In my experience as an advisor to entrepreneurs, business startup founders most often point to a shortage of funds as the primary cause of their startup failure.
Yet I often see evidence that points right back at the founder or business owner, attempting to maintain excessive power and influence over of the effort, leading to a wide range of problems and a dysfunctional team.
In fact, this problem is so common among business startups, that is has been tagged with the name "founder's syndrome" or "founderitis." I experienced a case of this firsthand a few years ago as a supporting executive in a promising startup that unfortunately didn't survive.
I'll mask some specifics here to protect the people involved, but I suspect you will easily get the key indicators:
1. Autocratic leader who sets arbitrary goals with no input.
Every business founder needs to have a vision and ambitious objectives, but needs to elicit real validation and buy-in from the team before embarking on an high-risk journey. Key elements of every startup challenge include timeframes, costs, people required, and technical realities.
For example, in our case we were all told that the product had to be developed in six months, with a large list of innovative features. The founder ignored multiple push-back efforts from key members of the team, and suggested more commitment as the solution.
2. Co-founder and advisors are picked from loyal associates.
Some founders seem more concerned about surrounding themselves with cheerleaders than people who have complementary skills, and the confidence to stand up and be heard. Prior friendship and a compatible personality for them are key attributes, rather than expertise or experience.
In my situation, the founder brought with him a couple of loyal business associates from a prior business, into a new business arena, where they had no direct experience. Since he and they had been successful in the previous business, all assumed success in this one.
3. Founder minimizes the focus on formal plans and reviews.
This founder is an outspoken opponent of "bureaucracy" and prefers to be able to change priorities on a daily basis. He or she tends to rely on their gut and prior experience, and is skeptical of written plans and processes.
Project reviews are "ad hoc," based on the latest crisis.
In our case, on a positive note, the founder did meet regularly with new potential customers. Unfortunately, each visit raised at least one new requirement for the product, which resulted in required feature additions, development reviews, and new priorities.
4. Weekly staff meetings become working crisis sessions.
Rather than getting status reports on plan progress and jointly developing near-term strategy, the founder is more interested in deep dives into perceived bottlenecks and rallying the troops to get back on schedule.
Top managers grow accustomed to getting their marching orders for the week.
5. Founder gets more defensive, talking more than listening.
A successful startup requires a strong leader who listens, questions, and learns from the team. It's hard to learn anything while talking and defending your position. A clear symptom of founder's syndrome is more excuses, more demands, and more direction without input.
At this point the organization becomes more and more dysfunctional, as team members lose their drive and motivation, frustrated by apparently not being heard or appreciated. The level of productivity goes down, people stop communicating, and more crises occur.
6. Leaders become more and more frustrated and paranoid.
Defensive talk and excuses start to become personal, questioning the motives of staff members, advisors, and investors.
Loyalty and commitment disintegrate, and key members of the team begin to desert the ship in mentally and physically. The startup is now doomed to failure.
In many cases, a founder with this syndrome is not evident in the beginning. Most founders start with a sincere intent to be a great leader and communicator, but the pressures of running an emerging business can bring out a whole new set of traits, despite his or her best efforts.
Therefore, if you are looking to join a startup, or invest in one, I recommend that you beyond a quick inspirational interview or two with the founder, before making a decision. Look at past history, and talk to peers and other advisors who may have seen this founder under stress.
If you are a founder, and find this article taped to your desk chair, it might be time to take a hard look at yourself in the mirror. Your team can't change you, but you can change yourself, and become the founder of the thriving startup you always dreamed about.