Four Lessons From the Carta Communications Train Wreck

Carta, an otherwise boring company solving a mundane-if-important problem, managed to get itself in the news this past week for all the wrong reasons. The fiasco was the result of CEO Henry Ward writing a post on recent negative press that was presumably intended to inoculate his audience, but instead backfired spectacularly. Headlines in the past week:

• Carta’s CEO reaches out to customers about bad press, alerting them to bad press
• What Carta CEO’s self-inflicted PR crisis could mean for the company
• Carta’s employees describe a culture of fealty to erratic and vindictive CEO

The catalyst for all this seemed to be, in particular, an article in Fortune entitled Inside the mounting litigation and high turnover at startup unicorn Carta.

Because our purpose is to take a few communications lessons from this PR mess, I’m not going to dig into the story itself. Instead, we’re going to study what I guess happened — and there are some big guesses here — and then make four recommendations that could prevent something like this from happening at your startup. Note that these recommendations will work even if my guesses are entirely off the mark.

My Guess as to What Happened

I decided to write this post because the key mistake, the Medium post, is one I could have seen myself making. So I felt some empathy with the author for deciding to write it, if not much agreement with the angle. Why? Because I like learning and then sharing what I’ve learned. I don’t like to gloss over things, I like to go into detail. I like to explain things. Turns out that’s a great habit for an industry blogger, but for a CEO, not so much. There is a standard playbook for communications crises and writing a post like this is definitely not included.

I also felt empathy for the desire to communicate to your employees. This is increasingly frustrating in today’s world because you must assume that any internal all-hands email can and likely will be released externally. Therefore, you need to write any internal all-hands email as if it’s going to be released externally. Now, the dangerous logic: well, if you’re going to write it as if it’s going to be released externally, then why not just publish it yourself? I feel like this is perhaps the path this post took. Quote:

I know other CEOs have to deal with this so I wanted to share what I shared with employees in case it’s helpful for other CEOs thinking through similar problems.

Sharing this with employees was dangerous because it might well have leaked. But publishing it yourself to create a backfire was darn-near (and might well prove) career suicidal. And it’s definitely not helpful for other CEOs. In fact, other CEOs should use it as a counter-example.

But here’s the part where I have zero empathy. Leading with a quote like this:

To anyone sophisticated in communications and when used in this context, this quote means one thing: “I have no idea how to deal with the press and am bitter about it because I keep not getting the result I want.”

Period. That’s all it means.

No CMO could ever think this way. They wouldn’t last a month in their job. But founders, and some CFOs, think this way: “I’m not the problem. They’re the problem.” Instead of viewing the media [1] as a world they must learn to navigate — and ideally turn to their advantage — they let one or two early setbacks bruise their ego and never get back on the horse. Thus, they never learn how to ride it. [2]

I worked with one, pretty accomplished, public company CFO who’d always say: “I hate the media, they always misquote me.” Which again translates to me as: “I have no idea how to work with the media.” Were you really misquoted or did you actually say something you regret? Did they trick you into thinking the interview was over and slide in one more “what do you really think” question? Did you “buy the question” and end up getting indirectly quoted? [3]

Who hurt you?

Perhaps some have the luxury of writing off the media as “sensationalized noise” written by people with “perversely distorted” incentives. But no CMO possibly can. And no founder/CEO should either.

What should you do instead? Follow these four rules:

• Hire communications professionals and listen to them.
• Learn the rules of the game.
• Use the right spokesperson for the content.
• Build a few key relationships.

Hire Communications Professionals and Listen to Them

It’s hard to imagine that any communications professional approved of Carta’s chosen communication strategy of attacking the press via a long blog post that calls the press biased, accuses them of doxxing, says they build their careers on company “takedowns,” debates facts on seemingly pending legal cases, and calls a former employee “a misogynist and racist.” Among other things.

This, simply, is not how it’s done. For many reasons. The CEO debases himself, effectively dragging himself through the mud. The attack on the press will limit future relationships with journalists. And I’m guessing the lawyers are not in love with this strategy, either. But more than anything, you amplify the negative story. You give it a second life. A second news cycle. And now people like me are even editorializing about it.

Anyone who says “all PR is good PR,” never worked in public relations. Or they did and tried to use that to dodge an executive screaming at them — as I have been screamed at: “how, how, … how did you let this happen?”

All PR is not good PR. This is not a good story for Carta. With the stroke of his pen, the CEO transformed this story from a sadly mundane “yet another tech sexual discrimination case” [4] to a fiery “CEO writes nutty blog post” [5].

Learn the Rules of the Game

In three words: get media training.

