Article
When Their Moral Compass Fails, Leaders Fail: How Greed, Power, and Pressure Can Destroy Founders
January 3, 2025
Success in entrepreneurship is a double-edged sword. On one side lies the glory of innovation, wealth, and influence. On the other, an abyss where unchecked ambition, greed, and power pull founders into destructive cycles. Over 40 years of coaching startup founders and executives, I’ve seen both ends of this spectrum. Some founders achieve extraordinary success by balancing ambition with integrity, while others, often blinded by their own brilliance, derail their companies and their lives.
The sad truth? Many of these failures are not inevitable; they are self-inflicted. Founders sabotage themselves by succumbing to the very traits that once made them great. These traps are amplified by the relentless pressure to perform, demands from investors, and their own inner cravings for power and recognition.
The Curse of Ambition
Ambition is a founder’s lifeblood. It drives the late nights, the impossible pitches, and the daring decisions that turn ideas into empires. But unchecked ambition? That’s a different beast. It’s the kind that convinces founders the rules don’t apply to them.
Take Elizabeth Holmes, the once-celebrated CEO of Theranos. Her ambition to revolutionize healthcare was undeniable, but it morphed into something darker. Manipulation and deceit became her tools of choice to achieve what she couldn’t deliver. Investors, employees, and even patients paid the price for her Machiavellian tendencies. And she isn’t alone. I’ve seen countless founders convince themselves that ends justify the means. The result? Burnt bridges and broken companies.
In my coaching work, I’ve encountered founders who push their teams and themselves beyond healthy limits, all in the name of ambition. They prioritize winning over relationships, cutting corners and burning out the very people who could have helped them succeed. Ambition is not inherently bad, but it becomes a curse when it blinds you to the ethical and human costs of your decisions.
If you’re a founder, ask yourself: Has your ambition blinded you? Have you started seeing people as tools to be used rather than partners in your journey? Ambition without integrity is a ticking time bomb. Don’t wait for it to explode.
The Pressure Cooker of Success
Pressure is inevitable in a founder’s life. Investors demand results, employees expect leadership, and the market moves at breakneck speed. This pressure is not just external—it’s internal too. Founders are often their harshest critics. But here’s the catch: pressure reveals character. It can either sharpen you or break you.
Trevor Milton, founder of Nikola, is a case in point. The pressure to deliver on his promises to investors led him to embellish—no, outright fabricate—the capabilities of Nikola’s technology. The market was initially dazzled, but when the truth emerged, it wasn’t just Milton’s reputation that crumbled. Investors lost millions, and the company’s credibility was shattered.
Pressure can also distort priorities. Founders often start out with noble intentions, driven by a vision to make the world better. But as the stakes rise, so does the temptation to compromise. This might mean prioritizing investor demands over employee well-being or cutting ethical corners to hit a quarterly target. In my experience, the founders who fail under pressure often lack a clear set of values to guide their decisions.
I’ve seen founders crumble under similar pressure. They start cutting corners, making promises they can’t keep, and blaming others for their failures. Pressure is a test. Are you prepared to pass it, or will you let it strip away your integrity?
Blinded by Cognitive Bias
Let me be blunt: your brain is lying to you. Cognitive biases are sneaky saboteurs, distorting your perception and decision-making. Confirmation bias, for instance, makes you seek out information that supports your beliefs while ignoring evidence that contradicts them. Sound familiar?
Elizabeth Holmes also fell victim to this when she ignored repeated warnings from scientists and engineers that her technology didn’t work. She was so invested in her vision that she dismissed anything that challenged it. Elon Musk’s infamous tweet about taking Tesla private at $420 per share is another example of overconfidence, a bias that can turn brilliance into recklessness.
Another common bias is moral disengagement—the ability to rationalize unethical behavior. Martin Shkreli’s price-gouging of life-saving drugs is a textbook case. He justified his actions as “good business,” completely disregarding the human cost.
Founders, your vision is your greatest strength, but it’s also your greatest vulnerability. Surround yourself with people who challenge you. Seek out data that disproves your assumptions. If you’re not willing to question yourself, your company’s fate is already sealed.
