The Effective

Founders
Project
Seven leadership strategies to overcome
the biggest risk to startup success

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 Preserve
TL;DR: Seven ways to become interpersonal equity

a more effective founder Violated expectations are the

main source of conflict. The most
effective cofounders openly
discuss and document what they
People issues are the biggest risk to Protect the team expect from each other and
funded startups. Treat people like from distractions constantly check for interpersonal
volunteers While founders are typically equity—do both of you feel that
seen as distracted by new expectations are fair?
55% of startups fail because of people The best people are like volunteers
—they’ll work passionately for a ideas, the best ones create
problems, according to a study by Harvard, focus and clarity. Set clear
hard, meaningful mission. They
Stanford, and University of Chicago researchers1. goals and priorities to build
also have options. As the adage
We put the most effective founders under a goes, people leave bosses, not momentum for your team,
companies. Create a talent which in turn fuels better
microscope to understand their strengths
monopoly by understanding the performance and morale.
—and biggest potential blind spots.
psychology of your employees.

Minimize unnecessary
micromanagement Invite disagreement Keep pace with expertise
While data shows micromanaging can be helpful in You want a conflict of ideas, Leaders need to know enough about each role to
certain situations, the most effective leaders aim to not personalities. Our data hire the right people and help develop their team.
delegate work in order to scale both themselves 93% of the most effective founders have the
suggests that founders
and their businesses. Our data suggests that technical expertise to effectively manage the work.
micromanaging can be a fatal flaw for CEOs. consistently undervalue
giving teams an opportunity
to voice their opinions, while
employees value it highly.
Encourage open team
Overcome discouragement
dialogues early and often.
While most would expect self-confidence to grow
with time, our data suggests that the most effective
1. Gompers, Paul A., William Gornall, Steven N.
founders are not nearly as confident as the least
Kaplan, and Ilya A. Strebulaev. "How Do Venture Proprietary + Confidential
Capitalists Make Decisions?" NBER Working Paper effective. Build a support system and know how to
Series, No. 22587, September 2016. ask for help in order to overcome doubt.
Startups have real—but solvable—people problems

Startup founders take many risks. Tech risk, market The goal of this research is to provide actionable
risk, product risk, financial risk. advice for founders of all stages based on learnings
from high-potential startups across the world.
But there is one risk which research indicates may Through in-depth analysis, exhaustive research, and
pose the biggest threat of all to funded startups. thousands of hours spent with entrepreneurs around
Often initially invisible to founders, the worry is the world, we hope to provide practical, universal tips
painfully felt once it is too late: people problems. on how to recognize and correct the people
problems that pose the biggest risk to your startup’s
Founders consistently underestimate the success.
human-related issues that can destabilize startups.
As Sequoia Capital partner and former Google SVP
Bill Coughran once said: “Engineering is easy.
People are hard.” This is not meant to be the final word
on what it takes to be an effective
leader. Each founder’s journey is
unique. Please take from this only
what helps you and your team.
3
 Engineering
is easy.
People are hard.
Bill Coughran
Former Google SVP of Engineering
Partner, Sequoia Capital

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People-related problems are the
biggest risk to funded startups
Most important factor that contributed to a startup failing
(Based on a large-scale survey of 885 venture capitalists around the world by
Harvard, Stanford, University of Chicago researchers Gompers et al, 2016)

Management team 55% The leading people problems:

● Cofounder conflict
Industry conditions 10% ● Hiring and retaining talent
● Poor decision-making and
Business model 10%
prioritization
Timing 9% ● Reluctance to make tough
decisions on team members
Technology 8%

Board conflict 3%

Capital market conditions 3%

Bad luck 3%

Source: Gompers, Paul A., William Gornall, Steven N. Kaplan, and Ilya A. Strebulaev. "How Do Venture Capitalists Make Decisions?" NBER Working Paper Series, No. 22587, September 2016.
Notes: This study has been supported by several other studies, including one done several decades ago by Harvard and McKinsey & Co. researchers showing that an ineffective senior management
was the top reason for failure (65%). Why do startups fail? is a difficult question to answer rigorously. Many startup founders, advisors, VCs have talked about their theories about startup failure,
which are all anecdotal at best. At the time of the writing of this report, there are no controlled experiments that have been published that definitively answer this question. 5
We built one of the deepest and broadest
datasets on growth-stage1 founder capabilities

