4
speaking balance: gold is the host, purple is the guest (3 minute bins)
Sharpest disagreement ▶ 17:21 Margit rejects automatic apologies
Margit emphatically shuts down Sonal's assumption that companies automatically apologize during a crisis, stating she totally freaking disagrees.
Hardest push from the host ▶ 7:56 Host questions including legal in crisis roomsSonal explicitly challenges standard PR practice by asking if inviting lawyers into a crisis room is actually dangerous.
Biggest teaching moment ▶ 7:56 Margit explains legal privilegeWhen Sonal questions legal's presence in a war room, Margit directly educates her on attorney-client privilege and protected communications.
The host holds their own ▶ 22:11 Host frames goodwill as a bank accountSonal demonstrates domain insight by introducing the bank account of goodwill metaphor, which the guests validate and expand upon.
the scores for every segment, with the reasoning behind each
| Chapter | Topic | The host as informed peer | Guest teaching | Guest disagreement | The host pushing back | Why |
|---|---|---|---|---|---|---|
| Defining a Crisis and Cultivating a Culture of Transparency | 3 | 2 | 1 | 1 | Sonal sets up the foundational definitions of a crisis and notes tech's emerging status as a global power center deserving scrutiny. The guests collaboratively elaborate on defining crises and building a pre-existing culture of transparency. | |
| Immediate Actions, Key Stakeholders, and Fact Discovery | 2 | 5 | 3 | 3 | Sonal asks whether having legal present in a crisis war room is dangerous. Margit immediately corrects her, explaining that having legal in the room ensures attorney-client privilege and legal protection. | |
| Managing Public Perception and Crafting Authentic Responses | 3 | 5 | 6 | 3 | When Sonal suggests that companies now follow a standard playbook of automatically issuing public apologies, Margit forcefully disagrees, citing VW's approach and Ben Horowitz's adage about eating shit. | |
| Goodwill Reserves, Real-Time Monitoring, and Internal Communications | 4 | 2 | 1 | 2 | Sonal introduces the concept of karma points and a goodwill bank account to illustrate brand trust reserves, which the guests adopt. Sonal also asks practical questions regarding war room monitoring and managing employee leak risks. | |
| Post-Crisis Recovery, Media Strategy, and the Turnaround Narrative | 3 | 4 | 4 | 3 | Margit reframes Sonal's premise of distinct crisis phases, explaining that crisis management is continuous, and strongly advises against ever lying to the media or rushing a turnaround story. |
Statements from this episode (14)
Wennmachers: Never waste a crisis; use it to improve the company
“The golden principle is to never waste a crisis, because something is happening at or to the company, that's about for customers, employees, or whatever the case may be. And then It's an opportunity to make the company better, better as a result.”
Milosevic: Brands are defined by crisis response, not opportunistic marketing
“I think it's more like your brand is defined by how you handle these situations versus you taking a moment to say, how do we turn this into a brand opportunity?”
Milosevic: Startup founders receive immense responsibility before developing crisis leadership skills
“These young companies, they're raising a lot of money. These founders are getting an immense amount of responsibility very quickly and very early, a lot of times before they have a chance to build their leadership skills and handle a lot of these situations.”
Wennmachers: Including lawyers in crisis discussions establishes protective attorney-client privilege
“No, that makes the conversation privileged, which protects you.”
Wennmachers: Crisis PR firms operate almost entirely through private referrals
“That business is so discreet. It works purely by referral. And if you work with them, then you know, like, oh, they handled this and they handled that, but like, they can't talk about their work, so it's purely a referral thing.”
Wennmachers: When a company makes a mistake, apologize fully without nibbling
“When you eat shit, don't nibble. So if you, if you're going to own it, which if you actually screwed up, you should.”
Wennmachers: Salesforce defused early service outages by creating a public status site
“Salesforce actually has, was a really good example way back in the day when I was still at OutKast. They had some outage from, that was way more common then because, you know, we weren't all as savvy at it as we are now, and what they did, they went full trans…”
Wennmachers: Without prior goodwill credits, company mistakes immediately cause trust deficits
“Yeah, that's sort of in my head, like, you basically have a bank account of Goodwill, right? You have credits and debits, and if you If you don't build up any credits with your community, whether they be customers or employees or investors or press or whatever…”
Milosevic: Employees should be informed of major stories before they break publicly
“One of the most important parts of this whole crisis scenario is what happens on the internal communication side. It is so important to be talking to the employees about what's going on. Ideally, they know if it's a big story that's going to break, they know a…”
Wennmachers: Establish internal comms before crises to maintain trust through legal silences
“I will also say you ought to start an internal communications cadence very early on. Don't wait for the crisis. You want to have built trust with the employees because let's say there's a lawsuit. Your company all of a sudden is in a lawsuit. You feel it's com…”
Wennmachers: Lying to the media during a crisis permanently destroys credibility
“I actually like to know really what happened, because once you lie to the media, you're basically fucked.”
Milosevic: Founder CEOs cannot separate personal scandals from company brand damage
“There is no division, and especially if you're a founder, CEO, you and the company are essentially the same, and even if the focus, let's say, of the stories are on the personal issue, you Guess what? Your company is going to be mentioned in every single one o…”
Milosevic: Pitching a turnaround narrative prematurely rehashes past crisis details
“Don't rush it. I think that's probably one of the biggest, you know, mistakes that companies make is by trying to do it too early when they don't have enough progress or milestones or growth to show that they have started to turn around. And they may put their…”