Why founders split? 3. The shiny new object syndrome

R, Ra and M were the 3 co-founders of a SaaS company, I met first more than a year ago. R and Ra were related to one another and M had worked at a company that R was a client at. R was the “domain expert” and knew the business problem fairly well, whereas M was more the “tech person”. While M was not a developer per se, Β he was most technical of the 3 co-founders.

Ra was the “business development” person whose role it was to talk to customers, get some “partnerships” signed and talk to potential investors. (Side note: I dont understand business development roles in any small company. Either you are a sales person or you are a developer. Everyone else is overhead). In other words a catch-all bucket.

Ra was asked to join by R, who felt that between M and himself, they both did not have enough of a sales background and decided to get someone they could trust to do the role.

Ra himself was previously a new business development executive at a large corporate bank. He had done well at the bank and had made his way to associate vice president in less than 5 years. He had very little knowledge about the space in particular or passion around it. He wanted to do a startup and since he was approached by R to be a co-founder, he was pretty excited about it.

For the first few months, getting potential customers to talk to, with respect to the new product they were building, was not difficult. Most people who R knew were interested and keen to talk and learn about the new product. Ra was involved in all discussions and was trying to get up-to-speed with the intricacies of the market and customer problems.

R was the most passionate of the lot and knew the most about the problems, while M leveraged 2 external outsourced resources to get the initial prototype ready. Things were going well apparently and I met them at the Microsoft accelerator during an event.

4 months later I heard that Ra had left. I did not meet Ra, but R had spoken about him highly, so I was curious why he left.

R said he could not close any new deals and did not “understand the market”.

While I pointed out that R knew about this before since Ra was not a market or domain expert, he evaded the question with “but I expected him to learn quickly”.

When I spoke with M separately he mentioned that Ra never got really passionate about it and there was little effort on Ra’s part to understand the market. While he felt that Ra setup a lot of meetings with other potential customers and investors, none of them really “closed”.

Ra, sent me a LinkedIn request a few weeks ago. In his invite he mentioned he was working in a new project and would like to come and meet me. Over email I quickly asked him why things did not work out. He said that in his perspective the market was clearly not ready for the product and he found that he could find better things for him to do with his time and he “lost interest” because he found a really awesome new idea that he was focusing on.

The final in the series why startup founders split is something I have heard from 2 teams, so I dont necessarily think I have enough data yet to confirm that this is a trend, but its important to document.

Founders usually split because they have different visions for the future of the company or one of them is not executing to the plan.

The shiny new object syndrome occurs when the company does not have enough or sufficient traction and the founders finds something new that they would rather do.

There’s a lot to learn from the story above that talks to more than why they really split, but the bottom line I gathered was Ra was not completely bought in and did not have the passion for the space, so the shiny new object got him more excited than anything with limited traction.

While I think its fair to lose passion for something you dont see too much traction, many a time I have personally seen that you need to spend a lot of time before you really get significant momentum.

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8 thoughts on “Why founders split? 3. The shiny new object syndrome”

  1. Hope you are doing well. Awesome coverage Mukund. The summary from the blogs – why founder split – from my standpoint – for all of them it seems – being with startup is more of a fad than anything else. It is hardwork, passion and risk of losing everything with a glimmer of hope of earning one’s place in Nirvana.

    thanks sudhi

  2. Mukund, good write up. Thanks.
    I can also add another reason – Sometimes, the rapid changes in the plans (A->B->C—->X) fatigues out some founders. When this happens, they fall behind as they don’t understand the versions of future reality that the others are seeing!
    This is the time, when the leader of the founding team (aka CEO) needs to sell his version of reality and get everybody else aligned. Otherwise, it is bound to crack.

    Yes, this happened to my startup!

  3. “Don’t worry about failure; you only have to be right once – Drew Houston”

    Mukund: awesome thread on the Founders Split – people seldom address the failures πŸ™‚ Said that, if I read a little more in this article (considering my past experience) – there’s something else which was missing in RA (apart from the SNO syndrome) was the startup hustle & energy. Selling/Engaging/Networking in a large corporation (as a BD) is very different from a startup! People like RA will kill more startups as they move to the ‘next best thing’. Sorry for being headstrong and cynical on RA πŸ˜‰

  4. Guilty as charged! The above is based on a(nother) true life story.:)

    Though it need not always be because of a ‘shiny new object’ directly, to fit a particular role. Aren’t we always on a lookout for smart (not necessarily entrepreneurial) people and try to get them on board, and then figure what they will do and how we can afford/compensate them. Sometimes, things may go wrong. But i guess it is a numbers game even there.
    Lessons learned : Don’t dilute your startup with anyone who doesn’t share the soul/culture of your startup, figure out what that person will do exactly before he/she comes in and of course, hire only when u really really need it!

  5. Right, Jagat – Mr RA should be Guilty at charge πŸ˜‰ Completely agree with you on “..don’t dilute your startup with anyone..”. Hiring is one thing but getting co-founder(s) onboard is totally a different ball game. Hence, co-founders should do a lot of ‘flirting’ & go through the ‘courtship’ phase before formally committing to ‘marry and work on their baby’ πŸ™‚

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