Weekly Briefing Note for Founders 15/8/24

14th August 2024
CATEGORY:

Battling Imposter Syndrome

The archetypal founder is often cast as a modern-day superhero. A visionary that sees a different future to everyone else. A builder that assembles a stellar team, raises capital from prestige investors, delivers a category-defining product, and scales the business to great heights.

If only it were that simple. But of course, it's not.

Startups are constantly battling a multitude of forces that seek to derail the mission. Listen to any founder's journey and you will also hear about a voyage of great uncertainty, near misses, and pivots.

Every founder accumulates a vast collection of war stories along the way. But one of the greatest battles of all is rarely discussed, even though it is omnipresent: self-doubt.

Self-doubt springs from a condition colloquially known as 'imposter syndrome'. This is where someone believes they are undeserving of their achievements and the high esteem in which they are, in fact, held. They feel that they aren’t as competent or intelligent as others might think - and that soon enough, people will discover the truth and abandon them.

Imposter syndrome is a common affliction amongst all high achievers. It is especially prevalent in founders, in particular first-time founders. In some cases, it can have a debilitating effect on the founder's ability to perform. It’s also correlated with measures of anxiety and depression.

Imposter syndrome usually rears its head during moments of great uncertainty, such as fundraising. It is an unpredictable phenomenon, just as likely to strike after a major achievement as it is in the build-up to a major challenge.

For a founder, this could occur when bringing on board a new investor, signing a big customer contract, or hiring a new senior exec. Huge expectations have been set, but can I now deliver?

Today we take a close look at imposter syndrome and examine:
Why it affects founders more than others.
How founders can spot it.
How they can deal with it.



What makes founders prone to imposter syndrome?

Former founder and investor Michael Wolfe says there are multiple reasons why founders are especially susceptible to imposter syndrome. He compares the role of the startup founder to a 'normal' job across 5 core areas:

  1. Job description
    Normal job: Designed for you to succeed.
    Startup founder: Might be impossible.

  2. The business
    Normal job: Already have product, customers, and team.
    Startup founder: You start with nothing, and you might stay there.

  3. Visibility
    Normal job: Few people know or care if you succeed.
    Startup founder: Teams, investors, friends and randos are watching.

  4. Cost of failure
    Normal job: No raise or promotion. The company is just fine.
    Startup founder: An entire corporation goes out of business.

  5. The Boss
    Normal job: Your boss can coach, give feedback, and help.
    Startup founder: You are the boss. It's all on you.


Wolfe comments that at a big company job, the cost of poor performance is contained. No, you don’t want to lose a deal or slip a deadline, but unless you are in a very senior role, your failure won’t put the company out of business. It might barely register. Maybe you don’t get the raise or the promotion, but you are unlikely to crash the stock price. The worst case is that you get fired, in which case you get another job and try to do better next time.

At a startup, the upside is much higher, and the downside seems much lower. If you succeed, you achieve fame and fortune, and you bring your team along for the ride. If you fail, an entire corporation goes out of business and ceases to exist, leaving a million-dollar crater.



How founders can spot it

In last week's piece, The Five Temptations of a CEO, we highlighted a set of 5 unconscious behavioural traits that can undermine the route to startup success.

3 of these 'temptations' can be directly linked to (and negatively impacted by) imposter syndrome:

1. Choosing Popularity over Accountability

CEOs may avoid difficult decisions and tough conversations to maintain popularity amongst their team. One common line of least resistance is promoting the early hires into leadership roles rather than hiring top talent externally.

If imposter syndrome is impacting your confidence this will make the recruitment of senior leaders all the harder. You must bring in some heavy hitters with greater experience than you have. But aren't they going to quickly sense your own lack of experience? What gives you the right to boss people around when you haven't done the job they're doing? Aren't they going to call you out?

This not only applies to convincing new employees but new investors and customers. Every time you pitch your vision you are making a promise of an exciting future. That's what everyone is buying into. But you also know that most startups fail, so what makes you think are you going to beat the odds and deliver success for these stakeholders?