900+
founders/startup leaders in ...with a focus on CEOs and CTOs
our dataset and thousands Breakdown of primary roles of founders/leaders in dataset
more reached through our
startup communities CEOs 39%

CTOs 21%

Operations 7%
...in more than 40 countries...
Africa Americas Asia and the Middle East Europe Product Management 6%
Egypt Argentina Bangladesh Malaysia Belarus
Ghana Brazil China Oman Belgium Finance 3%
Kenya Canada India Pakistan Czech Republic
Nigeria
South Africa
Chile
Colombia
Indonesia
Israel
Philippines
Singapore
Estonia Others 24%
France
Tanzania Ecuador Japan Thailand
(incl. Sales & Marketing, People)
Germany
Uganda Haiti Turkey Vietnam Lithuania
Mexico Poland
Puerto Rico Russia
USA Sweden
United Kingdom

1. Most startups included in this study participated in one of Google Launchpad’s accelerators, most of whom are out of beta stage, with some market traction, and at a Series A + funding round. 6
Note: A more detailed discussion of our methodology can be found in the appendix.
Through a multi-rater feedback tool,
we asked cofounders, employees,

33
investors, and advisors to weigh in

7.1 leadership capabilities

assessed

average number of

230,000+
evaluators per subject

founder impressions included in this analysis

Note: A more detailed discussion of our methodology can be found in the appendix. 7
 We studied the most and least effective founders in our dataset
What do the most effective founders do well that the
least effective don’t?
This comparative analysis is meant to overcome survivor bias—the tendency to look at
successful entrepreneurs and assume that what they do makes them successful—
without checking if those that failed did exactly the same yet failed anyway.

Least effective founders Most effective founders

Leadership effectiveness in our dataset relies on reported perceptions of effectiveness by evaluators. Evaluators included cofounders/peers and direct reports. Subjects
without this well-rounded evaluation and with less than four evaluations are removed from this analysis. Three questions were asked to establish a founder’s overall
effectiveness - “Is a leader I would recommend others to work with”, “Is the kind of leader that others should aspire to become”, “Overall, is a very effective leader”.

Learn more about our methodology and how we overcome survivor bias and halo effect.

8
 The most effective
founders use these seven
leadership strategies

9
The most effective founders...

1 Treat people like volunteers Page 11

2 Protect the team from distractions Page 18

3 Minimize unnecessary micromanagement Page 23

4 Invite disagreement Page 30

5 Preserve interpersonal equity Page 37

6 Keep pace with expertise Page 43

7 Overcome discouragement Page 48

Appendix - About our methodology Page 56

Appendix - About the authors Page 59

10
The most effective founders...

1. Treat people
like volunteers
1. Treat people like volunteers

The most effective founders...

% of evaluators that agree or strongly agree Researchers have investigated
the impact of charismatic/
transformational leadership
Get others to feel they share 95% versus more task-oriented,
transactional-style of leadership.
the same vision or purpose 48% 2x
These studies suggest that
transformational leadership
leads to positive performance
91% outcomes such as productivity,
Lead by inspiring people
41% 2.2x task persistence, work
satisfaction, among others.

Help the team understand what

they personally gain by working 86%
hard towards the success of the 45% 1.9x
startup

Most effective founders

Least effective founders Note: The idea behind treating people like volunteers is credited to Peter Drucker, one of the most
influential thinkers and writers on the subject of management theory and practice.

12
1. Treat people like volunteers

This leadership style is universally important across countries and

industries

Breakdown by economy and vertical types

(% of evaluators that agree or strongly agree)

Engineering-dominant
Developed economies 89% tech verticals 91%
(USA, Canada, Singapore, (Health, life sciences, IoT,
Japan, France, etc.) 50% 1.8x finance, ads, gaming, energy, 45% 2x
comms/social, robotics etc.)

Operations-dominant
Emerging ecosystems 91% tech verticals 93%
(India, Indonesia, Brazil, Nigeria, (eCommerce, ridesharing,
South Africa, etc.) 41% 2.2x food, logistics, agriculture, real 30% 3.1x
estate, etc.)

Most effective founders Least effective founders

13
1. Treat people like volunteers

Build a talent monopoly by understanding what attracts the

best people and motivates them to excel (true of fresh
grads as well as experienced, world-class talent)

● Good talent are drawn to a hard, meaningful mission.

The best people want to work on hard problems that matter.

● Great work is a result of discretionary effort.

Productivity is unlocked when people work passionately and are given
space to pursue their goals.

