Why the top 1% of founders quit their startup

Why the top 1% of founders quit their startup

“If you can just avoid dying, you get rich. That sounds like a joke, but it’s actually a pretty good description of what happens in a typical startup.”

According to Daniel Kang, Founder at YC and ex-investor at Softbank, the breakdown and demoralization of founders is the leading cause of death for most early-stage, pre-product-market fit companies. It’s referred to as “The Struggle,” and there are endless reasons why founders face The Struggle:

1. Limited control, 100% responsible — Founders want control. But in a startup, most things will not go your way. Even people who’ve seen it all will be happy to be right, even 50% of the time.

2. Results are everything — If you don’t get it right, you’ll desperately call up banks only to be stood up, fire team members you truly care about, and have to shut down your company.

3. Counterfactual & financial reality — “Comparison is a thief of joy” is a commonly accepted proverb. But it’s pretty damn hard not to compare when the realities of personal finance punches you in the face every day, and you see your former & current peers crushing it.

Is it ever acceptable to quit?

The strategy to quit is hardly ever talked about, and it's tough for founders to make these decisions. As Kang writes, YC offers a formalized set of questions founders should ask themselves to get to that decision:

• Do you have any ideas left to grow your startup?

• Can you drive that growth profitably?

• Do you want to work on the startup that results from that growth?

• Do you want to work with your co-founders on the startup that results from that growth?

Your answers to these questions could be the answer.

👉️ Learn more about the framework of quitting — Why The Top 1% of Founders Quit Their Startups

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Crack the trust code — or sabotage your growth

“Knowing how to build and maintain trust has been the best career catalyst for me.”

Daniel Rizea, Director of Engineering at Google, believes that in the age of AI, expertise will become a commodity because you can ask ‘AI bot X’ any question and get an expert answer.

Knowing how to become trustworthy will be the biggest competitive advantage. Building trust starts with the Say/Do/Show formula: Say what you will do, do it, and show that you have done it.

Here are some common pitfalls to avoid:

• Forgetting to say you will do it — If you forget to say you will do something and you come up with the results, most people will think you were lucky to pull it off. Saying you will do something puts you in the spotlight. But with every risk, there is also a reward.

• Not doing it — If you don’t do something you said you would do, you will lose trust points rather than gain them, and it usually ends with exclusion from the tribe.

• Not showing you have done it — If you forget to show that you have done it, your effort may pass unnoticed, and you will not be gaining trust. Be careful, though; you don’t have to brag about the work that you have done and blow it out of proportion. A simple follow-up email that the task is done or a completion status in your daily/weekly meeting is enough.

👉️ Learn more about cracking the trust code here.

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Team EH