Your Startup Will Suck If Your Founder?Does

I had a very funny intro written for this. My usual sarcasm thinly veiling how I didn’t want to name the names because they love a legal threat, complete with quotes from David Kleinfeld. But since I originally wrote it, News.com.au published an exposé so the cat is very much out of the bag. Plus this article isn’t really about that anyway, we can save that for the podcast, book deal, and three-part Netflix documentary. I’m sure further press will delve into it deeper than I can, anyway. In fact I only mention it because I'm sure people will try to make that connection if I don't. This is more about what could happen when you work for non-technical founders at a tech startup, pulled from some of my experiences and conversations I’ve had with other people. So with that disclaimer aside, this isn’t a historic account or exposé and shouldn’t be taken as one, it’s just advice for other people considering joining a startup. Things to look out for and things to plan for in line with various other articles I've written this year.

Negatives into positives in the form of cautionary advice based on experience from people that have battled through it on both sides of the fence. I guess perhaps it’s a bit of a silver lining thing, because sometimes there’s no pot of gold at the end of the rainbow, only angry leprechauns.

Everyone Start(Up)s With Good Intentions

Startups are sexy, but as the title of my upcoming book (maybe) states “Any Idiot Can Have A Startup.” And if you’re thinking about joining one there are things you need to consider that are rarely talked about and rarely planned for. And while we all begin the startup journey with hopes and dreams, hills to climb and mountains to conquer, things rarely go as planned. Without proper leadership that road can be really bumpy and ultimately drive off a cliff in a new Aston Martin.

One piece of advice I received a long time ago that always stuck with me; pick bosses not jobs. We overlook this when being wowed by the next unicorn when actually, “pick founders not startups” is even more important. VCs know this, and employees should too. This was the mistake I made. I failed to factor it in because of the “startup culture” and many others do for the same reason; the inherent well sold dream of “you’re joining the founding team,” “there are no bosses, we’re all equal,” etc etc etc. All that good startup jargon that convinces people to take a gamble on a new endeavour, complete with a pay cut to make it feel real because it’s exciting and will pay off “when, when, when, when.”

But what about when things go wrong? No matter their pitch there is always a boss. And if they’re inexperienced and non-technical founders in a tech company, there is a potential nightmare ahead.

Why Good Intentions ≠ Profit

Ah, the million-dollar question?—?or rather, the question that could save you from losing ten million dollars. Let’s cut to the chase: most startups don’t fail because the idea was bad; they fail because they run out of money and leadership can’t pivot. 29% of startups fold because they simply run out of cash. It’s not just about having a great idea it’s about having the financial runway to make it take off, or the ability to bootstrap and hustle until it does. Is your founder the right founder to weather the storm and steer the ship away from the cliffs? Or are they the iceberg?

Above all responsible leadership is the most important. The foresight to not spend the raised funds on non-success focused expenditures, or vanity items before profits justify the splurge. No, your startup can not fake it until it makes it. No, paying for extravagant lifestyle items, travel, and accommodation is not a “business expense” if you’re not actually doing any “business” while there. No, you do not “deserve it.”

Poor leadership can be as toxic as an empty bank account and one often leads to the other. This is where some non-technical founders become the nail in the coffin of their own dream. They underestimate costs and overestimate speed, or want to be seen as having “made it” without hitting tangible goals because they don’t have product based KPIs. Their success is only measured by the perceived success of the business and if they don’t understand the milestones and can’t really contribute other than providing funding they’re left only focused on the outward appearance instead of the inner workings. This leads to wanting to appear successful at all costs and that cost is the cost. Business class flights and a million dollar entertainment budget pre-revenue is not responsible leadership. Don’t drink your own kool-aid.

Worse still, if they’ve been at it for several years they begin feeling that they’re owed something that the business is yet to earn, because that’s the only way they understand how to measure success or their worth. They’re not satisfied with little wins because they don’t understand them or can’t show them off and they’re not patient enough to wait for a legitimate exit, so they cheat and spend and then lie.

Your Exit Strategy

Startups are all about the exit strategy, it’s what every investor wants and it’s what every founder dreams of. It’s essentially the goal you all work towards. The “when we’ve made it” KPI that will unlock sunshine, rainbows, pay raises, and recognition. But statistically we know that more often than not startups fail, so what is your exit strategy then? But what if you dare decide to leave earlier in the journey?