● Paying a person’s salary doesn’t excuse poor behavior.

There is absolutely no excuse for being disrespectful or disingenuous.

● Good people have options.

They don’t need to work for you. People leave bosses, not companies.
14
Do something that most people think is hard.
When you tell someone what you’re starting, their
reaction should be, “Are you sure you want to
do that? That’s too hard.”

If you try something easy, there will be five other

companies doing the same thing two months later.
But if you try something that’s difficult at first,
everything gets much easier as soon as you make
it through those initial challenges. Competition will
be lower, because everyone else thought it was
too hard. Recruiting good people will be easier,
because good people like doing hard things.

David Velez
Founder of Nubank, the largest financial technology bank
in Latin America

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1. Treat people like volunteers

Outsource
inspiration
When the leader described When the leader invited a user to describe
Before you give that
the impact of the work to the team... the impact in a five-minute session...
inspirational speech,
consider that you might
not be the best one to do it.

This study by Adam Grant and

colleagues tested the impact
of various motivational +171%
+142%
approaches on team
productivity. No effect No effect

Increase in Increase in Increase in Increase in

persistence productivity persistence productivity
(one month after) (one month after)

Source: Grant, A.M., Campbell, E.M., Chen, G.Y., Cottone, K., Lapedis, D., & Lee, K. (2007). Impact and the art of motivation maintenance: The effects of contact with 16
beneficiaries on persistence behavior. Organizational Behavior and Human Decision Processes, 103, 53-67.
 Craft the work in a
Three sources of way that lets them
achieve these
motivation personal goals

Heart
Head Others are motivated by a passion
Wallet
for a the specific industry or a
commitment to target users. Others are motivated by the
Some are motivated by the
financial wallet or even a social
intellectual challenge to solve a They can lose steam when when
wallet—social status, title, access
user need with technology—but the problem becomes irrelevant
to important people, association
can become discouraged when or the solution incremental.
with one’s tribe. They may feel less
the problem proves to be
invested when exit plans seem
unsolvable or unchallenging. unlikely or status/access shrink.

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The most effective founders...

2. Protect the team

from distractions

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2. Protect the team from distractions

Most effective founders are seen to…

(% of evaluators that agree or strongly agree)

Invest their time in what really 96%

drives success for the business 68% 1.4x
42%
Keep the team focused on 93%
priority deliverables/objectives 67% 1.4x

CEOs are easily

Most effective founders distracted
Least effective founders 42% are seen by their
teams as distracted by
new ideas or projects.

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2. Protect the team from distractions

To build a team that does amazing work,

engineer for positive momentum

Inspires with exciting, Keeps team focused Clearly communicates Achieves high-quality
hard, meaningful goals on priorities expectations results through the team
(95% fav*) (93% fav*) (86% fav*) (95% fav*)

Creates momentum and builds team morale

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*fav = favorable, % of evaluators agreeing the most effective founders do this well. 20
We launched our app in January 2015 with 40-50
employees; now we have more than 3,000. The
knowledge of how to scale was missing and
we made a lot of mistakes as a result. One
particularly problematic area was communicating
our mission and the top priorities of the company.
We should have done this when we had 100
employees. Keeping 100 people focused is
already a challenge, and now we have thousands
of people across multiple countries.

Kevin Aluwi
Co-founder and CEO of Gojek, one of Southeast Asia’s
largest on-demand, multi-service platforms
(Go Figure by GOJEK podcast, published April 29, 2019)

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 Tactics to keep
Protect your team focused

their time
Create project “burial
rites” to redirect focus
Plan for recovery
Clearly demarcate the close of an effort,
Be mindful of executive project, or initiative with a post-mortem Take time to recover at the end of
1
magnification discussion or a note of gratitude to
collaborators. Or consider an annual ritual
a sprint of activity. A team meal,
mental health day, or a small
of X, Alphabet’s moonshot factory: as token of appreciation allows
sing
Employees can misinterpret a pas part of Dia De Los Muertos celebrations, people to breathe and
or critique , or rand om
suggestion, min Xers burn their “dead” projects on a recuperate.
pie- in-th e-sk y idea as a serious
symbolic funeral pyre.
e
dictate from the boss. Communicat
carefully, and che ck if emp loye es
understand correctly.

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1. An idea popularized by Robert Sutton, Professor at Stanford University. Learn more here.
The most effective founders...

