Check Your Startup For Symptoms Of This Malaise



Founders almost always cite lack of money as the reason for failure. But if you look deeper, the reason is more often about dysfunctional people and leadership. Sometimes it comes right back to the founder, in terms of a malaise often called “founder’s syndrome.” A few years ago I was intimately involved with a promising startup that taught me about this issue.

I’ll be short on specifics here, to protect the guilty, but I hope you get the idea. It’s not a disease, but it can kill your startup. You can find a more complete discussion of founder’s syndrome on Wikipedia, but here are a few of the symptoms I observed in the founder and CEO in this case:

  1. Advisors and staff handpicked from friends and connections. Personality and loyalty are apparently the key criteria, rather than skills, organizational fit and experience. The executive looks more for cheerleaders rather than people with real insights and ideas.
  2. Reacts defensively and talks constantly. Sometimes it’s time for quiet listening rather than talking. A strong and confident leader will always realize that a defensive response before hearing the input message in full does not impress investors or anyone else on the team.
  3. Staff meetings are for one-way communication. This founder holds staff meetings only to report crises, rally the troops and get status reports on assignments. There is no concept here of team strategy, development and shared executive agreement on objectives.
  4. With no input and no buy in from the team, the founder sets extremely ambitious objectives. These objectives are set based on the desires and dreams of the founder, with no recognition of technical realities, costs or time required.
  5. Over time, becomes more and more isolated and paranoid. The first clue is some veiled comments about the motives of staff members, advisors and investors. These become more specific as the situation gets direr, to the point where key members begin to desert the ship in disgust.
  6. Highly skeptical about planning, policies and advisors. The founder claims “they’re overhead and just bog me down.” The founder perceives their experience as more applicable than the input of others, and formal planning and policies are just a way of introducing unnecessary bureaucracy.

In the beginning, we all found the startup founder to be dynamic, driven and decisive. He had a clear vision of what his organization could be. He seemed to know his customers’ needs and was passionate about meeting those needs. He had just the traits one would expect for getting a new organization off the ground. However, he had other traits, including the ones listed above, which became major liabilities.

The undoing of the company began when a potential investor, after months of search, was ready to put up $1 million dollars, but made it clear that his firm would likely need to replace the founder with someone with more credentials and experience in this industry. With that revelation, the founder killed the investment deal and every other potential deal that raised the same issue.

Of course, no situation is this simple. There were product development problems, pricing problems and early customers who demanded more features and delayed contractual payments. The ultimate result was a startup founder who exhausted his personal funds, drained the investments capability of friends and drove away the team one by one.

For me, this is a most frustrating and difficult problem for any advisor or team member to deal with, since communication and learning can only occur when someone is open and listening. If any of you out there have seen this, or have some experience or ideas on how to deal with this situation effectively, let me know. You will be a hero if you have the cure.

For all you founders out there, if you find this article anonymously taped to your computer, it might be time to take a hard look at yourself in the mirror. We can’t change you, but you can change yourself. It could save your startup!


Reprinted by permission.

Image credit: CC by Quinn Dombrowski

About the author: Martin Zwilling

Martin is the CEO & Founder of Startup Professionals, Inc., a consultancy focused on assisting entrepreneurs with mentoring, business strategy and planning, and networking.

Martin for years has provided entrepreneurs with first-hand advice, mentoring and business plan assistance as a startup consultant. He has a unique combination of business and high-tech experience, and executive mentoring and connecting startups with potential investors, board members, and service providers.

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