Why Every Startup Needs “I-O Psych” (Wait, What’s That?!)

The first part of my series, Startup DNA, that decodes organizational science in startups. Originally published on Medium and Linkedin.

I found myself in an unexpected place back in April: sitting in a conference room in Chicago, completely absorbed by a presentation on psychosocial dynamics among NASA space analog crews. As a former molecular biology researcher turned startup chief of staff and advisor, I wasn’t exactly the typical audience member at the Society for Industrial-Organizational Psychology (SIOP) conference. But watching research unfold about how these small, high-stakes teams operate — from their communication networks to their leadership dynamics — I had an epiphany about early-stage startups.

Both environments share striking parallels: small teams operating under extreme pressure, limited resources, and the constant threat that one wrong move could spell disaster (unless they troubleshoot effectively). The research labs around the entire country studying these NASA crews are uncovering insights that could revolutionize how we think about startup team dynamics. Yet most founders have never heard of industrial-organizational psychology (a.k.a. I-O psychology, or I-O psych), let alone considered how it might prevent their startup from becoming another failure statistic.

The Hidden People Problem

At least one in four startups fail due to problems with human capital — whether it’s culture misalignment, poor hiring decisions, or ineffective leadership. But I’d argue the real number is much higher. In my experience advising early-stage companies, chatting with others in my network, or researching failure statistics online, almost every startup failure can be traced back to a human capital problem at its core. After all, it’s humans making the decisions that lead to failure, whether those decisions are about product, market, or timing.

The Science Behind the People

I never planned to become obsessed with I-O psych. As the son of two doctors, I found myself in graduate-level biology classes, the only undergraduate senior not headed to medical school or a PhD program. But while my peers were prepared for their white coats, I was analyzing something else: which of my classmates would become the doctors I’d want at my bedside, or the research leaders who would actually advance their fields.

It wasn’t just technical knowledge. The standouts consistently demonstrated three key traits or competencies (what I-O psychologists call KSAOs, or knowledge, skills, abilities, and ‘other’ characteristics): (a) they could bring diverse perspectives into discussions, bridging both technical and non-technical concepts; (b) they engaged effectively with others rather than staying heads-down in their work; (c) and they asked questions that demonstrated genuine intellectual curiosity, not just knowledge checking.

My gut told me this wasn’t just idle speculation during my specialized seminar in mammalogy (i.e., the study of mammals). It was my first practical application in talent assessment — applying scientific rigor to understanding human capability and potential. The misconception that I-O psychology is just “soft science” couldn’t be further from the truth. Reading a research paper about talent selection methods is about as quantitative as analyzing gene expression data.

Bridging Two Worlds

My journey to I-O psych was no where near straightforward. I double-majored in molecular biology and human & organizational development in college, never quite sure how these seemingly disparate fields would intersect. The latter gave me a holistic understanding of human psychology in organizational contexts, while my biology background definitely instilled a rigorous, systematic approach to analysis. This unique combination proved invaluable when I found myself interning at a highly selective and competitive hedge fund often described as a “black box” due to its proprietary strategies in just about everything. I joined the firm’s niched talent assessment team, where scientific principles meet human capability evaluation.

At 23, I found myself interviewing technical PhDs from top universities around the world, tasked with developing frameworks to identify the best talent for highly specialized roles. What I learned was that assessing human capability is both an art and a science — there are established principles, but it takes experience to apply them effectively in real-world situations.

This is where I do think most startups go wrong. They treat hiring as an intuitive process rather than a scientific one. The same founder who would never dream of launching a product without rigorous testing will often build their founding team based on gut feel or convenience.

The NASA Parallel

I-O psych is not just about hiring, however. Let’s return to those space analog crews. Research shows that in these high-stakes environments, team dynamics aren’t just important — they’re make-or-break. When communication breaks down or leadership falters, the mission is compromised. Doesn’t this sound familiar, founders?

Effective leadership in space missions involves shared leadership roles and adaptability. Astronauts are trained in both leadership and followership to navigate dynamic team structures during long missions. Founders and team members in startups often switch between leading and following depending on the situation. This fluidity is essential for navigating uncertainty and leveraging diverse expertise.

Very similar principles apply to early-stage startups:

1. Resource constraints. Both environments demand maximum efficiency with limited resources. Poor team dynamics waste precious time and capital.

2. Innovation under pressure. Space crews must solve unprecedented problems with whatever they have on hand. Your startup team needs the same capability — but are you assessing for it?

3. Communication networks. NASA crews develop specific protocols for clear communication under pressure. Your startup needs the same intentional design in its communication structure.

4. Team cohesion. Like space crews confined together, startup teams must resolve conflicts quickly and maintain functionality under intense pressure. The wrong team dynamic can doom even the most promising venture.

Whether you’re sending humans to Mars or bringing a new product to market, understanding the science of human behavior in organizations isn’t just helpful — I’d argue unapologetically that it’s mission-critical (no pun intended).

The I-O Psych Advantage

Here’s what founders need to understand: your company is fundamentally about people. You can have a brilliant idea, but without the right people with the right capabilities in the right roles, that idea will never materialize. This isn’t just about hiring — it’s about understanding the science of how humans operate in organizational settings.

The field of I-O psych offers evidence-based frameworks for:

• Assessing job-relevant knowledge, skills, abilities, and other characteristics (KSAOs)

• Building and maintaining high-performing teams

• Developing leadership and management capabilities (yes, they’re different!)

• Creating sustainable organizational cultures

Most founders (and people in the entrepreneurship world) I’ve encountered have never heard of I-O psychology. This knowledge gap represents both a challenge and an opportunity. While many startups invest heavily in product development and market research, they often rely on gut instinct for their most important asset — their people.

The science exists to make better people decisions. It’s just that we just need to use it.

Moving Forward

Over the next series of articles, I’ll dive deep into specific I-O psychology principles that anyone in the startup realm should know. From the science of early hiring decisions to building high-performance team dynamics, I want to explore how this often-overlooked field could be the difference between a startup’s success or failure.

Because while watching those NASA researchers present their findings, one thing became crystal clear: whether you’re sending humans to Mars or bringing a new product to market, understanding the science of human behavior in organizations isn’t just helpful — I’d argue unapologetically that it’s mission-critical (no pun intended).

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Startup DNA decodes the organizational science crucial to all companies, particularly early-stage startups. Ben Wong is a former gene-editing researcher, ex-D. E. Shaw generalist, startup advisor, and incoming Stanford GSB student who applies empirical frameworks to drive strategic growth.