3. Minimize unnecessary
micromanagement

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3. Know when to micromanage

Some situations call for micromanagement—but not all

Micromanagers Macromanagers

Focus on... The details of the work Big-picture goals

Get work done via... Close observation and direction, Autonomy and trusting the team to pull
engaged problem-solving you in as necessary

Best when... New teams that need more initial Highly-capable teams, clear goals and
guidance, ambiguous goals, metrics, cyclical or low variabile work
high-coordination or high-stakes work

When misused... Teams feel constricted and depend on Teams feel directionless and conflicts
the manager to resolve challenges, among peers remain unsurfaced and
often leading to declining morale unresolved—morale also declines

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3. Know when to micromanage

Our data suggests micromanaging is a bigger

derailer for CEOs than other functional leaders

Micromanaging as a predictor
of ineffectiveness

CEOs Ops, product, CTOs

finance, sales/
marketing, etc.

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3. Know when to micromanage

But make it a goal to minimize unnecessary

micromanagement so you can scale yourself
How you spend your time:

Time spent
micromanaging

Time spent
scaling yourself
and the business

You’ll spend most of your You’ll manage outcomes

time instructing and with pre-agreed review
monitoring your team milestones

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When you find yourself micromanaging too
often, try spending that time sharing the big
picture. When they really understand how their Photo to
work fits in, they make better decisions and go here
micromanagement becomes less necessary.

Kasia Dorsey
Founder, Yosh.AI, a conversational
commerce voice platform based in
Warsaw, Poland

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3. Know when to micromanage

Should you micromanage a project? Check this list first

Allow team to self-manage if you Manage more closely if you assess

assess them to lean more to this side your team to lean more to this side

Confident that we have the Unclear about the metrics of

Are you clear about which goals to pursue? right metrics success, learning required

Work is highly modular, Collaboration required is

How interdependent is the work of the team? repetitive, independent high

How capable is the team to make good Highly skilled with good Novice, with no track record
decisions and operate independently? judgment in good judgment

How much trust is there to resolve Almost no escalations are Frequent escalations and
conflicts among peers? brought up deadlocks

Team is in multiple sites/

How geographically dispersed is the team? Team is local
time zones

High, with frequent release Extreme, with once a year

How much deadline pressure exists,
cycles (e.g., consumer release cycles (e.g.,
requiring quick decision making? software) hardware or enterprise)

How critical is the product/feature/project? Not a criteria

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 Minimize
Actions to unnecessary
micromanagement
consider
Set the destination, but
have them lay out Have set check-ins
the path
If the team is Come to your weekly standup saying If goals are clear, agree on when to
over-reliant on you... something along the lines of: “We need check-in at the beginning of the
work. Without this, the team will be
to achieve these 5 things this
of week/month/quarter. Figure out what unsure of what you expect, and
...refrain from sharing your point you’ll feel uneasy about waiting for
y. Instead, ask: sequence makes sense.”
view right awa the output. If you check-in without a
“What have you thought of doing?” pre-agreed time, the team may feel
s
Acknowledge where their instinct like you don’t trust them.
are well-cal ibrated, and ove r time
they’ll build their confidence to call
the decisions themselves.

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The most effective founders...

4. Invite
disagreement

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4. Invite disagreement

How important is it for founders to invite disagreement?

We got mixed reactions

When we asked When we asked

their cofounders founders themselves...
and employees...

42%

3%

...would consider “inviting disagreement” as important to being an effective leader.

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4. Invite disagreement

Yet we know from our data that effective

founders consistently invite disagreement

Values the perspectives of 91%

others, even if they are
different from their own 57% 1.6x

79%
Invites others to disagree
43% 1.8x

Most effective founders Important note: You want a conflict of

ideas, not personalities—but inviting
Least effective founders disagreement where trust doesn’t
exist will devolve into chaos. Make sure
your team feels comfortable voicing
opinions without worrying about
bruised egos or retaliation.
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 Debate. Argue. Get into it. The best
results come from passionate,
constructive, positive contention.
Encourage it. Even force it. But know
it requires a foundation of trust,
honesty and respect. If you don’t
have that, you just get pure
contention, and that ain’t good.
Anil Sabharwal
VP of Product Management and founder of Google Photos,
Google’s 9th (and most recent) billion-user product

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4. Invite disagreement

Though it might not

always feel that way,
disagreement amongst
Perceived effectiveness Actual performance
diverse teams actually
leads to more effective
outcomes
In an experiment conducted by
researchers from Kellogg and
Stanford business schools,
respondents were put in socially
diverse and non-diverse teams. At
the end of the performance task,
they were asked to predict how
well they did as a team.