The Seduction of Power
Power changes people. It’s a psychological fact. The more power you have, the less empathy you feel. You begin to see yourself as invincible, above the rules. Billy McFarland, the mastermind behind Fyre Festival, exemplifies this perfectly. His unchecked power allowed him to defraud investors and sell a fantasy that was doomed from the start. The result? Jail time and a cultural punchline that no founder wants to be.
Power also creates blind spots. Founders who centralize authority often miss out on crucial feedback and alternative perspectives. Adam Neumann of WeWork built a company that revolved around his vision but failed to create the checks and balances needed for sustainable growth. When his excesses caught up with him, the fallout was catastrophic.
As a founder, it’s tempting to centralize power. After all, it’s your vision, your company, your baby. But power without accountability is poison. Build systems that hold you accountable. Empower your team to challenge you. And never, ever believe your own hype.
Greed: The Original Sin
Greed isn’t just about money. It’s about the insatiable desire for more—more recognition, more control, more validation. I’ve seen founders destroy their companies because their greed blinded them to the bigger picture. Martin Shkreli’s price gouging of life-saving drugs is a textbook example. His pursuit of profit at all costs made him a pariah and landed him in prison.
Greed can manifest in subtle ways too. Maybe it’s pushing employees harder than they can handle to meet unrealistic goals. Maybe it’s ignoring ethical concerns to secure a lucrative deal. Whatever form it takes, greed erodes trust, both within your company and with the outside world.
Founders, ask yourself: What’s driving you? Is it a desire to build something meaningful, or is it greed masquerading as ambition? Be honest, because greed will never be satisfied, and it will take you down with it.
The Culture You Create
Founders set the tone for their companies. If you’re cutting corners, turning a blind eye to unethical practices, or prioritizing results over integrity, don’t be surprised when your team follows suit. Wells Fargo’s fake account scandal is a stark reminder of how toxic cultures start at the top.
In my work, I’ve seen founders who foster cultures of fear, secrecy, and favoritism. These cultures breed resentment and disengagement, making it nearly impossible to build a sustainable business. Your culture is your legacy. Make sure it’s one you can be proud of.
Creating a healthy culture requires more than platitudes. It demands transparency, fairness, and accountability. Employees need to see that ethical behavior is rewarded and that unethical actions have consequences. Without this, your culture becomes a breeding ground for dysfunction.
The Redemption of Self-Awareness
Here’s the good news: these traps are avoidable. The antidote is self-awareness. Great founders know their strengths and weaknesses. They recognize when they’re veering off course and take steps to correct it.
One founder I coached—let’s call him Jake—was a textbook case of overconfidence. His company was growing rapidly, but his micromanagement and refusal to delegate were stifling his team. When Jake finally admitted he couldn’t do it all, he brought in a COO who complemented his skill set. The company thrived.
Self-awareness isn’t just about admitting your flaws. It’s about building systems and relationships that keep you grounded. Surround yourself with people who challenge you, not yes-men who validate your worst instincts. And never stop reflecting on why you started this journey in the first place.
Conclusion
Entrepreneurship is one of the most challenging and rewarding paths you can take. But it’s also a minefield of traps that can destroy everything you’ve worked for. Greed, power, and pressure are constant companions on this journey, and how you handle them will define your legacy.
The question isn’t whether you’ll face these challenges—you will. The question is whether you’ll let them control you. Will you fall into the traps that have derailed so many founders before you, or will you rise above them? The choice is yours. But remember success without integrity is failure by another name.
Lead wisely.
The sad truth? Many of these failures are not inevitable; they are self-inflicted. Founders sabotage themselves by succumbing to the very traits that once made them great. These traps are amplified by the relentless pressure to perform, demands from investors, and their own inner cravings for power and recognition.
The Curse of Ambition
Ambition is a founder’s lifeblood. It drives the late nights, the impossible pitches, and the daring decisions that turn ideas into empires. But unchecked ambition? That’s a different beast. It’s the kind that convinces founders the rules don’t apply to them.
