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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. 

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Scaling Beyond Genius: The Unseen Work of Building a Billion-Dollar Startup
By Richard Fagan January 30, 2025
Founders often carry a mythic aura, celebrated for their vision, charisma, and relentless drive. They are the bold risk-takers who disrupt industries, change lives, and will entire markets into existence. These narratives—as addictive as they are—often lead to an unfortunate misconception: that sheer genius is enough to scale a startup. It isn’t. Vision alone might get you through the knife-fight phase of a startup’s life, but when it’s time to scale, your brilliance can become a bottleneck. Founders who cling to the illusion that they can power through scaling challenges with charisma and creativity often fail spectacularly. This blog is a wake-up call for founders, potential founders, failed founders, and investors alike: genius alone will not carry you to the finish line. What separates the startups that thrive from those that crumble is not brilliance but the ability to build enduring systems, structures, and processes. 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Founders must transition from being the hero to being the architect of systems that empower others to execute effectively. This means delegating, coaching, and trusting their team to own outcomes. Myth 3: Startups Should Avoid Bureaucracy The word “bureaucracy” sends chills down the spines of most founders. Isn’t the whole point of a startup to move fast and break things? Isn’t bureaucracy the enemy of innovation? Not exactly. While startups should avoid unnecessary red tape, the absence of structure often leads to inefficiency and burnout. Teams waste time reinventing the wheel because there’s no documented process. Priorities shift on a whim, leaving employees confused and disengaged. Founders who reject all forms of process in the name of agility often end up with chaos instead of speed. Reality Check: Scaling startups need “just enough” process to provide clarity and direction. Think of processes as guardrails, not handcuffs. They should enable agility, not stifle it. Myth 4: Scaling Is About Adding More Resources When startups hit growing pains, the instinctive reaction is to throw more resources at the problem: hire more people, buy better tools, raise more money. While these are sometimes necessary, they’re rarely sufficient. Scaling isn’t just about doing more; it’s about doing better. Consider this: doubling your team without clear systems in place will only amplify inefficiencies. Throwing money at problems without solving root causes leads to waste. Founders who equate scaling with “more” often find themselves with bloated organizations that are slow and unprofitable. Reality Check: Scaling is about improving efficiency and effectiveness. Before adding more resources, founders need to optimize their existing processes to handle greater complexity. What Successful Founders Do Differently So, what separates the founders who successfully scale their startups from those who don’t? Here are the key actions they take: 1. Re-engineer Inefficient Processes Successful founders don’t just patch over inefficiencies; they dig deep to redesign broken systems. They prioritize scalability from the start, asking questions like: “Can this process handle 10x growth?” If the answer is no, they fix it. 2. Shift from Doer to Leader Founders who scale learn to let go of day-to-day tasks and focus on strategic leadership. This means empowering their team to own decisions and outcomes while providing clear guidance and support. 3. Invest in People and Culture Scaling isn’t just about systems; it’s also about people. Great founders invest in hiring top talent, developing their team’s capabilities, and creating a culture that aligns with their values and vision. 4. Embrace Feedback and Adaptation Scaling is a messy process that requires constant iteration. Founders who thrive are those who actively seek feedback from their team, customers, and investors—and use it to refine their approach. 5. 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Leading with Integrity: Why the Best Leaders Are Models of Values
By Richard Fagan January 24, 2025
In a recent Founders Keepers newsletter entitled “When Their Moral Compass Fails, Leaders Fail: How Greed, Power, and Pressure Can Destroy Founders” I discussed how the pressure of investor demands, and the corrosive effects of power and greed can erode a founder’s moral compass. These challenges are not limited to startup founders; they affect leaders across all industries. However, our research on nearly 2,000 executives, including the top 200 leaders who emerged as the “best” based on 360-degree feedback ratings, provides a critical insight: the best leaders are unwavering models of integrity and values. This is not just an ideal to aspire to—it’s a requirement for sustainable success. When leaders prioritize integrity and live by a clear set of values, they build trust, inspire their teams, and create a foundation for enduring impact. 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Ethical Decision-Making: These leaders prioritize ethical considerations, making decisions that align with their values rather than taking shortcuts for short-term gains. Accountability: They own their mistakes, modeling humility and responsibility for their teams. Take Howard Schultz, the former CEO of Starbucks, as an example. Schultz demonstrated integrity by prioritizing ethical sourcing, offering healthcare benefits to part-time employees, and fostering a culture of respect and inclusion. His leadership not only built a globally respected brand but also created an environment where employees felt valued, and customers felt connected to the company’s mission. According to a comprehensive review of the literature, leaders who demonstrate integrity cultivate stronger trust among their teams, improve morale, and enhance overall organizational performance. The ripple effects of their behavior extend to organizational reputation, customer loyalty, and financial success. Values as the Leader’s Guiding Light Values are the principles that define what is most important to an individual or organization. For leaders, values serve as a decision-making framework, shaping their behavior and influencing their teams. Leaders who model and promote