Protecting your start-up from the “founder’s trap”

What is the “founder’s trap”?

Many times a business can be as much about the person behind the product as the product itself. A passionate and innovative leader is often essential to getting a new business off the ground. But once established, a business can require a totally different skillset in order to keep itself going.

As opposed to a new business, an established business often requires its leader to provide more focus on customer loyalty, stability, quality and fine tuning in order to maintain the attention initially generated. There is now a change in context which requires a different response. Despite this, business owners are often reluctant to give way to new leadership or new ideas once the start-up becomes established and enters a second phase that can expose errors in the finer details of the business and its products.

You can see this type of denial from business owners, for example, from restaurant managers in Gordon Ramsay’s infamous Kitchen Nightmares. The logic behind those who unknowingly or otherwise find themselves in the founder’s trap is “I founded this business in the first place, with my own ideas, so I am the only person who best knows how to keep this business going”:

 

The interesting thing about the founder’s trap is that it highlights the difference between innovation and flexibility. An innovative founder may not turn out to be a flexible leader as the business develops and enters its second cycle.

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How we prepared for the founder’s trap

At Arab Millennial, we have intentionally developed the organisation such that there are two co-founders and a semi-autonomous senior advisor. This means that, should the organisation face any obstacles in the future, there should be enough diversity in thought to allow for creative solutions to new challenges to emerge.

Furthermore, all staff operate in a generally horizontal way in order to eliminate individual work politics that can create stagnation in the organisation:

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The risks of a more horizontal structure

We are aware that, if not handled appropriately, a horizontal work structure can be counterintuitive and create stagnation. This is because staff can disagree with each other and unintentionally or otherwise block decisive attempts to provide creative solutions to new challenges. We have created two workarounds for this:

  1. Democratic voting among staff on fundamental issues,
  2. Co-founders acting as “first among equals” in the event that indecisiveness occurs

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A summary of tips for your start-up

So, what does this mean for your start-up? In the initial phases of your business, keep your team small, and try to team up with somebody with a different skillset; that will create the diversity in thought necessary to overcome evolving challenges.

I say keep your team small because democratic voting on key issues is not effective with a huge amount of staff, as stagnation occurs (for those unfamiliar, this is technically known as “diminishing returns”). Therefore, if your business enters a “third cycle”, expansion, then a vertical structure may be necessary – albeit at the expense of hierarchal politics – but preserving your initial co-founder set-up should avoid you from entering the founder’s trap. It’s all about balance and planning for the future.

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