How to Avoid Startup Suicide: Toxic Founder Relationships
Startups are more likely to die from suicide than homicide.
The above quote is so powerful and so true — most companies die from self-inflicted wounds than from an external force (competition, economic downturn, etc.).
To expand upon this further, I believe there are two main types of startup suicide are: toxic founder relationships and indecision.
A toxic founder relationship leads to infighting within the leadership team, which will permeate throughout the company and have an adverse effect on the company culture. Infighting inevitably leads to power struggle, gossip, and broken processes. Before you know it, the company is bleeding talent and unable to recruit new talent because word spreads quickly that your company culture is toxic. This leads to failure because a company is nothing without great people.
The best decision is the right decision, the second-best decision is the wrong decision, and the worst decision is indecision.
Indecision leads to decision-making by consensus (only making decisions when everyone agrees) and as a result, slow decision-making. This ethos is magnified at a startup because speed is a true competitive advantage that is vital for success. Indecision not only leads to slow decision-making, but also leads to fear of failure. Indecision leads it playing safe because the conservative route is the only one that everyone will agree to. Indecision among the leadership team permeates throughout the company and before you know it, you’ve created a culture that fears failure, struggles to make decisions with conviction, and plays it safe every time. This leads to failure because a company that doesn’t move with conviction and speed will bleed talent and lose out to the competition.
In identifying the two types of startup suicide, my goal is to cultivate a great relationship among the founding team and create a decision-making framework that allows us to make decisions with conviction and speed.
For this post, I’d like to focus on founder relationships. When it comes to cultivating a great relationship among the founding team, the key is to keep it simple. But simple doesn’t mean easy.
Last year, I made the decision to start Panacea with my brother and a close friend. Now, there’s a lot of reasons why NOT to start a company with a sibling or a friend. And rightfully so — I understand the potential perils that come with working with loved ones. Despite this advice, I pushed forward. And it’s the best decision that I’ve made so far for Panacea.
After 12 months together, we’re far from perfect but here’s how we make it work:
Keep it simple.
Relationships are founded upon and thrive off effective communication, unwavering trust, and mutual respect.
Ever notice how problems in any relationship become so complex and convoluted that you can’t even put into words what the issues are? When this happens (because it will), I encourage you to sit down with your co-founders and talk things out.
Bring it back to the fundamentals: communication, trust, and respect.
If one of those three tenets has been violated, there needs to be acknowledgement and ownership (apology); willingness to get better (eliciting feedback); and commitment to getting better (acting on the feedback).
We’ve found that keeping things simple and focusing on communication, trust, and respect is the key to any successful relationship.
Invest in the relationship.
Relationships are simple. But simple doesn’t mean easy. Relationships require an investment from both parties. You need to be ALL in.
The three of us work diligently to cultivate and strengthen our relationship. We provide each other feedback, (and more importantly) act on the feedback, work with a leadership coach, and conduct regular 360 sessions. We’re committed to the PROCESS. And everything — good, bad, easy, hard — that comes with this journey.
As a side note, I can’t speak enough about the importance of working with a leadership coach. In any other field of expertise (sports, music, entertainment, etc.), coaches are commonplace. Unfortunately, leadership coaching for executives and founders is frowned upon as unnecessary.
Ever heard someone say I’m a natural born leader? Bullshit.
Leadership is a muscle and it needs to be trained and strengthened. What better way than to work with a coach who specializes in leadership and management. Even for cash-strapped startups, I would highly recommend reallocating some budget toward leadership coaching. It needs to be within reason, but it’s possibly the best investment you can make.
Relationships are war — not against the other person, but against our selfish nature (h/t Carl Lentz). By focusing on the bigger picture (building a brand that we’re proud of and that endures), it becomes less about “me” and more about “we.”
In the words of Pat Riley, we keep the main thing, the main thing. And stay out of the way as much as possible.
The moment one of our egos comes into view, the other two bring attention to this and shift the focus back on what’s best for Panacea.
People often ask me what leads to a successful founding team, and I believe it comes down to accountability.
Are you able to hold the other person accountable?
And are you willing to stay humble, check your ego at the door, and be held accountable?
If you can answer yes to both questions, then you’ve found a great partner.