Yesterday, a founder in our network shared a painful story. Six months into a critical vendor relationship, they discovered their vendor had misrepresented their capabilities, experience, and team size. The project failed, costing the startup $180,000 and precious time they couldn’t get back. Through our work at Do Not Work With (DNWW.io), we’ve learned that asking the right questions – and understanding how to interpret the answers – can prevent most vendor disasters.

Let me share the questions that reveal the truth about potential vendors, along with guidance on what to listen for in their responses.

Understanding Their Business Foundation

“How long have you been working with companies at our stage and in our industry?”

This question seems simple, but listen carefully to how they answer. A trustworthy vendor will be specific about their experience and open about any gaps. They should give concrete examples of similar projects, including both successes and challenges they’ve overcome.

What often happens is vendors will speak generally about “years of experience” without specific examples. One founder in our network noticed their potential vendor kept referencing work from five years ago, with no recent examples. This turned out to be because they had lost their entire technical team and were essentially starting over – crucial information that only emerged through persistent questioning.

Exploring Their Process

“Walk me through how you handled a project that faced unexpected challenges.”

The power of this question lies in its ability to reveal their problem-solving approach and communication style. Pay attention to three key elements in their response:

First, how transparent are they about the challenges? Vendors who only share success stories may be hiding crucial information about their capabilities. Second, what role did their client play in the solution? This reveals their collaboration style. Third, what specific processes did they implement to prevent similar issues in the future?

Verifying Their Team

“Who will be doing the actual work on our project, and what is their experience?”

This question has saved countless founders from the classic bait-and-switch, where senior team members pitch the project but junior staff handle the execution. Ask for specific names and backgrounds of team members who will be assigned to your project.

One startup in our network adds a brilliant follow-up: “Can we have a technical discussion with the actual developers who would be working on our project?” This simple request has revealed numerous cases where the promised team didn’t actually exist.

Understanding Their Capacity

“What other projects will be running parallel to ours, and how do you manage resource allocation?”

Listen carefully to how detailed and specific their answer is. A vendor who can’t or won’t provide clear information about their workload may be overextended. You’re looking for transparency about their capacity and specific examples of how they handle multiple clients.

A founder recently shared how this question revealed that their potential vendor was planning to handle their project with the same team that was already working on three other major projects. This transparency allowed them to have a realistic discussion about timelines and expectations before any commitments were made.

Probing Their Infrastructure

“What systems do you have in place for project management, communication, and quality control?”

The sophistication of their answer reveals a lot about their operational maturity. They should be able to describe specific tools, processes, and checkpoints they use to ensure project success. Vague answers about “staying in touch” or “maintaining quality” are red flags.

Understanding Their Financial Health

“What is your company’s financial stability, and can you provide evidence of it?”

This question requires diplomacy, but it’s crucial. A vendor’s financial health directly impacts their ability to deliver. Listen for specific answers about years in business, current client base, and company size. Consider requesting basic financial references or proof of stability.

Exploring Their Risk Management

“What could go wrong with this project, and how would you handle those scenarios?”

This question tests both their experience and their honesty. A good vendor will have thought through potential risks and have specific mitigation strategies. Watch out for vendors who claim nothing could go wrong or who can’t provide specific examples of how they’ve handled past challenges.

Verifying Their Claims

“Can you provide references from clients who had projects similar to ours, including at least one client who faced significant challenges during the project?”

The key here is to listen for hesitation or deflection. A strong vendor will have references ready and will be open about projects that faced challenges. When checking these references, ask about specific aspects of the vendor’s performance:

Their communication during difficulties, their adherence to timelines and budgets, and their technical capabilities compared to what was promised.

Understanding Their Exit Process

“What is your process for handling project transitions or terminations if things aren’t working out?”

This question often makes vendors uncomfortable, but their response tells you a lot about their professionalism and confidence. They should have a clear, documented process for transitions, including data handover, knowledge transfer, and dispute resolution.

The Context Questions

Finally, there are questions you need to ask about the broader context of their work:

“How do you stay current with industry changes?”
This reveals their commitment to professional development and innovation.

“What partnerships or certifications do you maintain?”
This shows their investment in quality and professional standards.

“What projects have you turned down and why?”
This reveals their ethical standards and understanding of their own limitations.

Beyond the Questions

Remember that asking these questions is just the beginning. Document their answers carefully and verify their claims through independent research. Use platforms like DNWW.io to check for any reported issues or patterns of behavior.

Pay attention not just to what they say, but how they say it. Are they defensive about certain questions? Do they provide specific, verifiable information, or do they speak in generalities? Their reaction to these questions often tells you as much as their actual answers.

Finally, trust your instincts. If something feels off about their responses, dig deeper. The most expensive vendor relationship is the one that fails after you’ve invested time and resources. Take the time to ask these questions thoroughly, verify the answers, and make an informed decision about who you trust with your company’s future.