Take Elizabeth Holmes, the once-celebrated CEO of Theranos. Her ambition to revolutionize healthcare was undeniable, but it morphed into something darker. Manipulation and deceit became her tools of choice to achieve what she couldn’t deliver. Investors, employees, and even patients paid the price for her Machiavellian tendencies. And she isn’t alone. I’ve seen countless founders convince themselves that ends justify the means. The result? Burnt bridges and broken companies.
In my coaching work, I’ve encountered founders who push their teams and themselves beyond healthy limits, all in the name of ambition. They prioritize winning over relationships, cutting corners and burning out the very people who could have helped them succeed. Ambition is not inherently bad, but it becomes a curse when it blinds you to the ethical and human costs of your decisions.
If you’re a founder, ask yourself: Has your ambition blinded you? Have you started seeing people as tools to be used rather than partners in your journey? Ambition without integrity is a ticking time bomb. Don’t wait for it to explode.
The Pressure Cooker of Success
Pressure is inevitable in a founder’s life. Investors demand results, employees expect leadership, and the market moves at breakneck speed. This pressure is not just external—it’s internal too. Founders are often their harshest critics. But here’s the catch: pressure reveals character. It can either sharpen you or break you.
Trevor Milton, founder of Nikola, is a case in point. The pressure to deliver on his promises to investors led him to embellish—no, outright fabricate—the capabilities of Nikola’s technology. The market was initially dazzled, but when the truth emerged, it wasn’t just Milton’s reputation that crumbled. Investors lost millions, and the company’s credibility was shattered.
Pressure can also distort priorities. Founders often start out with noble intentions, driven by a vision to make the world better. But as the stakes rise, so does the temptation to compromise. This might mean prioritizing investor demands over employee well-being or cutting ethical corners to hit a quarterly target. In my experience, the founders who fail under pressure often lack a clear set of values to guide their decisions.
I’ve seen founders crumble under similar pressure. They start cutting corners, making promises they can’t keep, and blaming others for their failures. Pressure is a test. Are you prepared to pass it, or will you let it strip away your integrity?
Blinded by Cognitive Bias
Let me be blunt: your brain is lying to you. Cognitive biases are sneaky saboteurs, distorting your perception and decision-making. Confirmation bias, for instance, makes you seek out information that supports your beliefs while ignoring evidence that contradicts them. Sound familiar?
Elizabeth Holmes also fell victim to this when she ignored repeated warnings from scientists and engineers that her technology didn’t work. She was so invested in her vision that she dismissed anything that challenged it. Elon Musk’s infamous tweet about taking Tesla private at $420 per share is another example of overconfidence, a bias that can turn brilliance into recklessness.
Another common bias is moral disengagement—the ability to rationalize unethical behavior. Martin Shkreli’s price-gouging of life-saving drugs is a textbook case. He justified his actions as “good business,” completely disregarding the human cost.
Founders, your vision is your greatest strength, but it’s also your greatest vulnerability. Surround yourself with people who challenge you. Seek out data that disproves your assumptions. If you’re not willing to question yourself, your company’s fate is already sealed.
The Seduction of Power
Power changes people. It’s a psychological fact. The more power you have, the less empathy you feel. You begin to see yourself as invincible, above the rules. Billy McFarland, the mastermind behind Fyre Festival, exemplifies this perfectly. His unchecked power allowed him to defraud investors and sell a fantasy that was doomed from the start. The result? Jail time and a cultural punchline that no founder wants to be.
Power also creates blind spots. Founders who centralize authority often miss out on crucial feedback and alternative perspectives. Adam Neumann of WeWork built a company that revolved around his vision but failed to create the checks and balances needed for sustainable growth. When his excesses caught up with him, the fallout was catastrophic.
As a founder, it’s tempting to centralize power. After all, it’s your vision, your company, your baby. But power without accountability is poison. Build systems that hold you accountable. Empower your team to challenge you. And never, ever believe your own hype.
Greed: The Original Sin
Greed isn’t just about money. It’s about the insatiable desire for more—more recognition, more control, more validation. I’ve seen founders destroy their companies because their greed blinded them to the bigger picture. Martin Shkreli’s price gouging of life-saving drugs is a textbook example. His pursuit of profit at all costs made him a pariah and landed him in prison.