The problem with non-technically minded founders is that they don’t know what they don’t know. And this is dangerous because if you leave before they exit and they haven’t taken the time to learn your role and what you actually do (or just can’t) it makes a comprehensive handover impossible and leads to misplaced anger that you’ve betrayed them by doing what’s best for you. How dare you leave after they’ve been so good to you by underpaying you for the ridiculous hours you’ve worked! You monster!

Even worse if you have to leave during difficult times (like when they stop paying you while you’re on paternity leave, cough) they might not be able to afford to hire a replacement so a conventional handover just can’t happen. And that’s when the blame game begins; if they don’t know what they don’t know everytime they discover a new problem, it’s never them, it’s because you’ve dared to leave.

So you need to make sure that you document as much as possible to prevent any misunderstandings, but even then if they’re not technical they still won’t know what they don’t know even if it’s in their hands or etched into stone tablets.

They Don’t Know What They Don’t Know

This problem will haunt you every single day of your life. Contrary to a popular saying, there are stupid questions, and you’ll quickly have to answer them all. In a normal business this is offset by experience and process, but your startup will be bootstrapped, you’ll be wearing 17 hats at once, and you really won’t have the time to explain everything. You’ll document it, you’ll try to explain things in WIPs and meetings (there will be a lot of those), there will be nods and a lot of things will sink in, but a lot won’t.

This will lead to conflict in direction, conflict in management, and conflict in general. While you may have been told you’re a founding team member and you’re shaping the direction of what you’re building for them, ultimately you’re not. This startup isn’t your dream, you’re just told that to get you to work harder and longer, for less. But it’s not your ship and it’s not your money. If your startup can scale quickly to profit and implement a skilled board this will iron itself out, but if it can’t frustrations will rise on both sides of the table because you’re working harder and longer for less while being blamed for everything because the founders don’t know any better, can’t pivot, and their egos won’t let them admit that perhaps they are the problem.

If You’re Good, You’re Impossible to Replace

If you do your job well, you’ll become impossible to replace. You’ll have grown with the business, know its ins and outs and be a part of the product itself. This is why founding and core staff are usually asked to stay through large founding rounds or founder exits and are lumped into the deal like pieces of furniture and hardware in a cluttered office. At least this usually comes with a great pay package.

But if you want to leave before then you’ll feel guilty. You’ll be guilt tripped. You might even be treated like a traitor for daring to want something different than their vision. They’ll bargain, offer you that pay raise they said they couldn’t afford, or ask you to work both jobs if you have to. Anything to keep the dream alive. And you’ll listen because you’re invested in the product you’ve built and the amazing team you’ve scaled. You’ve put in all these hours, you owe it one last go, one last time… again.

Only One Of You Can Grow?—?It Won’t Be You

You’ve been brought in to achieve an outcome. But unlike a company with hierarchy and seasoned leadership, you’ll be pouring your knowledge into the startup and receiving little in return. It’s a one way street and if it succeeds happy days, but if it doesn’t you won’t have been taught anything new. That’s the trade-off.

An experienced founder will be able to help guide you, and in that case grab all the knowledge you can for when it’s your turn to start something. But an in-experienced founder, especially a non-technical one who has brought you in to achieve their dream will have little to offer you other than perhaps examples of what not to do.

If the startup is successful it will grow and yes your responsibilities will too, but you won’t be able to grow until it does and if that takes too long or doesn’t happen at all it’s time to consider that exit strategy. Because there is always an exit, one way or the other, it just depends who has benefited and it won’t always be you. It most likely won’t be you.

On The Other Hand

On the other hand, you could have a non-technical founder that understands their limitations, and wants to bring in the best talent to realize their dream and actually listens to them. A founder who is empathetic to the team they’ve built and doesn’t just treat everyone like replaceable cast members in their own movie. A founder that is appreciative and gives you opportunity to grow in and outside of the business, realizing your strengths are the company’s strengths. A founder that values and respects the 38 hats you wear and 80 hour work weeks.

But.

Remember, you’re not IP. You’re not a piece of furniture. A startup is only as good as its team. You are the startup. And so if they’re not that type of founder, like any good startup, you need to plan your exit strategy, and know when and how to pivot.

And remember, pick founders not startups.

As always if you want to chat, or you want to option that script, message me here.