core values create a strong organizational culture where employees feel aligned and inspired. In our study of the best leaders, the following behaviors stood out: Leading by Example: The best leaders don’t just articulate values; they embody them. Their behavior demonstrates the standards they expect from others. High Standards of Conduct: These leaders maintain impeccable personal and professional standards, setting a tone that permeates their teams and organizations. Promoting Organizational Values: By aligning their behavior with the organization’s mission and vision, these leaders reinforce the importance of shared values. Brian Chesky, CEO of Airbnb, exemplified these principles during the COVID-19 pandemic. Faced with difficult decisions, Chesky ensured that laid-off employees received generous severance packages and career support. His transparent and empathetic approach reinforced Airbnb’s values and preserved the company’s reputation during a challenging time. The literature supports these findings, emphasizing that when leaders align personal and organizational values, it leads to increased job satisfaction, higher productivity, and reduced turnover. Trust: The Currency of Leadership Integrity and values contribute to the most critical currency a leader possesses: trust. Leaders who consistently demonstrate integrity earn the confidence of their employees, stakeholders, and customers. This trust forms the foundation of effective collaboration, open communication, and organizational resilience. Our research showed that trust was a hallmark of the best leaders. They were described as dependable, reliable, and fair. Their actions consistently reflected their commitments, which inspired loyalty and respect. Paul Polman, former CEO of Unilever, is a shining example of how integrity builds trust. Polman led Unilever with a focus on sustainability and social responsibility, proving that profitability and ethical practices can coexist. His leadership attracted like-minded stakeholders, enhanced the company’s reputation, and set a benchmark for ethical corporate governance. Building trust, however, is not a one-time effort. It requires continuous reinforcement through ethical behavior, transparency, and accountability. As one executive in our study remarked, “Trust takes years to build, seconds to break, and forever to repair.” The Downside of Losing Integrity The stakes for leaders who fail to model integrity are high. Our review of business failures, including infamous cases like Enron and Theranos, highlights how a lack of ethical leadership can lead to catastrophic outcomes. Leaders who compromise their values for short-term gains risk not only their reputations but also the viability of their organizations. The Enron scandal was rooted in accounting fraud and ethical violations by top executives who prioritized personal gain over organizational integrity. Similarly, Elizabeth Holmes of Theranos allowed ambition to override honesty, leading to the downfall of a once-promising company. These examples underscore the importance of ethical leadership in avoiding reputational and financial disaster. Expanding the Legacy: The Ripple Effects of Integrity Leaders who model integrity extend their influence far beyond their immediate teams. They create a ripple effect that shapes organizational culture, industry standards, and even societal expectations. A consistent pattern in our research is that ethical leaders inspire ethical behavior at all levels of the organization, amplifying their impact. For instance, Satya Nadella’s leadership at Microsoft has transformed the company culture from one of cutthroat competition to collaboration and innovation. By prioritizing empathy, inclusion, and a growth mindset, Nadella has demonstrated how values-driven leadership can rejuvenate a global organization and inspire employees worldwide. This ripple effect is not accidental; it requires intentional effort to embed integrity into every aspect of leadership. Leaders must ask themselves: How can I ensure my values are reflected in the decisions I make, the systems I design, and the culture I cultivate? Actionable Steps for Leading with Integrity So, how can leaders ensure they remain models of values in the face of challenges? Here are actionable strategies based on our research and the broader literature: Clarify Your Core Values: Take time to reflect on your principles and create a personal mission statement. Ensure your values align with your organization’s mission. Lead by Example: Demonstrate your values through consistent actions. Be the behavior you wish to see in your team. Be Transparent: Openly communicate your decisions and the values guiding them. Transparency builds trust and accountability. Own Your Mistakes: When you fall short, acknowledge it. Use failures as an opportunity to model humility and resilience. Seek Feedback: Regularly solicit input from your team to understand how your behavior aligns with your values. This fosters self-awareness and continuous improvement. Promote Organizational Values: Reinforce the importance of shared values by embedding them into your organization’s culture and decision-making processes. Practice Ethical Decision-Making: Develop a habit of evaluating decisions through an ethical lens. Ask yourself how your choices align with your values and their impact on others. Amplify Your Influence: Leverage your position to mentor others, advocate for ethical practices, and inspire your industry to prioritize integrity. An Inspiring Legacy The best leaders are not only successful but also admired for their integrity and values. Their influence extends beyond organizational performance to leave a lasting legacy of trust, inspiration, and ethical conduct. As leaders, we must constantly ask ourselves: What kind of legacy are we building? In the words of one of the best leaders from our study, “Leadership isn’t about being in charge; it’s about taking care of those in your charge.” By prioritizing integrity and living by our values, we can inspire those around us and build organizations that stand the test of time. As you reflect on this, revisit the challenges I outlined in Founders Keepers —the pressures, greed, and power that can erode integrity. Let this serve as a reminder to stay grounded in your values and lead with unwavering commitment to what is right.  Success is fleeting, but integrity endures.
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