Leadership: How to guarantee your startup will fail
A few years ago, I was approached by my business attorney regarding a potential consulting assignment for someone who wanted to start a nonprofit. I helped that person with bylaws, board recommendations and potential funding avenues for the organization, an information portal for limo, taxi and ridesharing drivers. Several of the drivers then decided they wanted to start a for-profit company, an alternative to Uber and Lyft, and they wanted me to be the CEO and co-founder.
The company we named Jasper was intended to be a driver-owned company that listened to the drivers and the customers, and provided top-level service. It would use AI to refine the user experience, it would integrate customers and drivers suggestions, and it would provide features that were (then) not available with other ride sharing companies. The name a nod to a British driver, Trevor, I’d known years ago and who was the driver for the CEO of a company in London. Trevor was always there when you needed him, made his passengers feel safe, and looked and dressed the part. (The name Trevor was taken, but a variant of Jasper was available and we liked the name).
We hashed out our business plan, created a pitch presentation, found a seed investor who loved our idea and told us they were in, got ourselves one of Silicon Valley’s top startup attorneys (who was the attorney for Snap and Snapchat), and began looking at office space and reviewed logistics to launch. I did nearly all of the work. And, right before we incorporated, I walked away.
Why did it fail? From the get-go, this business was doomed. The main reason we due to its founder team. We had five founders who didn’t fully trust each other and didn’t work well together. It was me and four limo company owners/drivers. It was me and four men. It was me and four men who wanted a woman leader but didn’t really want a woman leader. They wanted a woman CEO because the target market was women and they thought it would help market the company. I wanted to be the CEO for a Silicon Valley startup where women CEOs are few and far between, and because the driver industry is a heavily male-dominated workforce. I had the communication, organization, leadership skills and connections they lacked; they had the knowledge of the industry and operations; they had the driver perspective; I had the user perspective. The idea was good but I knew we needed to add experts to our team that had startup experience and knew the ropes. I planned to pull in that expertise, and perhaps take a different role so that we could ensure success. Some of the other founders didn’t want to share the pie. There were disagreements on how to proceed and what expertise was needed.
But the real reason we failed was that we lacked trust. The four of them didn’t trust each other and they certainly didn’t trust me. I would get individual calls from each of the other founders after our meetings. They weren’t comfortable bringing up their issues in the meetings because the trust wasn’t there from the beginning. We didn’t know each other that well, and the four of them thought each of the others was working to undermine them. I wasn’t sure I trusted them either, based on what I was experiencing. The final chapter of this startup idea occurred when a couple of founding team members bad-mouthed each other to the investors. Once I heard this, I knew it was over. I got a call from the investors shortly thereafter explaining that they were pulling out because they didn’t want to work with a team that wasn’t on the same page, and the team was too big to manage and didn’t have the right mix of experience. They thanked me for my efforts and told me they would happily work with me again under different circumstances.
The other founders didn’t even realize what had hit them. I said I was out and they decided to keep going and try to find other investors without me. I knew nothing would come of it because they didn’t have what it takes to make it work. Starting a startup requires a founding team that has real trust, a shared vision, and recognizes its shortcomings. Without those three things, any startup is guaranteed to fail before it even gets out of the gate. As the leader, I tried to create an environment of trust and transparency and realistic expectations, but it wasn’t enough. The trust wasn’t there; the ability to work together for a common cause wasn’t there, and commitment to do what you need to do to make the company a success wasn’t there. Getting millions in seed money is not what it takes to get off the ground — trust is.
I regret nothing from the experience I went through with this startup. I learned one of the most valuable lessons on leadership and success and got a crash course in startups and Silicon Valley venture/angel world, and for all of that I am grateful.
P.S., I am thoroughly addicted to watching Silicon Valley on HBO and eagerly await the release of each new episode.