Socially diverse groups took more

time and effort to debate their
opinions and disagree, but Socially similar Socially diverse Socially similar Socially diverse
ultimately realized more significant
performance gains.
Note: The study defines social similarity based on race, gender, country of origin, social circle.
Source: Phillips, K. W., et al (2009). Is the pain worth the gain? The advantages and liabilities of agreeing with socially distinct newcomers. Proprietary + Confidential
Personality and Social Psychology Bulletin, 35, 336-350. 34
4. Invite disagreement

Important note: Passive aggression is a more insidious

threat to a business partnership than visible displays of
Cofounders that were anger. Gossip and unspoken frustration erode at the
team’s commitment to each other and the work.
first family or friends Instead, find a way to talk about uncomfortable and
often shy away from Damage if
inconvenient topics so the issues are put into words,
allowing you to hit reset and clarify expectations.
disagreement because relationship
blows up
of the cost to the
relationship—which
makes them the least
stable business
partnerships...
Likelihood of
...compared to partnerships with having sensitive
acquaintances or previous discussions
coworkers. Family/friends are
more likely to shy away from Family and friends Acquaintances Previous colleagues
sensitive conversations because Less stable partnerships More stable partnerships
of the high cost to the
relationship if it blows up—which
ironically makes it much more Each additional friend/family member in the founding team increases the likelihood of a
cofounder leaving by almost 30%.
likely for exactly that to happen.

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Source: Wasserman, N. (2012). The founder's dilemmas: Anticipating and avoiding the pitfalls that can sink a startup. Princeton University Press. 35
 Invite disagreement
Actions to —without being
disagreeable
consider
Talk about the
“elephant in the room”
*
Tackle issues head-on by asking each
employee to anonymously write down what
Beat groupthink with
Anticipate sources they consider to be the issues that everyone the 2-minute hack
is aware of but no one wants to talk about.
of disagreement Collect the sheets, and listen to what the
At the start of a meeting, ask team
team has to say. Consider the pre-mortem at
the start of an initiative to members to write their position down
In FoundersLab, we ask cofounders anticipate challenges. before discussing a decision that needs
to discuss these 25 Tough to be made. Then give each person
e
Questions early and often. Set asid uninterrupted time to share their
to opinion. Without this step, the risk of the
an afternoon to discuss answers
these with your cofounders. first view anchoring the group is high.

*Groupthink = when the opinion of the group is unconsciously anchored by the first one shared, or the one shared by the person with the most power Proprietary + Confidential
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in the group. Both individuals are mostly likely not the one with the best information or greatest expertise."
The most effective founders...

5. Preserve
interpersonal
equity

37
5. Preserve interpersonal equity

Unmet expectations cause the majority of cofounder conflict.

Our data suggests that many founders keep track of their
cofounder’s duties, but have a major blindspot when it comes
to their own
When founders are evaluating themselves, But when they evaluate other cofounders, they
they equate effective leadership with only equate effective leadership with
1 of 33 capabilities 17 of 33 capabilities

Effective leadership is only about Effective leadership is about inspiring the

inspiring the team team, collaborating effectively, mentoring
others, staying focused, etc.

Note: In this analysis, we look at the strength of correlation between each of the 33 leadership capabilities and overall effectiveness ratings. When the factor of correlation (r squared) is greater than
.50, we would consider this as strongly correlated. In this analysis, only 1 of 33 capabilities were strongly correlated to overall effectiveness on the self-evaluation data of founders. But 17 of 33
capabilities when looking at evaluation data of cofounders on the subject. We see a similar asymmetry if we looked at both moderately and strongly correlated capabilities to overall effectiveness 38
(12 capabilities correlate moderately with effectiveness on self-evaluation, as opposed to 33 on evaluation data of cofounders).
5. Preserve interpersonal equity

The expectation asymmetry leads to

a breakdown in the cofounding team

Founder has a minimalist Bigger, implicit Founder does not meet Cofounders don't feel
definition of their expectations placed implicit expectations, the partnership
leadership role on the founder by inevitably is fair
cofounders

39
It’s easy to make assumptions about your
cofounder’s knowledge, skills, and
commitment. A non-technical cofounder
will often assume that the technical
cofounder knows everything about how to
build the product. It's easy to assume that the
business cofounder knows how to get access
to all
the resources the business will need.