Greed can manifest in subtle ways too. Maybe it’s pushing employees harder than they can handle to meet unrealistic goals. Maybe it’s ignoring ethical concerns to secure a lucrative deal. Whatever form it takes, greed erodes trust, both within your company and with the outside world.
Founders, ask yourself: What’s driving you? Is it a desire to build something meaningful, or is it greed masquerading as ambition? Be honest, because greed will never be satisfied, and it will take you down with it.
The Culture You Create
Founders set the tone for their companies. If you’re cutting corners, turning a blind eye to unethical practices, or prioritizing results over integrity, don’t be surprised when your team follows suit. Wells Fargo’s fake account scandal is a stark reminder of how toxic cultures start at the top.
In my work, I’ve seen founders who foster cultures of fear, secrecy, and favoritism. These cultures breed resentment and disengagement, making it nearly impossible to build a sustainable business. Your culture is your legacy. Make sure it’s one you can be proud of.
Creating a healthy culture requires more than platitudes. It demands transparency, fairness, and accountability. Employees need to see that ethical behavior is rewarded and that unethical actions have consequences. Without this, your culture becomes a breeding ground for dysfunction.
The Redemption of Self-Awareness
Here’s the good news: these traps are avoidable. The antidote is self-awareness. Great founders know their strengths and weaknesses. They recognize when they’re veering off course and take steps to correct it.
One founder I coached—let’s call him Jake—was a textbook case of overconfidence. His company was growing rapidly, but his micromanagement and refusal to delegate were stifling his team. When Jake finally admitted he couldn’t do it all, he brought in a COO who complemented his skill set. The company thrived.
Self-awareness isn’t just about admitting your flaws. It’s about building systems and relationships that keep you grounded. Surround yourself with people who challenge you, not yes-men who validate your worst instincts. And never stop reflecting on why you started this journey in the first place.
Conclusion
Entrepreneurship is one of the most challenging and rewarding paths you can take. But it’s also a minefield of traps that can destroy everything you’ve worked for. Greed, power, and pressure are constant companions on this journey, and how you handle them will define your legacy.
The question isn’t whether you’ll face these challenges—you will. The question is whether you’ll let them control you. Will you fall into the traps that have derailed so many founders before you, or will you rise above them? The choice is yours. But remember success without integrity is failure by another name.
Lead wisely.
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Startup founders represent the ultimate paradox: celebrated for their innovative brilliance yet notoriously susceptible to failure. In reality, the difference between astronomical success and dismal failure boils down to a surprisingly consistent set of behaviors and personality traits. Drawing from extensive 360 feedback studies, personality assessments, and deep insights from Founders Keepers, we've unraveled exactly what separates winners from losers in the startup world. Myth-busting: Genius Jerks Rarely Prevail A common myth persists that successful founders must be narcissistic, domineering, and abrasive—the stereotypical "genius jerk." Yet, our rigorous analysis of data from 122 founders, comparing the top performers (at least 10X returns) with bottom performers (zero returns), decisively shatters this myth. Successful founders, contrary to popular belief, rarely succeed because of egocentric ruthlessness. Instead, they thrive due to their extraordinary adaptability, relationship-building skills, disciplined execution, and deep personal grounding. Meanwhile, unsuccessful founders often implode because of their rigidity, isolation, impulsivity, and inability to truly lead teams. Adaptability: The Endless Pursuit of Product-Market Fit Successful founders understand one critical truth: product-market fit isn't a finish line; it’s a continuous process. They show an exceptional ability to: Remain open to input, eagerly soliciting and integrating team feedback. Effectively manage resistance, empathetically addressing team concerns. Skillfully create buy-in, building commitment