Founders Must Build Confidence to Avoid Hesitation

The psychology of leadership requires making difficult decisions in the face of uncertainty and running toward fear rather than away from it.

The Hesitation Trap: Why Leaders Fail

• The worst thing a leader can do is hesitate on making decisions

• Hesitation is destructive because:

  • It locks up the company and prevents forward movement
  • Creates a power vacuum that senior people feel compelled to fill
  • Leads to politics as people vie for decision-making authority
  • Signals lack of confidence to the entire organization

• The root cause of hesitation is facing two bad options:

  • "Both decisions are horrible... if we re-architect, we'll probably miss all the features, miss the quarter, have trouble raising money"
  • "Not re-architecting is really bad too"
  • Leaders try to avoid the subject entirely rather than choosing the less bad option

Building Leadership Psychology

• "The psychological muscle you have to build to be a great leader is to be able to click in the abyss and go 'okay that way is slightly better, we're gonna go that way'"

• You must learn to make decisions that most people don't like:

  • "If everybody agrees with the decision then you didn't add any value cause they would have done that without you"
  • "The only value you ever add is when you make a decision that most people don't like"

• Leaders must develop comfort with failure:

  • "The median on the CEO test is like 18, it's not like 90"
  • "You gotta be comfortable getting a lot of D minuses"
  • "The D minus is fine as long as you don't get the F, as long as you don't run out of cash"
  • C-minus students often make better CEOs because they're used to failing

The Confidence-Competence Curve

• Most founders fail because they lose confidence after making expensive mistakes

• When confidence drops, hesitation follows

• When hesitation occurs, senior people jump into the void to make decisions

• This creates politics and dysfunction

• To succeed, founders must:

  • Normalize failure as part of the process
  • Recognize that "life isn't fair" and stop expecting fairness
  • Focus on "what should I do now" rather than dwelling on unfairness
  • Build a support network that makes you feel like a CEO
  • Surround yourself with people who can help you navigate difficult conversations

Running Toward Fear

• Great leaders run toward fear rather than away from it

• Example: Going public with only $2M in trailing revenue when the alternative was bankruptcy

  • "That's obviously a bad idea, but the truth of it was the alternative was going bankrupt and that's a worse idea"
  • The Wall Street Journal wrote a story about "how stupid" this decision was
  • Business Week called it "The IPO from Hell"
  • But it was still the right decision

• Leaders must be willing to be disliked in the short term:

  • "They're not going to like it when you say it, there's no question, but over time it could save the company"
  • "All the most important things I've said are things that I've said to CEOs that they did not want to hear"

Practical Leadership Advice

• Focus on strengths, not lack of weaknesses
• As CEO, you can't develop people in functions you don't understand
• Seek "managerial leverage" - people who tell you what to do, not the other way around
• Recognize when you need to have difficult conversations
• Don't be CEO at home (don't boss your family around)
• Remember: "Failures no there. From this day on, no credit will be given for predicting rain, only credit for building an ark"

Building Confidence as a Leader

• Create a network that makes you feel like a CEO
• Talk to other CEOs who understand your challenges
• Surround yourself with people who can help you navigate difficult conversations
• Focus on what you can control rather than what's "fair"
• Recognize that all successful leaders go through the same struggles

The most important factor in leadership success is managing your own psychology and maintaining confidence through inevitable failures.