It’s been incredibly useful for us to uncover

and discuss our expectations, then one by
one confirm or discard them.
Folake Owodunni
Cofounder of Emergency Response Africa, a healthcare
technology company that is changing how medical
emergencies are managed in Africa

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5. Preserve interpersonal equity

Regularly check on your cofounding team’s

“interpersonal equity”

Check for interpersonal equity by asking yourself and your cofounders:

How satisfied am I with what I contribute as compared to what

my cofounders contribute?

How satisfied am I with what I receive as compared to what

my cofounders receive?

How fair do I feel this partnership is overall?

41
 Discuss and
Actions to document
expectations
consider
Monitor
interpersonal equity Discuss hypothetical
Use the Founder’s User Periodically ask your cofounders how
break-up scenarios
Guide to clarify they feel about the division of
responsibilities. If it’s not a 10 out of 10, More popularly known as a
expectations then talk about what needs to change (in pre-mortem, ask each member of the
what is given or received). Some cofounding team, “If our startup failed
The Founder’s User Guide was crea
ted questions to help can be found in hypothetically due to cofounder
to min imize conflict and has bee n used section 3.2 of the Founder’s User Guide. conflict, what might those conflicts be?
by hundreds of founders to clarify How do we mitigate them from
expectations. Block off a Friday happening?” Some questions to help
afternoon to write and discuss you
r can be found in section 3.3 of the
User Guid es*. Founder’s User Guide.

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*Pro tip: You can use a similar User Guide for your c-levels and middle managers.
The most effective founders...

6. Keep pace
with expertise

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6. Keep pace with expertise

Having enough expertise allows leaders to...

Identify opportunities to 84%

develop people's skills/career
46% 1.8x
93% (e.g. projects, mentors, training)

Invest time and effort in 79%

developing the skills of others 43% 1.8x
93% of the most effective
founders have the
technical expertise (e.g.
coding, closing sales Most effective founders
deals, finance) to
Least effective founders
effectively manage
the work

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You have to figure out how you’re going to
leverage the new technology that’s in front of
you. You can hire for some of that expertise,
but you also need some technical depth to
know who to hire and how to shape the
product. Seek out mentors and meet people
working on deeply technical problems.

Jewel Burks,
Head of Google for Startups U.S. and
founder of Partpic (acquired by
Amazon in 2016)

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 Do your
homework to
Keep up with stay ahead of
expertise your industry

Source mentors for your

team from your network
Be selective of
startup events
Know enough to know Ask trusted experts in your network to
offer guidance and expertise to your
what skills to hire for team, especially when you’re out of your While networking is important, not all
depth. When there is great chemistry startup events are helpful or relevant to
with a mentor, even a monthly all founders. Carefully choose which
Do every role once. It will give you 30-minute call can be invaluable.
some data as to what kind of skill
s meetups and conferences you attend
you need to find. It also gives you
a based on your startup stage, industry,
sense of how long things will take , and needs to maximize your time and
and ask the right que stions to kno w to connect with the right people.
if your team is on |the right track.

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The most effective founders...

7. Overcome
discouragement

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7. Overcome discouragement

While most founders expect to gain self-confidence along with

experience, data suggests that more effective founders are actually less
confident—and more prone to discouragement—than the least effective
Over-
confident
Self-evaluation*

What most people The data showing that

tend to expect -- your more effective founders are
self-confidence grows actually less self-confident
as you get better in their abilities

Under-
confident
Bottom Second Third Top
Effectiveness quartile**
*Self-evaluation looks at the delta between a founder’s self-rating and the rating they get from others. Only founders with at least 4 ratings from cofounders and Proprietary + Confidential
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employees are included in this analysis. Over-confident implies self-ratings are higher than ratings by others.
**Overall effectiveness is based on the evaluation from cofounders and employees.
7. Overcome discouragement

This type of personal humility or underconfidence has been

studied extensively as the “Dunning-Kruger effect”

100%
Confidence is highest among the least competent.
Two gaps keep people in this place:
● Lack of skill keeps them from avoiding mistakes
● Inability to recognize and fix a mistake
Confidence

Confidence increases, but never to the

same level as when people are
Discouragement can come as incompetent. One common assumption
you begin to learn and realize to flag: experts tend to wrongly assume
how far you are from being that others can reach a similar skill level
skilled. Discouragement is a just as they were once amateurs.
signal of growth!
0%

