When founders outgrow their startups
When founders outgrow their startups
On the rise of personal power and the new founders' dilemma.
What happens when a founder becomes bigger than their startup?
Why do some founders seem to quit when it seems like they’re winning?
There’s more than one reason, but one in particular is a sign of our times.
My theory: more and more founders are outgrowing their startups as a result of their personal brand — their personal power — eclipsing their company’s success.1 And there’s a perfect storm of reasons that it’s happening now.
ENDING SOMETHING
In the world of craft and creation, whether it’s startups, art, or something else, most commitments are open-ended. Generally, when you start something, there’s this unspoken rule: you don’t stop unless something drastic happens. Maybe the project fails outright, you run out of money, or the market tells you once and for all that it just doesn’t care about what you’re creating.
Of course, a less drastic thing can also happen, which is this: the people working on the thing no longer feel like working on the thing. It’s less about failure and more about the people involved. And there are a lot of reasons: maybe the role they’re in now isn’t the one they signed up for (or best suited for), or maybe they’ve been at it for years and are just ready for a new challenge. They’ve built the business, taken it to new heights, and now they’re thinking about passing the torch.
But of course, the reason has to be something palatable to stakeholders—it has to sound like the best decision for the company, and the founder isn’t just quitting.
Yet, people do quit. They reach a point where they have an epiphany: they just don’t want to keep going. Maybe they realize the reason they started the venture wasn’t as solid as they thought. Maybe they’re tired, or bored, or simply more excited by something else. Historically, these haven’t been the most “acceptable” reasons to step away, especially when you’ve got other people on board that you’ve made a serious commitment to—investors, employees, customers.
This happens more often than we like to admit. And it’s not just founders. It’s also operators. It’s investors too (similar to founders, maybe they just started a venture capital fund). Anyone who’s created something they’re deeply tied to can be faced with this.
I’ve seen this pattern recently with a few notable people in and around the startup world. I’ll spare the names because the point isn’t to single them out, but you could probably think of a few examples. I’m just fascinated by how ending something is decided, messaged, and perceived — and how it’s changing in the modern socio-professional landscape.
THE PERFECT STORM
Here’s the pattern I see: when a founder’s personal power starts to exceed the power of their company, something shifts. They get anxious, frustrated, dissatisfied, bored.
What do I mean by “personal power”? It’s the founder’s ability and trajectory, separate from the company. A founder’s personal power is their ability to attract attention, opportunities, and even investment independent of their company.
It’s their potential to build and influence too, which sometimes outpaces what the company can accommodate. If you took the company away, the person would still be highly sought after. The founder’s valuation is just as high as, if not higher than, their company’s. So when there’s too much of a gap between the founder’s personal power and the company’s power, that dissatisfaction grows—and it grows fast.
This, I think, is one big reason why we see founders making what seem like early or unexpected exits from companies that, while not booming, are still doing okay. The companies aren’t failures. They’re just not keeping up with the founder.
What’s driving this trend? The rise of personal branding, importance of social media, and the normalization of the polymath founder (not just building their company but also taking on other projects on the side like toy projects, angel investing, writing newsletters, hosting podcasts, building up their social media profile). Adding to this is the sheer volume of people and companies in the arena, competition is stiff.
All of this adds up, making founders juggle more roles than ever — builders, creators, thought leaders — which can pull their focus away from their venture. It’s fair to say that the founder’s brand also helps the company, but it’s not always 1:1 — the end customers or buyers don’t stick around long-term because of it.
Someone recently joked that every new Y Combinator batch comes with a new crop of content creators on Twitter and LinkedIn. One tweet pointed out the “life hack” of raising venture capital to spend that money on growing your personal brand. It sounds cynical, but it’s not far off the mark. Founders may be interested in building something real, but there are a lot of secondary gains on the table too.
LOYALTY, TRANSPARENCY, AND EXPECTATION
One “so what" of the theory: When a founder’s personal power eclipses their company’s power, there’s a higher chance they’ll exit — sooner than stakeholders or observers expect.