Founder's Disease: Diagnosis and Treatment

Recently, a reporter was asking me about founders and failure. Is there anything I’ve noticed about how they handle it well or badly? Are there general trends that unite how founders psychologically treat failures?

My immediate reply was “Founder’s Disease”. Its a term I made up once in a conversation to describe the way that founders have trouble admitting bad news and it is best crystallized in the following example:

A founder I knew well and I were out to drinks with one of his best friends. Because I had a minor stake in the company, I happened to know that it was doing badly and was a month or so away from running out of money. Nevertheless, the founder has a smile on his face and when his best friend asked how the company was doing, he said “Everything’s great!”

Everything was not great. In startups, everything is often not great. And yet almost every founder you meet will tell you about the positive events: traction, press, funding, whatever is most likely to put a positive spin on their company. And that, right there, is Founder’s Disease.

It is totally understandable. Most founders are all-in on a startup and have both their own money (and often friend and family money) and their own reputation tied up completely in its success or failure.  Which makes saying “things are bad” take on the larger meaning of “I am in danger of losing my literal and figurative self-worth”.

And presentation of your startup as successful is also a key component of the business of startups.  Look at Mint, which turned its constant “look at all our users” message into a decent acquisition (5X), conveniently ignoring that only a tiny fraction ever came back again.  Both investment and acquisition depend on defining your metric for success and selling it, hard.

So then why is it a Disease?  Because it leads you to tell your best friend in a bar that everything is wonderful, when your world is crumbling around your ears.  Not only is this incredibly emotionally depleting, because now you’ve literally lied to all the people that would provide commiseration and emotional support, but it doesn’t make good business sense either.

If I’m your friend, and you say “X is not going well”, of course I’m going to think about whether there is anything I can do to help.  And maybe it is just some advice, but maybe it is introducing you to a reporter I know to get you some press traction or an investor who I think can help you with funding.  In trying to self-present as strong, we weaken our position.