The hidden belief that kills great startups

Founders, check yourselves for misanthropy

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One of the most widely repeated prescriptions for building a great company is “start with great people.”

A players hire A players, and B players higher C players, Steve Jobs famously observed (and many have echoed since); so fill your team with A players or face a “Bozo explosion.”

And yet: perhaps the single most common failure mode I observe in my most ambitious founder clients is that they are working with a team of largely B and C players.

Why the low bar?

You might think that founders who struggle to find and recruit great people lack the professional network, the charisma and social skills, or perhaps the self-confidence needed to convince exceptional people to join them. And indeed, those are some of the explanations I often get from the founders themselves. But I have found none of these factors to be either necessary or sufficient for explaining why some founders manage to surround themselves with excellent people and others do not.

The one common denominator I’ve observed among the founders who struggle with this is not self-doubt (though there’s plenty of that to go around), but other-doubt. Founders rarely come out and say it, but what emerges in the course of our coaching conversations is that they implicitly doubt the possibility of finding or inspiring greatness in other people. So they preemptively lower the bar, thus further reinforcing their pessimism.

They hire middling engineers instead of holding out for 10x'ers; they assume (and thus cater to) cynical motives on the part of investors; they sugarcoat their performance feedback, because “people have egos” and will “freak out” if not handled with care; they tolerate the creep of mediocrity within their company as a fact of life instead of aggressively resisting it; and so on.

A kernel of (mostly outdated) truth

This pessimism about people doesn't come from nowhere. Most of my clients who struggle with this got trained up on a lifetime of lonely exceptionalism, building their mental model out of whatever rationalizations kept them sane amid whatever unthinking human swarm they happened to get thrown into as kids.

That's why their explicit mental model is never as straightforward as "everyone sucks except me"—which would have been too taboo and anyway too horrifying for their 10-year-old self to contemplate (though likely at least half-true of the random little local tribe in which they found themselves!).

Instead it took more self-deprecating forms, like "People don't get me because I'm weird/obsessive/stuck-up". This allowed them to retain a semblance of agency—at the cost of 1) pathologizing their best qualities and 2) leaving the hidden "everyone sucks except me" belief unchecked.

Can’t tame it unless you name it

By now, of course, these founders have encountered other brilliant, contrarian, ambitious people like themselves. Some of them have even passed through elite startup incubators like YC or Entrepreneur First, where they directly interacted with some of the living “greats” of entrepreneurship. But this hasn't fundamentally shaken their hidden “everyone sucks except me” belief. Rather, such encounters got accommodated into their original defensive narrative with the addition of some corollaries, such as: “sure, they can afford to be weird and obsessive and choosy because they're billionaires/have charisma/know the right people," etc.

So if the hidden belief got amended at all, it wordlessly morphed into something like: “Everyone sucks except me and those too far out of my reach.”

All of this makes the hidden belief extra-sticky and evidence-resistant, even in otherwise intellectually rigorous founders: questioning it would mean 1) admitting they hold it and 2) facing the fear that it might be true (long enough to give enough amazing people a chance to impress them).

Self-doubt and other-doubt start to comingle

Part of the trouble with using self-deprecation as a defense mechanism is that it becomes self-fulfilling. As these founders surround themselves with relatively slow or mediocre performers, their own performance inevitably suffers. You can’t lower the bar on your team without also lowering the bar on yourself. As Andy Grove famously put it, a manager’s output is ultimately “the output of the organization under [their] supervision or influence”.

As a result, the founder feels too inadequate to approach the would-be mentors or colleagues she truly admires, fearing they will not want to work with her or even give her the time of day. Now, even if she manages to shed her misanthropy and become convinced of the existence and value of exceptional people, she still feels insecure about her ability to get great people to work for her. She is insecure about her own greatness, or the worthiness of her company, or both. So she aims low, thus further instantiating the scarcity of talent in her world.

Have the courage of your own greatness

So how do you dig yourself out of this inertial cascade? What does it take to raise the bar on the people in whom you're willing to invest your limited time, energy, and capital?

Obviously it takes a lot of time and effort (which is nothing new for you if you’re a founder). And it will likely take some competent social maneuvering as you first start to level up your network (luckily there are clever hacks you can use to solve this particular brand of “cold start problem”). But what you’ll need above all is the courage of your own greatness¹—even if it exists in your mind only as an awareness of unrealized potential. You need to remember how high you can and want to aim, and you need to be willing to take the existential and emotional risks that real excellence entails.

You’ll need to muster that courage to outreach and boldly recruit the excellent people who some part of you feels are “out of your league”. Perhaps you can take some inspiration from living legends like Vinod Khosla, founder of Sun Microsystems, who went to insane lengths to recruit his first 2 superstar hires at a point when he had just immigrated from India and “lacked the ‘old boys network’” other founders might have leaned on. To the point about how early hiring decisions can compound, for better or worse: those first 2 hires then helped him attract a dream team that included Eric Schmidt (future Google CEO), Carol Bartz (future Autodesk and Yahoo CEO), Bill Coleman (future BEA Systems founder and Veritas CEO), and others of similar caliber; “out of the first 25 employees we hired, probably ten billion-dollar companies were later created.”

Just as importantly, you’ll need to muster courage for the painful decisions and conversations with those who no longer make the cut. These latter conversations may be all the more painful for the fact that they didn’t happen sooner. In some cases you may need to own the fact that you’ve undercut your respect for a person, possibly beyond repair, through your ongoing reluctance to give them honest feedback. There is great courage in such an admission—courage borne of the conviction that you and they can both do better, and that this will not happen by default.

Happily, I've now seen multiple founders take this leap, and I've seen the compounding rewards for all concerned. Yes, even for those who got fired and had to level themselves up for their next job. Turns out greatness too can be self-reinforcing, no less than mediocrity.

If you’re a venture-scale founder who resonates with the failure mode I’ve described here and wants to level up, book a coaching session now. Everyone else: feel free to leave a comment below, or become a paid subscriber so you can join my next Zoom AMA, or subscribe for free and stay tuned for more content like this:

1. What, Gena? You mean this isn't synonymous with narcissism? Correct; in fact, being defensively self-deprecating in order to spare people’s supposedly fragile egos (but really to spare yourself the risk that they either disappoint or reject you) is the more narcissistic tendency.