Know nothing Experience/Skill Expert

Source: Kruger, J., & Dunning, D. (1999). Unskilled and unaware of it: how difficulties in recognizing one's own incompetence lead to inflated Proprietary + Confidential
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self-assessments. Journal of Personality and Social Psychology, 77(6), 1121. Image is a stylized representation of the Dunning-Kruger Effect found in
Poundstone, W. (2017). Head in the cloud: Why knowing things still matters when facts are so easy to look up. New York: Little, Brown and Company.
Perfect confidence
is granted to the
less talented as a
consolation prize.
Robert Hughes
Author

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7. Overcome discouragement

Discouragement and underconfidence

can warp reality and mental responses
in a number of ways

Catastrophizing Overgeneralizing Over-personalizing Over-externalizing

When you disproportionately When you assume this period When you blame yourself for When you blame external
react to a disappointment, of discouragement is just the everything—even situations factors for everything, even
turning it into a bigger issue latest in a future of ongoing outside of your control. when you *did* contribute to
than it need to be. discouragement. the eventual outcome.

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7. Overcome discouragement

Effective founders use three important strategies to overcome discouragement:

focus on the positive, disclose weaknesses, and seek help

Most effective founders are seen to...

(% of evaluators that agree or strongly agree)
Most effective founders
See the positive in people, 93%
situations, and events more Least effective founders
often than the negative 59% 1.6x

Be honest about own 89%

strengths and weaknesses 61% 1.5x

Ask for help in 88%

challenging situations 55% 1.6x

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 Overcoming
Actions to discouragement

consider
Confidence ≠
competence
Help someone else
Build “no-bullshit”
Confidence is the unspoken
relationships currency in decision-making. Mentor someone earlier in their
Foster a team culture that founding journey. This not only
prioritizes strong opinions weakly helps you get out of your own
Create a circle of trust with fellow held, rather than weak opinions mental ruts, but it also provides
to
founders outside of your industry strongly held. a chance to reflect on how far
no-e go con vers ations.
have honest, you’ve come and how much
g
Listen when they say you’re bein you’ve gained.
f, or whe n you ’re
too hard on yoursel
simply wrong.

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Thank you for reading! Our deepest gratitude...
Any questions? Reach out to: ...to all those who took time to review our
martingonzalez@google.com early drafts and gave such thoughtful
feedback to take this work to the next level:

Ruchita Agrawal Allan Kajimoto

Greg Albrecht Dana Landis, PhD
Alap Bharadwaj Ben Mathes
Malika Cantor Tony McGaharan
Ana Figueroa Kerry O’Shea
Marcelo Furtado Annamaria Pino
Kate Gray Annika Stephan
Mario Guajardo Lucero Tagle
Claudy Jules, PhD Andy Young
Appendix
About our methodology.
About the authors.

55
Startups have people problems | Appendix

Our methodology – How we gathered data on founders

Founders are assessed on 36 leadership behaviors Overcoming survivor bias
● We assessed founders and executives using a tool that’s commonly known as a multi-rater feedback tool or a ● Studies that claim to have an insight into
360 degree feedback tool what the best leaders or founders do often
● The tool was created through a review of academic literature in the field of entrepreneurship, consultation with suffer from survivor bias -- when one looks
professors in some of the world’s top business schools, and insights from research on great leadership at Google at success cases and assume what they did
● Each of the 36 leadership behaviors are rated on a 5-point Likert scale from ‘strongly agree’ to ‘strongly is what led to their success, without
disagree’. All questions were optional checking if the failure cases had similar
● Each subject was asked to identify cofounders, employees, board members, advisors to provide an evaluation. features and failed anyway
Subjects were also asked to evaluate themselves ● Our dataset includes both effective and
● The feedback tool was available in 8 languages. Translations were done by professional translators and ineffective founders. To overcome survivor
underwent a light touch linguistic validation process bias, we compare what the best do well that
● On average, each founder/executive received 7 evaluations the worst don’t do so well. If the best and
● To counter the halo effect, where likeability influences someone’s perceived effectiveness, and to ensure a worst are doing the same, even if the best
well-rounded view on the subjects being evaluated, we’ve discarded from the analysis subjects without both are doing it really well, our analysis would
peer/cofounders and direct reports among the evaluators and subjects with less than 4 evaluations rule it out as an explanation of success