through transparency and genuine engagement. In contrast, unsuccessful founders typically fail due to rigidity. They stubbornly anchor themselves to outdated strategies, ignore valuable feedback, and react defensively to challenges, eventually becoming roadblocks in their own companies. Relationship Building: From Loners to Leaders A pivotal distinction lies in the ability to work effectively through others. Successful founders consistently excel in empowering their teams. They: Delegate effectively, granting autonomy while clearly defining expectations. Maintain trust through consistent behavior, integrity, and transparency. Develop robust emotional intelligence, adeptly managing conflict and strengthening team cohesion. Unsuccessful founders, on the other hand, struggle profoundly with delegation. Their chronic micromanagement erodes trust and morale, creating environments of fear and resentment. They often isolate themselves, failing to build genuine relationships, thus missing critical insights and innovations their teams could provide. Execution: Discipline Over Charisma Execution—arguably the most underrated pillar of startup leadership—truly separates winners from losers. Successful founders meticulously: Set clear, measurable, and achievable goals. Follow through relentlessly, holding themselves and others accountable. Create robust systems and processes to scale effectively. Conversely, unsuccessful founders typically suffer from chronic disorganization and impulsivity. Their inability to prioritize, constant pivots without strategic clarity, and poor follow-through generate chaos and stifle growth. Personal Grounding: Stability Amidst Chaos Perhaps most counterintuitively, successful founders exhibit deep personal grounding—a trait seldom highlighted in sensational startup narratives. They: Demonstrate emotional resilience, remaining composed under extreme stress. Exhibit patience, tolerating ambiguity and uncertainty with grace. Maintain optimistic yet realistic perspectives, avoiding destructive cycles of anxiety or panic. Unsuccessful founders, however, often spiral under pressure. Their volatility and emotional reactivity exacerbate crises, leading to poor decision-making and destructive interpersonal dynamics. Self-Awareness: The Hidden Driver of Success Underpinning all these traits is profound self-awareness—arguably the most critical competency of all. Successful founders consistently seek self-improvement, humbly recognizing their weaknesses and proactively addressing them. They actively solicit honest feedback, never fearing the vulnerability required for growth. Unsuccessful founders, conversely, often display a tragic lack of self-awareness. Their denial of shortcomings, defensiveness to feedback, and unwillingness to evolve ultimately doom their startups. Real-World Wisdom: Voices from the Trenches Beyond the data, the human stories captured in 360 feedback illustrate these differences vividly: Successful founders receive praise like, “He constantly solicits input, adapts swiftly, and builds deep trust. His humility makes everyone want to follow him.” Unsuccessful founders, by contrast, earn harsh critiques: “He ignores input, reacts defensively, and insists on controlling every detail. The team is disengaged and demoralized.” These narratives underscore the simple but powerful truth that the best founders aren't isolated geniuses—they’re skilled leaders who build environments where everyone can thrive. The Path Forward: Turning Insights into Action If you're a founder, investor, or leader within the startup ecosystem, confront these truths head-on. Assess yourself and your organization rigorously: Are you truly adaptable, or merely superficially agile? Are you empowering your team, or stifling their potential? Are you executing with discipline, or flailing with chaos? Are you grounded emotionally, or reactive and volatile? Are you genuinely self-aware, or defensively delusional? Final Thoughts Ultimately, founder success isn’t about flashy charisma or ruthless ambition. It’s about a disciplined commitment to growth—both personal and organizational. Embrace adaptability, deepen your self-awareness, and master the art of leadership grounded in trust and integrity. This is not merely good advice—it’s the proven difference between a startup’s spectacular success and its avoidable failure. What traits do you see defining successful and unsuccessful founders in your experience? Let's discuss!
