Funded Startups: Founders What Went Wrong?

Startup idea is not a lottery ticket

Founders armed with dreams convinces himself and investors to believe almost anything with a mix of charm, charisma, bravado, hyperbole,marketing, appeasement and persistence. Founders after getting funded the experience of failure is unsettling but for investors it's not new. Here are 10 types of founders traits to find out reasons on what went wrong even after getting funded.

1. Boy in Costume: Founders with elite college degree aiming to be a corporate strategist with his freshly printed business cards with the tag “CEO”. A founder who applies the corporate world complexity to startups and tries to fake it till they make it by aping successful enterprise polices to startup. They scale prematurely, burning through their capital before they have achieved product-market fit. In demanding times they throw in the towel without putting up much of a fight, because they lack resilience, the drive and determination. In startup race its marathon & not sprint because luck plays out with founders who stay put long in the game.
2. Paranoid Founders: These suspicious secretive geniuses want to develop business at scale without talking to anyone. To execute plan one need's to share, communicate and engage. Insecurity is part of their life, be it their team mates, customers or investors. It's all locked in the founders head. These founders cannot strike partnership with anyone because their fear has climbed delusional proportions. They limit their chance for success.
3. Investor Relationship: Once funded founders look to ignore investors and move 100% focus on business. Startup does lot's PR in media for it's achievements to attract talent or customers. They tend go into complete silence with no communication with investors. It lays the groundwork for future problems especially in tough times. Investor sit on top of market, have network of connections & can help with insights but will move to other side of the table due to lack of communication
4. Flawed ego: On getting funded founders get tremendous boost to their confidence. It's good but when they start thinking that they are smartest people on earth, the problems start. They talk but don't listen. It's root cause of startup failure. Pride is important for founders but there is fine line to making a point & being arrogant by not listening to others. They battle ceaselessly with investors to showcase subject dominance. I know what I am doing so no one dare question me & my business plans attitude does not help. 
5. Superman Founders: They think themselves as superhuman with infinite strength and capabilities to solve everything and anything. They do not delegate or trust with their team. They overwork and burn themselves. Founders ought to be part of intense action and leading from front but it cannot be 24/7 for 365 days which leads to zero critical thinking. When founders take it all on their own shoulders then productivity, creativity & innovation deteriorates while operational chaos rein. 
6. Over-hyped founders: Media has made startup founders part of gossip pages. Founders love to see themselves in media glamour. They believe in self-aggrandizing promotions. These founders hide their shallow technology, business or numbers behind cloaks of unquestioning marquee investor names. They share testimonials but no real numbers. They create soft stories in media without any substance & stay away from disclosing hard facts. Obfuscation is common. They sabotage their own startup by building high expectations with unnecessary over exposure in media.
7. Criticism management: Startups will face criticism especially from investors. Founders should not consider it as dissent or disloyalty to the company. There will be hype around rapidly growing startups, hence eyebrows will be raised & questions will be asked. Founders should not threaten critics or disparage dissent. It doesn’t matter how hateful the criticism of your critics may be, there might be some truth in it so it is very important to observe their criticism properly.
8. Money matters: Founders need to respect money. It's time bomb ticking when founders raise too little money so as not to have enough runway to be able to launch product or go to market. It's a race to failure when you raise too much money and get overvalued. Investors expectations are difficult to achieve, pivot of idea is harder, spending is liberal, teams are bloated and even with too much money raised it last not more than 24 months. These founders have very little understanding of finance. They burn money irrationally in name of growth & scale and find themselves in a spot with down rounds.
9. Gold digger: These founders dream of becoming rich by following trends, attract investors and build companies like playing poker game with investors money. These gold diggers believe money is solution to everything. They are self centered founders with very little skin in the game taking advantage of investor herd mentality of funding trends. They constantly focus on creating income for themselves and if things go well create wealth on exit equally. While gold digging isn’t an honorable method of entrepreneurship, it has continued to work time and time again for selfish founders, while the company fails and as a result has created an immense paranoia amongst investors.
10. Perfectionist founders: These founders struggle with issues of hiring team, product release, and invariably delays & costs business at every juncture. They are obsessed with perfection which does not work in startup which needs continuous iteration. These founders procrastinate in name of perfection with out realizing that nothing is perfect & finished till it's released.

While investors & media tend credit startup funding rounds to success due to founders vision, brilliance and skill it might be actually the case of luck & timing and in real founders do not deserve the success they have achieved. Many such founders these dreams then turn into nightmares. Every founder will be able to relate to one or many of the above traits & can understand that these pitfalls could have been avoided. 

Founders do not end up fooling yourself, you will fall into one of these traits at one point or another. Make every episode part of your learning experience and get back to business as fast as you notice these traits in your journey. 

Startups are not for the faint of heart

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