While I generally don’t recommend using your PR firm for media training, you can and should ask them for referrals. The best media trainers are often independents, typically retired journalists who teach you the tricks used on the other side of the interview table. The older and more curmudgeonly, the better. Ask me about the time the media trainer said he tricked a nun into naming a murder suspect by closing his notebook and pretending the interview was over. Yes, that’s who you want training you.

In my opinion, the Brits have the toughest press, so I generally prefer British media trainers when you can find them. Though, that might be over-preparation to deal with the local tech blog.

But no matter who you get it from, get it. Do it every year. Find the firm you like best. Make their program your standard spokesperson certification. But do it.

The most important benefit here is indirect. You’re getting your company to understand and admit that working with the media is playing a game with rules, and the better you understand those rules and the more you practice, the better you play.

That indirectly prevents the Carta rant. You don’t think to blame the media for being the media, because you understand that dealing with the media is part of your job and you understand the rules of the game. You don’t start interviews bitter, you start dialed-in. And you don’t take matters into your own hands to try and right a perceived media wrong. You work with the media.

Use the Right Spokesperson for the Content

Even if there were some big media fuss here, the CEO’s post would still be the wrong answer because you’re not matching the spokeperson to the content.

If there were a pure media problem, the most you should consider is a post from the VP of communications to discuss the Fortune story. (And they’d almost certainly refuse to do it, so see the “listen” part of point one.) But the principle is to match the spokesperson to the content. If we’re discussing a problem in media relations, then let the VP of communications handle it. Perhaps a better example is who should answer an all-hands question about the Fortune story? The VP of communications.

If you’re worried about customers, the most you should consider is an email from your chief customer officer to the customer base saying something like: “you may have seen story X, we take any allegations of Y seriously, we are looking into them and will act accordingly once our investigation is complete. Meantime, we continue to be focused on meeting your needs and building our company. If you have any questions, call your CSM or AE. Thank you for being a customer.”

While I know some CEOs like to be all over everything, in every detail, and show everyone that fact (and I was perhaps one of them), the CEO should address CEO-level issues and other issues should be delegated. The CHRO should address HR issues. The CMO and/or VP of communications should address media. The general counsel should address legal. When the CEO addresses an issue, it has the effect of elevating the issue. That can be powerful if you want to demonstrate your commitment to a new direction. It can backfire when addressing “negative press.” [6]

Build a Few Key Relationships

Finally, once you understand the media game, I think every founder/CEO should “adopt” a handful of key journalists and/or industry analysts. That means they meet with them periodically and work to build personal, long-lasting relationships. They can provide information on background. They can share scuttlebutt. They can get dinner after the meeting or event.

This has two benefits. First, it helps the founder/CEO develop a deeper understanding of the media world, such as the pressures and constraints of the journalist or analyst job. Second, it helps build a relationship that might buy you a reference or a quote in a story, a mention in an analyst report, a few millimeters on a quadrant or wave, or simply the benefit of the doubt when the company is under attack. As well as a friend with whom to have a beer twenty years later — as I still do with a few.

In this post, I’ve offered four recommendations for how your startup can run a better communications program and avoid problems like those currently faced by Carta. I hope you follow them.

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Notes

[1] By media here, I mean to include not only the traditional press and blogs, but also industry analysts and thought leaders, and eventually financial analysts. Basically, anyone thinking about, speaking about, and/or writing about your company.

[2] I’ve been blessed to have worked with some great media trainers over the years, including Martin Banks and David Tebbutt. I also took the Salesforce media certification program whose final exam rivaled only the road test for my French driver’s license in its degree of difficulty and anxiety production.

[3] Buying the question refers to letting the journalist put words in your mouth. Example: “Dave, so are you saying that Oracle is evil?” Any answer other than a clear, “no” will likely result in an article that says Dave said Oracle was evil. Note the absence of a direct double-quote, the hint that I didn’t actually say it. (Yes, that’s fair under most rules of enagement.)

[4] I don’t subscribe to Fortune so I’m assuming that’s the story based on the lede. And no, societally, it’s not a good thing that such stories are run-of-the-mill. But from a Carta PR perspective, it could have been. Think: “oh, another one did it.” That’s not breaking news. That’s not man bites dog. Unfortunately, “CEO writes story that fuels negative news cycle” is.

[5] These are not actual quotes. I am using double quotes to contain the story concepts.

[6] Note that I’m making a deliberate distinction between “the Fortune story” and “the allegations within the Fortune story.” “How did we get bad press and what are we supposed to say about it,” is a media/comms question and questions about allegations of sexual discrimination and/or harassment are a CHRO issue. Personally, I think culture is a CEO issue, so to the extent the allegations are cultural more than episodic, they quickly become a CEO issue for internal comms.