Most startups fail, and many fail for similar reasons. The money runs out. The company discovers there’s no market for its product. They’re outperformed by the competition. The business model doesn’t function. The team isn’t right. Often, at the root of all these faults is one fatal founder flaw: Ego.
In this age where tech entrepreneurs are celebrities, founders frequently get carried away chasing notoriety at the expense of concentrating on their core business. They’ll rabidly pursue press coverage, obsess over securing a spot on 30 Under 30, while away hours posting on Instagram or writing articles on LinkedIn, and spend vast amounts of time and money flying around the world, attending conferences, and delivering keynotes.
But if you don’t have product-market fit, what’s the point of all that? It’s creating buzz for a brand that doesn’t have a product. In their rush to be the next superstar entrepreneur, founders can easily get the sequencing wrong. There is a time and place for publicity-seeking. Marketing and PR are important, and having a charismatic CEO to draw attention to the company can be a wonderful thing. But your product needs to be on fire first.
This misalignment of priorities boils down to ego. Many founders see the business and its social media profile as an extension of themselves. They crave the public validation of saying, “I am the founder of a hot new start-up. I am building something amazing.” That’s getting it all backwards: First, you build something amazing — then you go tell the world.
While a startup is establishing a foothold, a founder needs to put their ego aside and focus on what really matters. They must set their sights on building an exceptional user experience, across both the product and the team, and making sure that they have clients who’ll essentially act as their salesforce, customers so happy with the product, they’ll go out and tell everybody else.
Young or inexperienced founders lose sight of their core goals as an entrepreneur: Build a great product, build a great team, sell your product and team, then repeat that process. Until you’ve got the fundamentals sorted out, forget about doing a TED talk. (In fact, I wouldn’t invest in any company with a founder who’s done a TED talk in the past five years.)
The same excess of ego that causes founders to think their rightful place is strutting a stage like a latter-day Steve Jobs also prevents start-up CEOs from hiring the best talent and heeding their advice. Even the messianic Jobs, a man with more ego than most, possessed sufficient smarts and humility to recognize the wisdom of surrounding yourself with brilliant people and getting out of their way. “It doesn’t make sense to hire smart people and tell them what to do,” Jobs said. “We hire smart people so they can tell us what to do.”
An ego-driven founder believes that they are the company, when in fact, every startup is a joint effort, and in most cases, under joint ownership. Thinking you’re the embodiment of the business will only lead to friction with your team and investors, plus a lack of focus on pleasing your real boss: the customer.
One of Mark Cuban’s maxims is, “Sales cure all.” That’s true, in the sense that at a start-up with a steady revenue stream and loyal customers acting as evangelists, bringing in more sales, the founder won’t be scrambling to make payroll each month and will be able to concentrate on the things that matter most. To reiterate, those things being product, people, and clients. Not likes, follows, and retweets.
Product, people, and clients … Not likes, follows, and retweets.
What’s challenging for ego-driven founders is that building a great product requires empathy — something most egotists lack. This popular image exists of the successful founder being a self-proclaimed creative genius, a socially awkward introvert who nonetheless craves cover-stories in Forbes and Wired, and dreams of building a multi-billion-dollar company. The truth is, the best founders are empaths. Not only do they have the analytical skiils to identify a major problem that other people have overlooked. They also have the ability to put themselves the shoes of the people experiencing the problem, building solutions as if they themselves were suffering from the problem they identified.
The vast majority of successful startups are driven by empathy, by purpose. Bill Gates and Microsoft are an excellent example. Gates genuinely wanted to build software that made millions of people’s lives better. Now he’s using the money he made to make yet more millions of people’s lives better, in a very genuine and, yes, empathetic way.
Beyond neglecting the fundamentals of their business, the glory-hound founder is very likely letting other important matters go by the wayside. There are numerous instances of this type of CEO allowing bookkeeping standards to slip, jeopardizing their startups’ ability to raise more capital and be acquired or eventually go public. Others have mishandled employee stock options, bungling the paperwork, and giving a raw deal to the early hires who worked hard to make the business a success.
Failures like these may not be anywhere near as grave as Elizabeth Holmes’ transgressions. But they do mean you’ll never be considered an entrepreneur superstar — no matter how big your Twitter following. Great founders don’t fixate on social media status or spend their precious time pondering how they’ll get on the cover of Forbes. They remain laser-focused on building an outstanding product that solves a real problem, delighting their customer. And maybe, just maybe, if they execute that task effectively, they get the Forbes cover anyway.
Velisarios Kattoulas is Chief Executive Officer at Lanturn.
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