We’ve all seen the headlines: visionary founders, celebrated one day, indicted for fraud the next. Elizabeth Holmes of Theranos, Sam Bankman-Fried of FTX, Trevor Milton of Nikola—each a cautionary tale. But why does this keep happening? More importantly, how can investors and venture capitalists spot the red flags before disaster strikes? After decades coaching startup founders and executives, and through intensive psychological profiling research in my book, Founders Keepers, it’s clear that the qualities which make founders extraordinary can also lead them into ethical peril. Ambition Gone Rogue Ambition is the engine of innovation, but when unchecked, it can spiral into something destructive. Elizabeth Holmes, once hailed as the next Steve Jobs, turned ambition into deception, sacrificing integrity for the illusion of success. Her willingness to misrepresent Theranos's technology eventually led to fraud convictions and a 11-year prison sentence. Similarly, Trevor Milton fabricated demonstrations of Nikola’s hydrogen-powered trucks, deceiving investors and regulators alike. Ambition that isn’t tempered by reality becomes toxic, pushing founders to prioritize appearances over substance. Narcissism and the Cult of Personality A striking number of fraudulent founders exhibit narcissistic traits. Narcissistic Personality Disorder (NPD) is disturbingly common among indicted entrepreneurs like Holmes, Adam Neumann, and Billy McFarland. These individuals have inflated self-worth, entitlement, and a troubling lack of empathy—traits that enable them to manipulate investors, employees, and markets. Adam Neumann’s charismatic leadership at WeWork masked a self-serving agenda. He leased his own properties to WeWork and indulged in extravagances funded by investor capital. His eventual downfall underscores a critical point: charisma and confidence, unchecked by accountability, can devastate companies. Pressure, Risk, and Rationalization Founders operate in pressure cookers. Investor demands, market competition, and internal expectations can distort ethical boundaries. Under such strain, founders rationalize questionable decisions—initially minor, then increasingly severe. Sam Bankman-Fried’s FTX saga exemplifies this slippery slope. Praised for his effective altruism, he secretly diverted customer funds into his own hedge fund, creating one of history’s largest financial implosions. Under extreme pressure to perform, ethical lines blurred into oblivion. The Dark Triad and Founder Psychology Research identifies a psychological pattern—the Dark Triad: narcissism, Machiavellianism, and psychopathy. Founders exhibiting these traits manipulate, charm, and dominate others effortlessly. Their moral compasses malfunction, viewing ethics as mere obstacles. Martin Shkreli of Turing Pharmaceuticals raised drug prices mercilessly, justified as smart business. He ultimately faced securities fraud charges. This combination of manipulative charm, moral disengagement, and ruthless pragmatism frequently ends in corporate ruin. Red Flags Investors Can’t Ignore VCs and investors must vigilantly recognize signals of potential ethical crises: Accountability Gaps: Founders who deflect blame, resist feedback, or evade responsibility when faced with failures. Deceptive Fluency: Founders who remain intentionally vague, changing narratives to fit different audiences, lack transparency, and dodge specifics. Weak Governance: Companies lacking robust financial controls, passive boards, or weak compliance protocols enable founder misconduct. Excessive Charm: Overly charismatic leaders who evade scrutiny, foster cult-like devotion, and dismiss ethical concerns as trivial. Case Study: When Good Intentions Go Bad Consider Charlie Javice the Frank founder. Desperate to sell her startup, she fabricated millions of fake users, deceiving JPMorgan into a $175 million acquisition. Ambition, pressure, and opportunity collided disastrously, underscoring that even well-intentioned founders can fall if ethical vigilance wanes. Prevention through Awareness and Systems To mitigate these risks, investors must foster cultures of accountability. This means: Rigorous Due Diligence: Deep vetting of founder histories, not just their pitch decks. Transparent Governance: Enforcing independent oversight, clear reporting, and stringent ethical guidelines. Balanced Teams: Encouraging founders to build leadership teams empowered to challenge decisions. Healthy skepticism, combined with robust systems, creates a strong firewall against unethical behavior. Redemption and Self-Awareness Not all troubled founders are irredeemable. Many need interventions—coaching, accountability partners, and structured feedback—to prevent ethical slippage. Self-awareness is key. Founders who reflect on their blind spots and acknowledge limitations have a far better prognosis. Investing Wisely Means Looking Deeper The stark truth for investors is this: brilliance without integrity is dangerous. Investing isn't merely betting on ideas; it's assessing character. The cost of ignoring red flags is staggering, not just financially, but reputationally and ethically. Ask yourself one simple question when evaluating founders: If they weren't successful, would their behaviors still seem acceptable? The answer reveals everything. The line between visionary and fraudster is thin. Vigilance, skepticism, and structured accountability are critical tools in protecting your investments—and ensuring the next headline isn't about your portfolio.
Founders live in a world of chaos. It’s exhilarating, intense, and downright terrifying. You’re constantly shifting between the thrill of new ideas and the crushing weight of responsibility. Every decision feels like a life-or-death moment for your company, and the stress is unrelenting. Yet, amid this madness, there’s one thing that determines whether you’ll thrive or crash and burn: personal grounding.
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