How we measured leadership effectiveness Correlational methods

● Leadership effectiveness in our dataset relies on reported perceptions of effectiveness by evaluators. Three ● Despite all the care we put into the analysis,
questions were asked to establish a leader’s overall effectiveness -- “Is a leader I would recommend others to this data is correlational at best
work with”, “Is the kind of leader that others should aspire to become”, “Overall, is a very effective leader” ● We augment the report with experimental
● Evaluations like these rely on subjective, perceptual data and will therefore have some amount of noise. The best studies to help establish causation
in class approach in defining effectiveness involves collecting observations on the leader and business metrics
as proxy for effectiveness (e.g. employee departures, startup valuation, profit and loss statements, user growth).
That approach has its own set of issues: disclosure at the pre-IPO stage is limited and even if shared, metrics of
business growth would be subject to a wide range of internal and external factors, making attributions difficult to
draw
● Some studies have suggested that certain leadership attributes predict up to 39% of a company’s profitability.
But the researchers are quick to say more needs to be done to establish attribution
 Internal only. External release forthcoming.

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Startups have people problems | Appendix Get things done
Our methodology: leadership behaviors Running an engine that gets stuff
done entails clear
we assessed communication of performance
expectations and an ability to
hold people accountable to
them. It’s critical to demonstrate
Inspires commitment understanding of the challenges
and work closely with the team
This isn’t just about having a compelling, when necessary, but also know
visionary pitch deck. Are founders able to when to step back.
unlock people’s motivation? Are they able to Absorbs uncertainty
get others to feel they share in the vision and
glory that comes with working on the startup? Effective leaders listen for
signals in the market and pivot
quickly when unexpected
events arise. They work
effectively with imperfect and
incomplete data.
Develop others
Developing others benefits both the business and
the team. It starts with knowing the personal
aspirations of people, investing the time in Perseveres and
coaching and mentoring, and most importantly,
Collaborates effectively giving regular, timely and actionable feedback. focuses
How well do founders
Great collaboration involves listening, handle setbacks? Are they
asking questions, and inviting others transparent with their
to disagree with the founder’s point cofounders/team about
of view. Collaborative leaders strengths and
encourage teamwork and model it by weaknesses? Do they ask
showing respect, remaining calm in for help? Are they
stressful situations, and actively focused on the right
resolving conflict. priorities and careful
about distractions?
Startups have people problems | Appendix

About the Authors

Martin Gonzalez
Martin Gonzalez is the Global Organization Development Lead for Google’s
Compute Business (think Chrome, Android, Pixel, Nest, Fitbit, AI/Machine
Learning/Quantum Computing research groups). He works with Google’s senior
leaders to shape their team’s culture, grow their people and build cool things
that matter. He’s part of the faculty of the Google School for Leaders and has
been a frequent guest lecturer at MBA programs at INSEAD, Stanford, Wharton
and London Business School.

He is also the creator of Google for Startup’s PeopleLab, an effort to take what
Google has learned about developing people and culture to startups around the
world. He has run leadership courses and mentored thousands of tech startup
founders, from seed stage to unicorn, across more than 40 countries in the
Americas, Asia, Africa, and Europe.

Martin holds two master’s degrees in leadership studies and behavioral science
from Columbia University and the London School of Economics. He’s lived and
worked in New York, Jakarta, Singapore, Taipei and Manila where he
is originally from. Today, he lives in the San Francisco Bay Area with his wife
and three kids.
Startups have people problems | Appendix

About the Authors

Josh Yellin
Josh is a cofounder of Google’s global startup acceleration program. During his
time with Launchpad, Josh led the growth of Launchpad Accelerator into a global
program focused in 8 locations. The program partnered closely with 300 of the
foremost growth-stage startups across the world.

Additionally, upon seeing the broad-sweeping global need for stronger

management and leadership among the world’s top startups, Josh cofounded
PeopleLab with Martin Gonzalez in 2015. Since its inception, Josh has facilitated
leadership workshops with hundreds of founders in several cities around the world
and has mentored many startups on various people and operations topics.

Today, Josh is a Chief of Staff in Google Research.

Prior to joining Google, Josh grew up in Chicago, spent a few years as an outdoor
guide in Montana and Alaska, led operations for the largest startup community in
Silicon Valley, and co-founded Urban Rivers, an environmentally-focused nonprofit.

Josh studied biology at the University of Illinois and business at the Wharton
School. At the moment, Josh lives in San Francisco but finds as much time as he
can for camping outside the city.