2. Choosing Certainty over Clarity

Leaders often delay making decisions until they have complete information, which can lead to missed opportunities and indecisiveness. In the startup this can be deadly as complete information almost never exists.

Imposter syndrome keeps you in your comfort zone. A founder suffering from imposter syndrome is more likely to want to work in the areas of the business where they feel most at home instead of where they are needed.

In other words, imposter syndrome stops you operating in areas where your shortcomings may be exposed but where the additional information gleaned could be vital to better decision-making. The impact is often not felt at first, but it slowly and surely creeps up on the entire organisation as the 'leadership vacuum' becomes apparent.

3. Choosing Harmony over Conflict

Avoiding conflict to preserve harmony within the team can hinder innovation and problem-solving. CEOs that encourage open dialogue and diverse perspectives drive better decision-making and continuous improvement.

But by inviting debate, you are potentially opening a can of worms. If you haven't managed a team of senior leaders before, how do you reconcile many opposing and passionately held views without putting noses out of joint?

Imposter syndrome steers founders away from open debate and towards top-down decision-making. They are then more likely to get defensive or angry when challenged. This is one sure way to create a toxic corporate culture. As Michael Wolfe says, toxic conflict seldom happens between people who are confident in their abilities and open to debate and feedback. It happens between people who are insecure and brittle.


Fundraising

A special word about fundraising as this often sparks a peak in imposter syndrome. It is also the core topic that we have spent 15 years working on with founders. Here it's helpful to consider the words of executive coach Miriam Meima. She frames imposter syndrome as the gap between our perceived capacity and perceived expectations.

When a first-time founder presents to an investor, the founder's perceived capacity to deliver a compelling proposition is naturally low. They may have never done this before. But they also know that the investor's perceived expectations are very high. Investors are very unlikely to give a founder any leeway because this is their first time. In fact, the founder fears that even divulging this lack of experience would count against them.

As it's almost impossible to reduce the gap by lowering perceived expectations, the only strategy is to improve capacity. In our view this means approaching the entire process with organised intent and under the guidance of someone who has done this many times before. Even though you may be a first-time founder you want to create the funding strategy, develop the investment proposition, craft the pitch, and execute the campaign, with the confidence of a second timer.



Dealing with imposter syndrome

It's clear that imposter syndrome can stifle the potential for both personal growth as well as startup success. Confronting it is essential and is often a strong trait of experienced founders.

Experiencing imposter syndrome is almost inevitable for a first-time founder. You have never done anything like this before. But everyone around you expects you to come up with the answers. Surely you are going to get found out at some point. But this is completely the wrong framing.

Overcoming imposter syndrome involves changing a person's mindset about their own abilities.

  • The starting point is to accept that imposter syndrome is normal. Around 25 to 30 percent of high achievers suffer from imposter syndrome. And around 70 percent of adults may experience it at least once in their lifetime, research suggests.

  • The next step is to remind them that they have earned the right to lead, even if they haven't done so before. They are the head of a 'movement', where the moral authority to make the big calls is vested in them as the visionary. They will be forgiven their imperfections as all great leaders are.

  • Founders should stay focused on measuring their own achievements, instead of comparing themselves to others. The startup success stories they read about in the media often sound like straight-line successes. But they were likely nothing of the sort. Don't compare an unrealistically positive version of someone else to the worst version of yourself.

  • In certain situations, turning to a coach or mentor who understands those feelings of insecurity can be advantageous. Research suggests that reaching out to people outside of your immediate circle may be a better tool to combat impostorism. Those individuals can put the person's concerns into context, recalibrate their perspective, and offer support.



In summary

Imposter syndrome is a common affliction amongst all high achievers. It is especially prevalent in founders, in particular first-time founders.

It can stifle the potential for both personal growth as well as startup success. Confronting it is essential.

Founders can learn to spot the triggers, and they can vary significantly by person. These are just as likely to occur after a great achievement as they are in the build-up.

Fundraising is a well-known trigger. Under the right guidance, first-time founders can approach this particular challenge with the confidence of a second timer.



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